Wednesday, 29 June 2011

FCC's 15th Report

The US regulator has released its 15th Annual Competition Report.

French search engine operator sues Google

1plusV sued Google claiming for damages that it has allegedly incurred following the latter withdrawing the former from its search results and barring it of access to its advertising technology (see globalcompetitionreview.com).

Maltese NRA's guidelines on subscriber contracts

MCA has relased its guidelines concerning the content, form and way of handing over of contracts to consumers by providers.

OFCOM's second consultation on LLCC PPC Point of Handover Pricing

After the disposal of the leased lines charge control (LLCC) appeal by CAT, OFCOM launched a second consultation on the pricing issues as regards POH (see the relevant page).

OFCOM consults on DAB coverage

OFCOPM launched a consultation as regards the principles of DAB planning. After the digital switch-over in TV services, the UK plans its steps on the switch-over of radio services (see the relevant page).

OFCOM consults on battery back-up plan for optical fibre

OFCOM has launched a consultation to come up with a back-up plan in case of power cuts. The problem derives from the fact that contrary to copper, optical fibres cannot work without electricity (see the relevant page).

OFCOM closes investigation into Talk Talk's compliance as regards emergency calls

Talk Talk persuaded the NRA that it complies with GC4 by providing caller location information. OFCOM decided thus to drop the investigation (see the press release).

Tuesday, 28 June 2011

Google confirms FTC's investigation

In its blog, Google confirms FTC's investigation.

Commission's Art. 7 Comments to Hungarian NRA on the latter's 3rd review of the fixed call origination and termination markets

The European Commission, in its decision, made the following comments to NMHH on the latter's 3rd review of the fixed call origination and termination markets:

"Need for an appropriate cost accounting obligation in the fixed termination markets

The Commission has on numerous occasions expressed the view that termination rates should be set at the cost which would be faced by an efficient operator providing the relevant service, and in order to determine the efficient cost level, the Commission has recommended a forward-looking long-run incremental cost (FL-LRIC) model as the relevant costing methodology. The Commission is of the view that although top-down models can avoid disincentives to invest, they do not necessarily promote efficiency to the extent bottom-up models do, since they normally allow for the recovery of the costs incurred as a result of operator's inefficiency as well. The Commission’s Termination Rates Recommendation suggests therefore a calculation evaluation of efficient costs based on the use of a bottom-up modelling approach, which could be reconciled with a top-down approach.

The Commission takes note of the fact that NMHH (i) is not applying a bottomup LRIC cost model but a top-down LRIC (based on Magyar Telekom data) and (ii) postpones the implementation of a bottom-up LRIC model until the next review of wholesale markets for termination in two years time.

On this basis, NMHH will adopt the BU LRIC model only after 31 December 2012 and its implementation will probably be accomplished only by 1 July 2014.

The Commission invites NMHH to consider fully aligning its cost accounting methodology with the recommended BU LRIC model based on the current costs of an efficient operator already by the end of 2012.

Price Asymmetries in FTRs

The Commission notes that NMHH proposes to reduce the current price asymmetry in FTRs as a first step towards symmetry based on a BU-LRIC cost model. Nonetheless, the Commission notes that not only the ANOs but also the other local incumbents are to be granted a price premium over Magyar Telekom's FTR during the next regulatory period. NMHH recognises in its reply to the request for information that this approach may result in 37 different FTRs.

As stated in the Termination Rates Recommendation any deviation from a single efficient cost level must be justified by objective cost differences outside the control of the operators concerned. In fixed networks, no such objective cost differences outside the control of the operator have been identified. In fact, the potential transitional period of price asymmetry in favour of the new entrants (up to four years) that is foreseen by the Termination Rates Recommendation only applies to mobile termination rates (MTRs), but not FTRs.

The Commission considers that NMHH has not provided adequate justification for asymmetry of FTRs in Hungary, i.e. on the basis of objective cost differences. NMHH mainly intends to reach a balance between the need for price reduction and convergence in FTRs, on the one hand, and the need to mitigate its impact on the operators' business, on the other hand.

Therefore the Commission asks NMHH to take full account of the Termination Rates Recommendation and to achieve symmetrical, cost efficient FTRs as soon as possible.

Notification requirements as to the price control obligation


As NMHH reserves the right to require prices to be amended, where appropriate, the Commission reminds the Hungarian regulator that any regulatory measures imposing or amending wholesale access prices are required to be notified under Article 7(3) of the Framework Directive".

Commission's Art. 7 Comments to the Polish NRA on the latter's review of PTC's fixed call termination

The European Commission, in its decision, made the following comments to UKE on the latter's review of PTC's (Polska Telefonia Cyfrowa) fixed call termination setting price control obligations upon that undertaking:

"Need to apply the Termination Rates Recommendation

The Commission notes that UKE's glide path does not specify access prices but sets a ratio between PTC's termination rates and TP's termination rate, whereby TP is not obliged to follow any glide path10 as its prices are based on costs incurred as approved by UKE. The Commission would like to recall that TP's termination rates are currently not set in line with the Termination Rates Recommendation, that is at the level of costs which are faced by an efficient operator providing the relevant service. Therefore, the inefficiencies allowed for in the termination rate set for TP will also be reflected in the rates of PTC.

Furthermore, a distinction must be made between mobile termination rates (MTRs) and FTRs. As stated in the Termination Rates Recommendation, new entrants on the mobile telephony markets may be subject to higher unit cost for a transitional period, before having reached the minimum efficient scale. New entrants in fixed markets, however, can achieve low unit costs for example by focusing their networks on high-density routes in particular geographic areas and/or by renting relevant network inputs from other operators. Therefore, the transitional period of price asymmetry (in justified cases up to four years) that is foreseen by the Termination Rates Recommendation only applies to MTRs, but not FTRs.

The Commission notes that the proposed glide path does not lead to symmetrical rates and determines the levels of FTRs in PTC's network for a relatively short period of time (1.5 years), while leaving the determination of future rates to yet another market review. The Commission considers that the lack of determination of the FTRs at symmetric levels beyond 31 December 2012 is not in line with Commission's Termination Rates Recommendation, creates the need for unnecessarily frequent and overly bureaucratic regulatory interventions, and does not bring about the appropriate transparency, predictability for the market participants and expected benefits to final customers. Therefore, the Commission urges UKE to take full account of the Termination Rates Recommendation and reconsider on this basis its approach in order to set FTRs for PTC at cost efficient level and symmetric with other operators' rates as soon as possible".

Commission's Art. 7 Comments to the Swedish NRA on the latter's glide path to LRIC on mobile call termination

The European Commission, in its decision, made the following comments to PTS as regards the latter's proposed glide path to a LRIC model concerning mobile call termination charges:

" Implementation of the Termination Rates Recommendation

The Commission acknowledges the importance of the fact that any transition to a new costing model should not lead to competitive distortions. The Commission also shares PTS' view of the relevance of regulatory certainty in the regulation of termination markets. Furthermore, the Commission welcomes the expressed intention of PTS to move to a pure LRIC cost-model which will ensure that MTRs in Sweden are symmetrical and based on the costs incurred by an efficient operator. However, the Commission also notes that PTS has not yet notified to the Commission any such cost model and has not determined the precise timing of the model's introduction. Therefore, the Commission invites PTS to ensure that the transition scheme leads to full compliance with the Termination Rates Recommendation, i.e. that MTRs are implemented at cost-efficient, symmetric levels by 31 December 2012."

Monday, 27 June 2011

Paris Court of Appeals affirms French NRA's decision in the FT/Numericable dispute

The Paris Court of Appeals ruled that ARCEP was right on its decision taken to resolve the dispute between France Telecom and Numericable and which concerned the conditions under which FT would provide access to its civil engineering for Numericable fibre deployments (see ARCEP's press release).

Carriers disclosure of their 4g networks details, required under proposed US bill

A member of the US House of Representatives proposed a Bill under which carriers shall provide details of their 4g networks in order to qualify as 4g under the proposed definition of what constitutes a 4g service. In addition the FCC shall make available to consumers the top ten carriers delivering 4g services in order to make informed choices (see geek.com). The FCC hailed the proposal stressing the importance of transparency in characteristics (broadband speeds, price etc.).

Italian state co-investment scheme on NGNs

The Executive Committee on NGA networks, after its meeting within the Ministry of Economic Development, released a draft agreement which other operators have to accede in to finance the NGA networks deployments by a state body, Fiberco (see the press release of the Ministry, in italian).

Moldova's NRA designates Moldtelcom as SMP in fixed call origination and transit markets

ANRCETI designated JSC Moldtelecom as SMP provider in the fixed wholesale call origination and transit markets (see the press release).

Thursday, 23 June 2011

Commission's Art. 7 Comments to the German NRA on the latter's cost orientation obligation in access to copper

BNetzA proposed to the European Commission, in relation to the costing methodology that should be used for the calculation of the copper access prices in Germany and, as a result of applying this cost model, to the proposed prices for the access to the unbundled copper loop, the unbundled copper sub-loop and the access to the OPAL/ISIS infrastructure in Germany" the following:

"In relation to capital costs BNetzA proposes to base its calculations within a BU-LRIC methodology solely on the gross replacement costs ("reine Bruttowiederbeschaffungskosten"), i.e. current costs. When applying the principle of cost-orientation it is, in the view of BNetzA, within the discretion of the national regulator to apply in relation to investment costs either historical costs or current costs...

With regards to the imputed interest rate used in the model, BNetzA proposes to change its approach when calculating the Weighted Average Cost of Capital (WACC) by replacing the previously used book value method with a Capital Asset Pricing Model (CAPM). BNetzA decided to use a sector specific and not a service specific risk premium. With regards to the period of depreciation BNetzA proposes to use a period of 20 years for the local copper loop based on the assumed economic period of use, which appears to be significantly shorter than the actual period of use for existing copper loops. BNetzA argues that this approach is in line with the model that uses current costs since a reference to the actual period of use would be inconsistent with such a model and would only be acceptable where actual or historical costs are used as an input...

In addition, BNetzA carries out a margin squeeze test, as required under national law, in order to assess whether the calculated cost-oriented wholesale price allows competitors a sufficient margin to compete on the retail level. Contrary to previous practice BNetzA in this notification only takes account of retail prices for bundled services offered by the SMP operator...".

The Commission, in its decision, made the following comments to BNetzA:

"Application of the margin squeeze test

The Commission notes that due to the choice of current costs as the underlying cost base the wholesale input costs for the application of the margin squeeze test pursuant to § 28 of the German Telecommunications Law (TKG) are higher than could be expected with an approach based on actual costs or a mixed approach. In addition, BNetzA's conclusion that there is a sufficient margin for access seekers to compete on the retail level appears to be based on the following two assumptions: (i) that only bundled products are taken into account when assessing the possible revenue for access seekers on the retail level and (ii) that the retail revenue is calculated by using a weighted average of the two main bundled products of the SMP operator, which includes alongside a basic product also a comfort product. As a result, based on the information available to the Commission, it cannot be ruled out that there is only a sufficient margin to compete for those access seekers who are able to offer a full portfolio of retail products, including bundled products offering services beyond a basic product.

In light of the above the Commission invites BNetzA to set out in its final measure how it intends to ensure effective competition in the entire retail market by guaranteeing that access seekers can expect to make a sufficient margin where they wish to compete only on a lower revenue segment of the retail market".

Commission's Art. 7 Comments to Irish NRA on the latter's price control obligation in the fixed call origination and termination

The European Commission, made in its decision, the following comments to ComReg as regards the latter's communicated modifications of the price control and trasparency obligations imposed in the fixed call origination and termination markets:

"Need to clarify the impact of the margin squeeze test

ComReg considers that the cost-orientation obligation imposed on Eircom on the relevant markets should be supplemented by a margin squeeze test in order to guarantee consistent pricing of fixed call origination and fixed call termination products, whether sold as independent wholesale inputs or as parts of the bundled SV service. The margin squeeze test sets price floors for wholesale call origination and call termination when sold within the SV service (to resellers), whereas independent call origination and call termination products are sold (to interconnected OAOs) at cost-oriented prices.

While acknowledging ComReg's concern to avoid discrimination between interconnected and switchless operators, the Commission cannot rule out that the margin squeeze test proposed in the draft measure could lead, de facto, to different (regulated) prices for the same products, depending on whether they are sold independently or as components of a bundle. It cannot be excluded that, in practice, two types of price regulation would co-exist for the same wholesale product, i.e. strict cost-orientation on the one hand and margin-based price floors on the other. The Commission therefore invites ComReg to clarify this in the measure finally adopted to ensure consistency between the already existing costorientation obligation and the price floors resulting from the application of the margin squeeze test.

Revision of the costing model for fixed call termination

ComReg is currently reviewing the interconnection markets and intends to revise the current FL-LRIC cost-accounting model in 2012.

In its decision on the 2007 market reviews, the Commission invited ComReg to revisit its analysis as soon as a common costing approach for fixed termination has been established at EU level. The Commission also described ComReg’s approach to alternative operators (i.e. differentiated price controls based on the asymmetry of interconnection services offered by Eircom and OAOs) as inconsistent with EU practice.

Against this background, the Commission welcomes the analysis in progress of the fixed interconnection markets and invites ComReg, in the context of the forthcoming revision of its costing model, to align the latter with the Commission`s Termination Rates Recommendation, which must be fully implemented by the end of 2012. Setting fixed termination rates for all SMP undertakings at the level of costs incurred by an efficient operator would allow ComReg to achieve symmetric price control remedies on the fixed termination market.

Finally, the Commission reminds ComReg that the revised cost model and resulting cost levels should be notified under Article 7(3) in conjunction with Recital 15 of the Framework Directive".

Wednesday, 22 June 2011

Commission fines Telekomunikacja Polska S.A € 127 million for abuse of dominant position

"From August 2005 until at least October 2009 TP engaged in practices which prevented or at least delayed the entry of competitors onto Polish broadband markets. Alternative operators encountered numerous difficulties to obtain access to TP's broadband wholesale products. For instance, TP proposed unreasonable conditions, delayed the negotiation processes, rejected orders in an unjustifiable manner and refused to provide reliable and accurate information to alternative operators.

Together, the above practices prevented alternative operators from competing effectively in the market and constituted an abuse of TP's dominant position on the Polish broadband market.

The Commission's antitrust decision requires TP to put an end to such conduct, in so far as it has not already done so, and not to engage in the same or equivalent practices in the future" (see the press release).

Romanian NRA's proposed strategy for the development of BWA Systems in the 3400-3800 MHz

"ANCOM has published on its website, for public consultation, a Strategy Paper on the national implementation and development of BWA (broadband wireless access) systems in the 3400 – 3800 MHz frequency band for 2011 – 2020, which includes the principles, conditions, procedure of granting the rights to use the spectrum in this band for broadband wireless services, as well as the method for its refarming" (see the press release).

Maltese NRA introduces functional internet access in the provision of universal service

MCA issued its final decision as regards "the requirements to be complied with by the USP (GO Plc) for access at a fixed location, in relation to the provision of a connection capable of supporting functional Internet access at a specified minimum broadband data rate". The minimum data rate is set at 4 Mbps (see the press release).

Portuguese NRA issues final decision on excessive burden and the calculation of net costs

ANACOM issued its final decision "on the definition of excessive burden and on the methodology to be used for calculating the net costs of providing the universal service (US) of electronic communications" (see the press release).

French governement launches consultation on the trasposition of the telecoms package

Minister Besson has launched a consultation concerning the trasposition of the telecoms package into the French legal order (see the press release, in french). It shall be reminded that the telecoms package should have been trasposed by Meber States by 25 May 2011.

Court of Appeals denies appeal hearing to BT and Talk Talk on the DEA

BT and Talk Talk were denied the hearing of their appeal against the High Court's decision which rejected the review of the Digital Economy Act (see out-law.com).

The Commission raises concerns over Belgian NRA's regulatory obligations imposed on cable operators

The Commission, in its press release, raises its concenrs, in regards to BIPT's review of the broadcasting and broadband markets, imposing on cable operators with the obligations to 1) resell their analogue TV programming, 2) offer access to their digital TV platform and 3) resell their broadband internet products (the two latter obligations would not however extend to Belgacom), to alternative operators. BIPT on its behalf states that the Commission has not in reality posed fundamental objections to its reviews and remedies foreseen (see the press release).

OFCOM endorses spectrum trading

UK's NRA, OFCOM, decided to introduce spetcrum trading following its consultation (see the statement). The rules come into force on 4 July 2011.

Monday, 20 June 2011

US DoJ issues updated Merger Remedies Guide

The US Department of Justice relased its updated Merger Remedies Guide.

Draft Guidance Paper − Quantifying harm in actions for damages based on breaches of Article 101 or 102 of the Treaty

The European Commission launched a consultation on its Draft Guidance Paper − Quantifying harm in actions for damages based on breaches of Article 101 or 102 of the Treaty (see the relevant page).

International coordination between Finland and Russia on the 900MHz

Finland and Russia signed a coordination agreement as regards the 900 MHz range. Further work is endorsed to be done at 1800 MHz as well (see the Finnish NRA's press release).

The French NRA denies involvement in alleged envisaged merger of CSA, ARCEP and HADOPI

ARCEP, states in its press release that "according to the Friday, 17th June issue of La Lettre A, the Government is preparing legislation whose purpose is to merge regulatory authorities ARCEP (electronic communications and postal affairs), CSA (broadcasting) and HADOPI (distribution and protection of works on the Internet), and that ARCEP departments were "already working on it".

As far as it is concerned, ARCEP formally denies that it is participating in any such endeavour".

The European Commission decided to refer the acquisition of KBW, a German cable company, by Liberty Global to the German NCA

"The European Commission has referred the assessment of the proposed acquisition of Kabel Baden-Württemberg (KBW) by Liberty Global Inc. (LGI) to the German competition authority (Bundeskartellamt) at the latter request" (see the Commission's and Bundeskartellamt's press releases).

Dutch net neutrality

Last week the Dutch Parliament approved and thus enacted the widely discussed net neutrality rule upon Dutch ISPs (see cellular-news.com). The Law will have to be approved by the Senate as well which is nevertheless in general the case.

Mergers approved by or notified to, the European Commission in the TMT sector

The Commission received notification of three mergers, candidates for simplified procedure; 1) Toshiba/Landis+Gyr, 2) KKR/Versatel and 3) Access Industries/Warner Music Group.

The Commission has approved also the Vivendi/SFR merger.

Ofcom issues draft determination on Openreach and each of Sky and Opal disputes on LLU charges

As the UK's NRA puts it in its draft determination of the disputes between Openreach and each of Opal and Sky, "...Ofcom was found to have set the 2009 price control incorrectly and in that sense there was some overpayment by Opal and Sky to Openreach for the period before the revised price control came into effect. However we also note our view that Openreach complied with the regulatory obligations which Ofcom had set. We consider that legal and regulatory certainty in conditions set by Ofcom is important".

French NRA finalises the framework for NGA

ARCEP in its, press release, states that after its review of markets 4 and 5, and issuing the last two remaining recommendations the framework for the deployment of NGAs is now in place.

UKE annulls following Court's ruling, the tender for the 1710-1730 and 1805-1825 frequency ranges

The Polish NRA, annulled following the Supreme Administrative Court's ruling, the tender for the 1710-1730 and 1805-1825 frequency ranges as regards the offer submitted by Polska Telefonia Cyfrowa (see UKE's press release).

UK Competition Commission's response to the Government’s consultation on reforms to the UK competition regime

The CC has submitted its official response to the consultation on the review of the competition regime, stating its favourness to the merger of the OFT and the CC (see also the press release).

CJEU's ruling in Pfleiderer case - Access to documents provided under a national leniency programme

The Court in its decision in the Pfleiderer case (C-360/09), ruled that "...that the provisions of European Union law on cartels, and in particular Regulation No 1/2003, must be interpreted as not precluding a person who has been adversely affected by an infringement of European Union competition law and is seeking to obtain damages from being granted access to documents relating to a leniency procedure involving the perpetrator of that infringement. It is, however, for the courts and tribunals of the Member States, on the basis of their national law, to determine the conditions under which such access must be permitted or refused by weighing the interests protected by European Union law" (para 32).

The Court moreover states: " Accordingly, in the consideration of an application for access to documents relating to a leniency programme submitted by a person who is seeking to obtain damages from another person who has taken advantage of such a leniency programme, it is necessary to ensure that the applicable national rules are not less favourable than those governing similar domestic claims and that they do not operate in such a way as to make it practically impossible or excessively difficult to obtain such compensation (see, to that effect, Courage and Crehan, paragraph 29) and to weigh the respective interests in favour of disclosure of the information and in favour of the protection of that information provided voluntarily by the applicant for leniency".

The road opens up, thus, at least to some extent, for private parties claiming damages to gain access to documents handed down under a national leniency programme and after the national legal requirements are met. In any case, the ruling is of relevance to telcoms as well, since most NRAs have in place leniency programmes by reference to the equivalent leniency programmes adopted by NCAs.

Wednesday, 15 June 2011

Digital Agenda Assembly - Interval

Since i'm leaving today for the Digital Agenda Assembly and on Thursday and Friday my "agenda" is quite full, i will resume updating the blog again from Monday the 20th.

French Competition Authority's opinion on the NRA's proposed regulation of submarine cables in the Antilles

The French Competition Authority endorsed in its opinion ARCEP's proposed regulation of the submarine cables in Saint-Barthélémy since the areas is served through only one cable but objects the regulation in Saint-Martin which is served by several cables (see the Competition Authority's press release).

French NRA's call for applications for 4g services in 800 and 2600 MHz

ARCEP has published its invitation for applications for the 800 and 2600 MHz through which bands 4g services will be delivered (see the press release).

Art. 7 Comments to OFCOM on the latter's charge control remedy on LLU and WLR services

The Commission, in its Art. 7 Decision, had no comments to make on OFCOM's charge control remedy on BT's (Openreach) Local Loop Unbundling and Wholesale Line Rental services. OFCOM's charge proposed charge control will run up until 31 March 2014;

- Costing methodology:

"Ofcom proposes to continue using current cost accounting (CCA) and fully allocated costs (FAC) as the basis for setting the LLU and WLR prices. Nonetheless, Ofcom explains that valuing all BT’s assets at replacement cost (CCA) is not appropriate because no operator is expected to build a new nationwide access network, and this would only lead to over-compensation for BT. Therefore, Ofcom retains the adjustment of the Regulatory Asset Value (RAV) established in 2005 and values pre-1997 assets on the basis of historic cost accounting (HCA) and post-1997 assets on the basis of CCA.

In light of on-going major technological changes, Ofcom applies an ‘anchor product pricing’ instead of a ‘modern equivalent asset’ approach. Under the former, the price (and quality) of existing services are ‘anchored’ by the legacy technology, even if the services are actually provided via a new technology. As for the implications of this approach on NGA regulation, Ofcom explains that even if Openreach introduces fibre access technology, it will not be allowed to increase the prices for products with the current level of quality.

Ofcom maintains that BT initially plans to roll out overlay fibre, i.e. leaving its existing copper network in place. Other communication providers will therefore have the choice of buying the existing copper products (which are subject to charge controls) or the fibre network products (which are not subject to cost orientation).14 If in the future the copper network is removed, Ofcom would expect to apply the ‘anchor pricing approach’ and require BT to provide a service of equivalent quality to the one provided with existing copper products, at a regulated price, based on the hypothetical continuation of the existing copper technology".

- Price Cap:

"Ofcom proposes an RPI — X charge control for the different LLU and WLR services/baskets up to March 2014...

As to the LLU charge control structure, Ofcom intends to set separate individual controls for MPF and SMPF rental and set baskets for ancillary services that are to be grouped around the underlying rental services: (i) MPF ancillary services, (ii) SMPF ancillary services and (iii) comingling services (required for both MPF and SMPF services). Ofcom sets individual price caps not only on each LLU rental charge but also on each of the three baskets.

As to the WLR charge control structure, Ofcom proposes separate individual controls for WLR and such ancillary services as WLR to WLR transfer and WLR new connection".

Art. 7 Comments to OFCOM on the latter's price control as regards ISDN30 exchange lines

The Commission, in its Art. 7 Decision, had no comments to make on OFCOM's price control remedy as regards ISDN30 exchange lines. OFCOM's decision follows:

"Ofcom is concerned that the price of core wholesale ISDN30 services (i.e. connections, rentals and transfers) is likely to be above the competitive level and proposes therefore to introduce an RPI-X charge control up to 31 March 2014.

In order to implement the charge control Ofcom proposes a number of adjustments to Openreach’s base year costs in 2009/2010 (in particular to take into account the heavily depreciated ISDN30 assets).

Furthermore, Ofcom proposes to forecast the base year costs for wholesale ISDN30 services in 2013/2014 by using a range of assumption including volume forecasts, efficiency gains, and Openreach’s Weighted Average Cost of Capital (WACC) for wholesale ISDN30 services".

British regulator to resolve dispute on BT's sub loop unbundling charges

OFCOM has undertaken the dispute between DLR and Thales on one hand and BT (Openreach) on the other hand. Thales which is the infrastructure manager of DLR's fibe network, alleges that BT's sub loop unbundling charges are excessive (see OFCOM's press release).

Tuesday, 14 June 2011

CAT rejects BT's request for permission to appeal its ruling on PPC's

The UK Competition Appeal Tribunal did not grant BT permission to appeal its decision on the Partial Private Circuits case (see an older post).

French NRA gives to consultation and submits to the Commission its draft decision on the review of fixed telephony market

ARCEP has released its draft decision on its review of the fixed telephony market, launched a consultation and transmitted its decision to the European Commission for further consultation (see the press release).

Friday, 10 June 2011

O2 Telefonica warns OFCOM that spectum floors constitute illegal state aid

In regards to the spectrum refarming process and the relative auction in the 800MHz in the UK that OFCOM organises, O2 alleges:

"...that the proposed spectrum floors are a state aid and are therefore illegal under EU law. The spectrum floors would distort the auction process, allowing all bidders, except Vodafone and O2, to potentially acquire spectrum at discounted prices. Ofcom’s own figures suggest this effect could cost taxpayers £1bn.

The proposed floors, and the argument that Vodafone and ourselves already have enough sub-1GHz spectrum, are based on the mistaken belief that 800 MHz and 900 MHz are directly comparable spectrums. They are not. Our response to Ofcom clearly explains why.

Ultimately this auction is about new, next generation services. It is not about 2G and 3G, but about the future. It should therefore be used as an opportunity to provide fair, open and equal access to newly available spectrum.

So while we support the proposed auction structure and spectrum caps, Ofcom is faced with a difficult choice of either revisiting its spectrum floors proposal or discarding the floors and getting on with the process" (see the full press release).

Romanian NRA consults on the introduction of MVNOs

"ANCOM has launched today a new public consultation by publishing a questionnaire whose goal is to find out the opinion of the Romanian communications market actors with regard to the provision of mobile virtual networks and the conditions related to the presence of mobile virtual network operators (MVNO) on the national mobile communications market (see the press release).

Italian regulator issues rules and procedures on the assignment of 800, 1800, 2000 and 2600 MHz

AGCOM has released its rules and procedures on the assignment of the 800, 1800, 2000 and 2600 MHz blocks and on the norms for effective competition, to be followed as regards the other frequencies granted for electonic communications in the 900, 1800 and 2100 MHz (see AGCOM's relevant page, in italian).

Thursday, 9 June 2011

DIGITAL AGENDA ASSEMBLY - Facilitating and Financing Broadband Projects

Since i will be carrying out the animation of the second parallel workshop (Facilitating wide-scale broadband investments) of Workshop 5 (Facilitating and Financing Broadband Projects) of the Digital Agenda Assembly which will take place in Brussels on the 16th of June 2011, i hereby provide a list of the event's resources that may assist you in following the workshop:

- Follow in Twitter, @DAA_WS5_2. Most things beeing said during the workshop will be twitted.

- Follow in twitter hashtag: #daa11broadband. Any issue in connection to the issues of Workshop 5, will have this hashtag. If you want to share some thoughts on the issues to be discussed you may also use the said hashtag.

- Check the Assembly's relevant page and blog.

Moldova's regulator designates JSC Moldtelecom as SMP provider in retail fixed access for end-users

ANRCETI has designated JSC Moldtelecom as the SMP provider in the market of retail fixed access for end-users (see the press release).

Maltese NRA consults on MTRs

MCA has launched its consultation on the review of the wholesale mobile termination rates.

Advocacy group files complaint before the FCC for Verizon's alleged restrictions on 4g tethering

An advocacy group filed a complaint before the FCC alleging that Verizon Wireless blocks tethering as regards its LTE service and in that way, FCC rules are violated (see news.cnet.com).

British NRA's new dspute resolution guidelines

OFCOM has concluded its consultation and issued its new dispute resolution guidelines (see the relevant page).

UK's NRA consultation on BT's request for exemption from the 2005 Undertakings for certain high bandwidth access services

BT has requested "for an exemption from the requirement in the Undertakings to provide high bandwidth (i.e., bandwidths above 1 Gbit/s) Ethernet access services and optical spectrum access services that are supplied by Openreach to other Communication Providers ("CPs") and BT's downstream divisions under Equivalence of Inputs ("EoI")...BT has requested an exemption because it considers these services to be supplied in a competitive market and it considers that Openreach having to offer these services on an EoI basis restricts its flexibility to compete effectively to the detriment of itself, CPs and their end users. In the absence of EoI obligations, Openreach would be able to negotiate prices and contractual terms on an individual basis". In view of that request, OFCOM has launched a consultation seeking comments.

UK's NRA consultation on technical licence conditions for 800 MHz and 2.6 GHz

OFCOM has launched a consultation on the technical licence conditions for the 800 MHz and 2.6 GHz.

UK's NRA consultation on interference in the 800MHz

In view of the joint auctioning of the 800 and 2.600 MHz and the refarming which will take place in these frequencies, OFCOM consults on the possible intereference that mobile base stations may inflict so that consumers may have problems viewing DTT.

Tuesday, 7 June 2011

Reflections from the Greek NRA's 6th Conference

On 2 and 3 June 2011, EETT's 6th Conference took place. I hereby provided some bullet-points summarising the key issues, to my view, that were discussed, followed by some thoughts of mine as well:

- Greek FttH plan:

The possible FttH development models were mentioned. The incumbent, OTE, followed its own agenda on the discussion, criticising EETT for putting a 6 months freeze to the commercial launch of its VDSL product. EETT's President on the other hand, mentioned that had OTE communicated VDSL's costs, the NRA would not have blocked it. So far, OTE views VDSL as the only sustainable infrastructure and projects the fact that the company is ready to deploy it and that in the future it may extend the product to FttH. The other operators, accompanied by EETT, stood on the Greek State's FttH plan. Their view is that it is impossible to deploy in all areas FttH and stated that a possible structure to carry out the establishment and control of the infrastructure could be an entity composed by the State's and operators' input. The tricky part, is that operators' input would be the contribution of their networks, the extend of which would reflect their shareholding (and level of investment funding) in that entity. As expected, OTE kept its distance from that perspective and to my view no one can blame it. The are two simple reasons for OTE to be reluctant. First, in that scenario, the entity's major shareholder would be OTE as it posseses the majority of the networks in Greece. However, the entity as administrator would have to impose non-discriminatory prices to all operators. The latter, combined with the fact that OTE will have to finance most of the fibre network and that a long time period is required for that entity to show profits, deters OTE from concurring to such a plan, under which, in reality, alternative operators will enjoy a free-ride. The alternative to circumvent the problem could be the adoption by the entity of assymetric charges depending on each operator's contribution, but of course there are various legal grounds suggesting that this could not realise. Secondly, OTE, is the only one ready to launch VDSL and has already invested on that project. Why would it join the state plan, and not use its own infrastructure having a return from the access charges imposed on other operators?

- Tasposition of the telecoms package:

The European Commission's official, responsible on these matters, Mr. Grussman, stated that just a few States have communicated the transposal of the telecoms package into their national legal order, which means that in the next two forthcoming months, infringement proceedings will be launched.

- 900 Mhz auction and refarming:

Wind's CEO, Mr. Zarkalis, stressed the fact, that the auction plan as it stands is flawed in three ways. First, the State's target as regards fees is excessive (60 million euros for a 2X5 MHz block for 15 years whereas the equivalent fees in the rest of Europe is 20 million euros). Secondly, the auctioning procedure is likely to raise the price to excessive levels, inflicting a severe financial pressure on Wind and benefitting Cosmote. Thirdly, there should be given a time extension of the existing licenses and organise an auction in th expiry of all licenses to prevent market distortions (as other States have done, see for example Ireland). Lastly, the lack of the Army Forces intention to give up the 2X5 Mhz block in the 900MHz was also criticised. Vodafone concurred with Mr. Zarkalis' thoughts while Cosmote differentiated itself on the auctioning method which was purpotedly satisfactory.

- DTV:

As two blocks have been formed in the market, the national broadcaster, ET, and the joint venture of the rest of private channels, Digea, there were diverse views on the high definition issues and alignment on one issue. The latter, regards, the State's idleness in providing a concrete framework for the digital transition. As the CEO of Digea, put it, broadcasters are bying lots in the moon, since they are investing in DTV while it is not sure at all they will be given the respective frequencies. As far as high definition is concerned, ET's CEO mentioned that it was not arbitrary to broadcast programmes in HD and Digea's inability to broadcast in HD derives from the State's inability to move forward swiftly in letting more stations to broadcast per block while ET enjoys the capacity needed for HD broadcasts. Digea's CEO talked about discrimininatory treatment.

Monday, 6 June 2011

Italian NRA approves incumbent's charges for wholesale serviices in leased lines

AGCOM has approved Telecom Italia's wholesale charges for the provision of services in the lease lines market (see the press release, in italian).

Italian NRA's consultation on ip interconnection and interoperability for the provision of VoIP services

AGCOM has put into consultation, the ip interconnection and interoperability issue for the effective provision of VoIP services (see the NRA's relevant page, in italian).

Moldova's NRA consults on roaming

ANRCETI has launched its consultation regarding the Administrative Board's Decision on approving the 2007 Regulations on Provision of National Roaming Services in Mobile Terrestrial Networks (see the press release).

Call for parties to apply for Belgium's 4g auction

"Rights of use for radio frequencies will be auctioned for the first time in the 2,6 GHz band (4Grights of use for radio frequencies). Currently no operator has rights of use for radio frequencies in the 2500 – 2690 MHz band in Belgium.

...BIPT will publish the results of the study regarding the measuring campaign to determine the radar degradation in the 2700‐2900 MHz band due to Wimax and LTE signals, as mentioned in the BIPT Council Communication of 7 December 2010, as stipulated at the end of June 2011 on the website “www.auction2011.be”. Afterwards the BIPT Council will adopt a decision on the matter. In order to allow all parties the necessary time to examine this, the deadline for submission of applications is set on 14 October 2011 instead of 15 September 2011 as was originally specified in the 4G memorandum" (see the call).

Call for parties to apply for Sweden's auction on 1800 MHz announced

PTS has released its call for interested parties to submit their applications by 2 September 2011 in regards to the 1800 MHz auction.

"PTS is now organising an auction to assign spectrum of 2×35 MHz. The planned start date for the auction is 11 October 2011, with 2 September as the deadline for PTS to receive applications to participate in the auction.

In addition there are already licence holders in the band that own 2x35 MHz in total. PTS proposes that 2x5 MHz in the band shall be exempt from a licence obligation; this means that these frequencies can be used by anyone without the need for a licence from PTS, reducing barriers to entry".

EDPS Opinion on the evaluation of the Data Retention Directive

The European Data Protection Supervisor has released its opinion on the evaluation of the Data Retention Directive, mentioning the lack of clarity on which specific data shall be retained and under which circumstances and way of process shall these data be passed on to State bodies by ISPs (see the press release and the opinion).

Vice Attorney General of the Greek Supreme Court endorses provision of users' data for most offences

The Vice Attorney of the Greek Supreme Court ("Areios Pagos"), delivered his opinion (in greek), in which he re-affirmed previous opinions by which users' data whithin the ambit of electronic communications, should be provided by ISPs to the Police following the latter's request while investigating an offence. The Attorney suugests that users' data shall be provided, even in case of an investigation of a simple offence. The problem is first, the division in the Greek legal system of the private data in electronic communications between external and internal ones. The Vice Attorney, suggests that ISPs will have to deliver external data (names, location) and in that sense the most austere legal provision for the provision of internal data (the content of the communication) which require the investigation of a serious criminal offence do not apply. The second problem is that Greece transposed the Data Retention Directive into its national legal order quite recently with Law 3917/2011. This means that ISPs, in case of provision of users' data, will face the abovementioned Law's penalties (for a nice overview and thoughts on the opinion, see e-lawyer, in greek).

The abovementioned issue, is not of course new in the EU. The lack of clarity of the Data Retention Directive on which data are subject to the Directive and the lack of regulation on which authorities and on what specific occasions shall be given by ISPs to State bodies, is criticised by the European Data Protection Supervisor (see opinion and press release).

Wednesday, 1 June 2011

Irish NRA issues decision on the costing principles and methodology of universal service

ComReg has issued its decision determining the principles and the methodology followed for the calculation of the net cost that an operator incurs in providing universal services so that the latter may apply for funding.

BT and Talk Talk will appeal the High Court ruling on the DEA judicial review

BT and Talk Talk decided to appeal the High Court's ruling on the points that the latter rejected the operator's pleadings that these elements of the Digital Economy Act breached EU law (see their press release).

Commission's Art. 7 Comments to the French NRA on the latter's 3rd review of markets 4 and 5

The Commission, in its decision, makes the following comments to ARCEP on the latter's review of the physical network infrastructure access and wholesale broadband access markets:

1) "Lack of SMP remedies on fibre infrastructures in the WPNIA and WBA markets

The Commission notes that, in relation to FT's fibre infrastructures, ARCEP does not consider it justified or proportionate to mandate SMP remedies at this stage. ARCEP specifically discards the imposition of fibre unbundling and fibre-based bitstream access. To substantiate its approach, ARCEP explains that the use of FT's civil engineering infrastructure by alternative operators has grown significantly since the previous market analysis. Furthermore ARCEP explains that the symmetric obligations related to the access to the terminating segment of fibre networks have allowed for market entry and that the implemented symmetric regulation will, in principle, promote the emergence of wholesale offers. Finally, ARCEP argues that, so far, a cable-TV operator appears to be the leading operator at retail level on the high speed broadband market segment and will remain so for the timeframe of the market review.

The Commission reminds ARCEP that where the SMP operator deploys FTTH, NRAs should in principle mandate unbundled access to the fibre loop. Exceptions from this general rule could only be justified where several alternative infrastructures are present and competitive access offers (in principle on the basis of unbundling) are likely to result in effective competition at retail level. Further to that, where SMP is found on market 5, and where there is no effective access to the unbundled fibre loop resulting in effective retail competition, wholesale broadband access remedies should be maintained.

Against this background, the Commission notes that while several co-investment projects for deploying FTTH networks are being implemented or developed in very dense areas, no such co-investment projects have been implemented or developed outside the very dense areas. The Commission would also like to stress that FT's market shares on the retail broadband markets segments remain high, particularly outside the very dense areas. Moreover, it is not clear whether investment in very dense areas will be completed during the period covered by the present market review and whether there will be competitive access offers.

Furthermore, even if FTTH co-investments were to occur outside the very dense areas within the timeframe of the review, FT' would remain the sole operator with a nationwide access network and an established customer base in those areas and, in some instances, the only operator able to supply the necessary ancillary infrastructures (backhaul link).

Consequently, the Commission considers that, absent any SMP remedies, FT could foreclose the retail broadband and the emerging high speed broadband market segments, particularly outside the very dense areas. The constraints stemming from the cable operator appear limited or non-existent outside the very dense areas, and the emergence of non-regulated wholesale offers in the communes, in which only a limited number of operators will initiate coinvestments, may be doubtful.

In this regard, the Commission notes that ARCEP proposes to revise its market analysis before the end of the market review period, if necessary, and that ARCEP sets a review clause according to which it will assess the need to impose additional SMP remedies with regard to the fibre lines 18 months after the entry into force of the final measure.

However, the Commission reiterates, in line with its previous comments, the need to establish without delay a clear and predictable SMP regulation in line with the NGA Recommendation according to which NRAs should, in principle, mandate unbundled access to the fibre loop and wholesale broadband access remedies. The Commission therefore calls on ARCEP to re-assess the need, in line with Article 8 of the Access Directive as well as Recommend 22 and Recommend 31 of the NGA Recommendation, to impose, already for the time frame of the current market review, wholesale fibre access remedies on both markets at hand, especially in those geographic areas which ARCEP has identified as being non-competitive and not prone to fibre network duplication within the time frame of the market review".

2)"Need to appropriately assess the differences in competitive conditions between geographic areas and impose or adapt SMP regulation

The Commission notes that on the WBA market, ARCEP has found differences in the competitive conditions between two geographic areas on the basis of the presence of one or more operators providing wholesale offers (including cable and FTTx), and proposes to vary DSL remedies accordingly. However, ARCEP does neither include the number of LLU operators per MDF, nor market shares, as a relevant criterion.

The Commission invites ARCEP to undertake a more thorough assessment on the basis of all relevant structural and behavioural factors (including markets shares and their evolution over time, differences in prices, products/service functionalities and marketing strategies) and to assess the need to impose wholesale residential or business remedies (independently of the underlying technology) if appropriate. In particular, the Commission invites ARCEP to assess the real technical and economic ability of access seekers to switch to an alternative (cable- or FTTx-based) bitstream product to obtain conclusive evidence on the degree of competition. In this respect, it may be relevant to address the constraints stemming from the presence of cable-based bitstream at regional level rather than at each MDF.

ARCEP does not identify differences in competitive conditions on the WPNIA market. Based on the observed difference in parallel infrastructure deployment, the Commission invites ARCEP to identify areas where fibre-based infrastructure duplication is underway and where, on the basis of wholesale offers, the retail market is likely to show signs of effective competition already in the coming 18 months. The specific competition conditions due to co-investments in parallel FTTH networks, in combination with competitive access offers, may justify, in some instances, the absence of regulated wholesale access imposed under the SMP regime. Conversely, where those specific competitive conditions are not met, the Commission would like to call upon ARCEP to ensure market entry and avoid foreclosure by imposing appropriate wholesale access remedies as well as ancillary services on the SMP operator".

3) "Exclusion of cable from the wholesale broadband access market

In view of the above, the Commission asks ARCEP to closely monitor the supply and demand characteristics for bitstream products in France. In particular, ARCEP could examine whether access seekers would not have the incentive and the ability to complement, and even replace in some geographic areas, their DSLbased bitstream offer with a cable-based bitstream offer. ARCEP itself recognizes that the supply of cable-based bitstream may constrain DSL-based bitstream. Should such a substitution arise in the timeframe of the market review, ARCEP should modify the proposed market definition to include cable-based bitstream".

4) "Appropriateness of the non-eviction obligation and notification requirements as to the price control obligation

The Commission notes that ARCEP imposes on FT cost-oriented bitstream tariffs coupled with a non-eviction obligation only with regard to the provision of services to business customers. This aims to guarantee coherence between the prices applied between wholesale broadband and local loop access prices (economic space). However, the Commission also notes that according to ARCEP unbundling by operators solely active on the business segment has considerably slowed down as the optimal coverage has been reached and that unbundling over the past review has essentially been carried out by mixed residential/business operators. While ARCEP itself indicates that it would no longer be appropriate to maintain a non-eviction tariff for operators solely active on the business segment, it nevertheless proposes to implement a revised non-eviction rule to protect third parties and public entities already having invested in unbundling. ARCEP thus proposes to continue preventing FT from practicing eviction tariffs for its WBA offers addressing business customers.

The Commission considers ARCEP's justification for maintaining the noneviction obligation to be insufficiently substantiated. The Commission therefore invites ARCEP to provide further reasons for maintaining this obligation. ARCEP should clearly demonstrate, against the nature of the problem identified, that such obligation is justified and proportionate in the light of the objectives laid down in Article 8 of the Framework Directive. Furthermore, should ARCEP maintain, on the basis of its further assessment, that its current cost models underlying FT's regulated tariffs require updating to reflect the costs corresponding to those of an efficient operator providing both residential and professional offers in their respective geographic areas, then ARCEP is reminded that any regulatory measures imposing or amending wholesale access prices are required to be consulted nationally in accordance with Article 6 of the Framework Directive and to be notified under Article 7(3) of the Framework Directive".