Wednesday, 8 May 2013

BNetzA issues Annual report

The German NRA issued its 2012 Annual report (see the press release).

Commission consults on amended GBER on state aid measures

The European Commission launched its consultation on its draft amended General Block Exemption Regulation (the GBER) on state aid measures (see related page).

Commission sends SOs to Motorola on potential misuse of mobile phone standard-essential patents

"The European Commission has informed Motorola Mobility of its preliminary view that the company's seeking and enforcing of an injunction against Apple in Germany on the basis of its mobile phone standard-essential patents ("SEPs") amounts to an abuse of a dominant position prohibited by EU antitrust rules. While recourse to injunctions is a possible remedy for patent infringements, such conduct may be abusive where SEPs are concerned and the potential licensee is willing to enter into a licence on Fair, Reasonable and Non-Discriminatory (so-called "FRAND") terms. In such a situation, the Commission considers at this stage that dominant SEP holders should not have recourse to injunctions, which generally involve a prohibition to sell the product infringing the patent, in order to distort licensing negotiations and impose unjustified licensing terms on patent licensees. Such misuse of SEPs could ultimately harm consumers. The sending of a Statement of Objections does not prejudge the final outcome of the investigation.


Standards bodies generally require members to commit to license on FRAND terms the patents that they have declared essential for a standard. This commitment is designed to ensure effective access to a standard for all market players and to prevent "hold-up" by a single SEP holder. Indeed, access to those patents which are standard-essential is a precondition for any company to sell interoperable products in the market. Such access allows consumers to have a wider choice of interoperable products while ensuring that SEP holders are adequately remunerated for their intellectual property.
The Motorola Mobility SEPs in question relate to the European Telecommunications Standardisation Institute's (ETSI) GPRS standard, part of the GSM standard, which is a key industry standard for mobile and wireless communications. When this standard was adopted in Europe, Motorola Mobility gave a commitment that it would license the patents which it had declared essential to the standard on FRAND terms. Nevertheless, Motorola Mobility sought an injunction against Apple in Germany on the basis of a GPRS SEP and, after the injunction was granted, went on to enforce it, even when Apple had declared that it would be willing to be bound by a determination of the FRAND royalties by the German court.

Today's Statement of Objections sets out the Commission's preliminary view that under the specific circumstances of this case - a previous commitment to license SEPs on FRAND terms and the agreement of Apple to accept a binding determination of the terms of a FRAND licence for SEPs by a third party - recourse to injunctions harms competition. The Commission is concerned that the threat of injunctions can distort licensing negotiations and lead to licensing terms that the licensee of the SEP would not have accepted absent this threat. This would lead to less consumer choice" (see the full press release).

Commission objects Austrian regulator's wholesale terminating segments leased lines market review

The European Commission opened phase II regarding RTR's wholesale terminating segments leased lines market review. The Commission object's the regulator's product market definition and SMP assessment (see the press release and the decision for more details).

Wednesday, 1 May 2013

OFCOM opens investigations against BT for alleged margin squeeze in superfast broadband

"Ofcom has received a complaint from TTG alleging that BT has been abusing a dominant position in breach of the Chapter II prohibition in the Act and Article 102 TFEU in relation to the supply of superfast broadband (‘SFBB’). Specifically, TTG alleges that BT has failed to maintain a sufficient margin between its upstream costs and downstream prices, thereby operating an abusive margin squeeze.

As set out in section 25 of the Act, Ofcom may conduct an investigation where there are reasonable grounds for suspecting that the Chapter II prohibition and/or the prohibition in Article 102 TFEU has been infringed. In addition to the Chapter II prohibition in the Act, Ofcom has the power to apply Article 102 TFEU in full.

Ofcom has now opened an investigation under section 25 of the Act into the matters raised by TTG’s complaint and will consider whether BT has abused a dominant position under UK and/or EU competition law." (see related page).

FCC adopts cots model regarding Phase II

"In the USF/ICC Transformation Order, the Commission comprehensively reformed and modernized the universal service and intercarrier compensation systems to maintain voice service and extend broadband-capable infrastructure. As part of the reform, the Commission adopted a framework for providing support to areas served by price cap carriers known as Phase II of the Connect America Fund. An estimated eighty-five percent of the approximately 6.3 million locations in the nation that lack access today to terrestrial fixed broadband at or above the Commission’s broadband speed benchmark live in areas served by price cap carriers...Specifically, the Commission will provide support through “a combination of competitive bidding and a new forward-looking model of the cost of constructing modern multi-purpose networks." Using the cost model to “estimate the support necessary to serve areas where costs are above a specified benchmark, but below a second ‘extremely high-cost’ benchmark,” the Commission will offer each price cap local exchange carrier (LEC) “a model-derived support amount [for a period of five years] in exchange for a commitment to serve all locations in its service territory in a state that, based on the model, fall within the high-cost range and are not served by an competing, unsubsidized provider" (see the Order).

Polish watchdog finds ITI Neovision broke the law by unilaterally altering its satellite television programmes offer

"ITI Neovision broke the law by launching „nc+” offer and informing about its terms and conditions – decided the President of UOKiK and consequently ordered to eliminate without delay the results of contested practice towards its subscribers. Its clients may still use the agreements based on current terms. The company is to fulfil the information obligations and is imposed a fine of nearly PLN 11 mln for violating collective consumer interests" (see the press release).

ANCOM publishes framework decision regarding access of providers in private land

"...the National Authority for Management and Regulation in Communications (ANCOM) has published on its website the Framework-Agreement for the access on the private property for the purpose of the installation, maintenance, replacement or relocation of public electronic communications networks or of the associated supporting infrastructure elements, according to its attributions pursuant to Law no.154/2012 regarding the regime of the electronic communications networks infrastructure." (see the press release).

New Dutch super-authority issues Market Outlook, draft Strategy Plan and Key 2013 Priorities

ACM issued its Market Outlook, draft Strategy Plan and Key 2013 Priorities

ARCEP seeks Commision's approval on proposed prolongation of 2010 leased lines market analysis

The French NRA requested the Commission's approval to extend its 2010 leased lines (market 6) market analysi till 1 July 2014 (see press release and draft decision, in french).

PTS issues follow up on the goals and action areas of the Government’s broadband strategy

The Swedish NRA issued a follow up Report on the goals and action areas of the Government’s broadband strategy from 2009 (see press release).

EETT consults on OTE's provision of the VPU product

The Greek NRA launched its consultation as regards the provision of the incumbent's Virtual Partial Unbundling product (see press release and document, in greek).

EETT consults on old markets 3 and 5 draft market analysis

The Greek NRA launched its consultation concerning its draft market analysis of the market of fixed publicly available local and/or national telephone services prodided to residential and non-residential customers (see press release and document, in greek).

Maltese NRA consults on review of must-carry obligations

"On the 2nd of December, 2011, the MCA issued guidelines on how it would determine must-carry obligations.  On the basis of those guidelines, in February 2012 the MCA designated Melita Cable as having must-carry obligations on both its cable analogue and digital platforms.
The existing MCA determination with respect to must-carry was carried out on the premise that the number of General Interest (GI) channels was established at six.  The addition of a seventh channel towards the end of 2012 represents a significant development in the market and therefore the MCA sees the need to review its guidelines in light of the possible impact that such a development may have.
Meanwhile, another significant development has been taking place in the Cable TV retail market, having to do with the ongoing migration of analogue cable TV subscribers to other platforms, mainly to Digital Cable TV.  This migration gathered momentum throughout 2012, with the result that the number of analogue cable subscribers has now dwindled somewhat.
As a result of these developments, the MCA is consulting publicly again, in order to review the current must-carry obligations and propose changes where necessary.
Interested parties are invited to submit their feedback on this consultation by no later than 24th May 2013." (see the full press release and document).

Court issues 2012 Annual Report

The CJEU has made public its 2012 Annual Report.

Commission's Art. 7 Comments to the Austrian NRA on the latter's draft fixed call origination market analysis

The European Commission made the following comments, in its decision addressed  to TKK on the latter's draft fixed call origination market analysis:

"Change of pricing methodology and resulting significant increase of wholesale call origination rates
The Commission notes that TKK intends to change its wholesale price setting methodology for call origination services, which will in consequence significantly increase the call origination charges. TKK motivates its proposal with changed competition conditions at the retail level (strong pressure from mobile operators) and its intention to incentivize competitors to migrate towards future-proof technology based on VoB. 
The Commission considers that the competitive pressure from neighbouring mobile markets might not be sufficient to justify the change of price setting methodology and such significant increase of wholesale call origination charges. To the contrary, the competitive pressure from mobile markets would suggest that A1 TA could decrease its retail tariffs, and consequently the wholesale charges to avoid a margin squeeze. 
Furthermore, the Commission notes TKK's intention to ensure the relative attractiveness of wholesale offers based VoB. While indeed such offers could positively impact the development of competition not only on the retail calls market(s) but also on the retail access market(s), the Commission considers that in the short to medium term such offers may not be considered substitutes of wholesale call origination services in the specific Austrian context. The Commission notes that despite the existence of regulated wholesale VoB offers on the Austrian market for a significant period of time, there has been virtually no take up of the wholesale services, and only few retail customers are provided with services based on VoB. The Commission points out that the reason for the low take up of VoB offers may not be the relative attractiveness of the CS/CPS model, but possible deficiencies (concerning both pricing and technical issues) of the wholesale VoB offer.
In that regard the Commission asks TKK to analyse further, prior to adopting its final measure, the ability of VoB services to substitute wholesale call origination over the relevant timeframe of the review. Should TKK come to the conclusion that the proposed increase of the wholesale call origination tariffs will most likely strengthen the ability of A1 TA to exclude CS/CPS competitors, without bringing about the expected migration towards VoB, the Commission requests TKK to reconsider in its final measure the need to modify the price setting methodology.
In any event, TKK should closely monitor the market and ensure that there is sufficient margin between the increased wholesale charges and prevailing retail tariffs."

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."

Commission's staff working document “Report on the implementation of the e-commerce action plan” has been released

"The Commission published a report on progress made in the implementation of the e-commerce action plan" (see related page).

Art. 29 WP issues Opinion on DPIA Template for smart grid and smart metering systems

The Art. 29 Working Party issued its opinion "on the Data Protection Impact Assessment Template for Smart Grid and Smart Metering Systems (‘DPIA Template’) prepared by Expert Group 2 of the Commission’s Smart Grid Task Force" (see the press release).

Art. 29 WP adopts explanatory document on procesor binding corporate rules

"The European data protection authorities, assembled in the Article 29 Working Party (WP29), adopted an explanatory document on Processor BCR in order to further explain the principles and elements to be found in Processor BCR set out in the Working Document 02/2012 (WP195) adopted on 6 June 2012" (see the press release and Document).

Commission's Cloud Expert Group releases study in future cloud computing

The Commission's Cloud Expert Group released its research in the future cloud computing.

AG delivers Opinion in UPC Nederland case

AG Pedro Cruz Villalón, delivered his Opinion (in french and greek), in case C-518/11, according to which he proposes that UPC's activities in the cable sector, to the extent that conveyance of signal is involved, do fall into the scope of the Electronic Communications Regulatory Framework. The AG, is of the opinion also, that the Gemeente Hilversum (the local municipality that sold its cable infrastrucure to UPC, incorporating in the sale contact a price control term) even if it qualified, according to the Framework's Direcitve criteria, for an NRA, the procedure that the said Directive prescribes for imposing a price control remedy was not followed. Thus, the price control conctractual term breaches the Regulatory Framework. The AG then continues to state that even though he views a priori that the price control contractual term does not qualify for a measure pursuing a general interest objective under Art. 1 para 3 of the Framework Direcive, which provides for deviation from the Framework, he proposes that the Court should refer the case to the National Court to examine whether the said contractual term qualifies for a measure pursuing a general interest objective or if Art. 106(2) TFEU may be applied.