Wednesday, 1 May 2013

Commission's Art. 7 Comments to the Swedish NRA on the latter's draft broadcasting transmission services review

The European Commission made the following comments, in its decision addressed to PTS on the latter's draft reviews of wholesale market for free TV over the terrestrial platform and that for national analogue broadcasting radio:

"Need to monitor market developments
The market for broadcasting transmission services is no longer listed in the Recommendation on relevant markets due to evidence of greater platform competition in the majority of Member States and fewer capacity constraints which can be attributed to the transition from analogue to digital transmission platforms. These changes have led to a situation where despite the possible existence of market entry barriers, the market dynamics are such that the second criterion of the three criteria test is not satisfied. 
The Commission however recognises the specificities of the Swedish market in which the described market dynamics have not yet materialised. More specifically, the current broadcasting licences of public broadcasters SVT and UR as well as the fact that digital radio broadcasting is still underdeveloped, make it impossible for them to use any other broadcasting platform than the terrestrial one or to switch to another business model in order to ensure nationwide coverage of services. Nevertheless, the Commission invites PTS to closely monitor market developments, particularly with regard to the below described trends.
The Commission notes that a series of trends in Sweden might lead in the future to adjustments to the market definition. In particular, the Commission notes that since 2009 the number of TV subscriptions via fibre and fibre LAN has increased by 60%. The majority of those new subscriptions are assignable to apartment blocks but about 11% of them belong to single family houses, which according to PTS' previous analysis were the main retail customers of free terrestrial TV. In that context, TV services are increasingly being offered as a part of a bundle with broadband services, making the monthly amount paid for the TV service alone less evident for the consumer. These developments might put into question the current (narrow) retail market definition, and the second criterion of the three criteria test (absence of tendency towards effective competition). The Commission therefore invites PTS to closely monitor these  developments, and, if needed, adjust the current retail market definition which distinguishes between pay and free TV.
National analogue broadcasting radio
The Commission takes note of the fact that the transition from analogue to digital radio has not yet occurred in Sweden, although a legislative act in this regard is expected soon. The act would, at least according to the current proposal, establish the licencing requirements for digital radio transmission as of 1 January 2014 and possibly also set a date for the analogue radio switch off. In light of the fact that this proposal could have a substantial impact on the market, the Commission invites PTS to carry out a new market analysis or update the current one as soon as possible after the expected legislative act comes into force."