The European Commission's eCommunications Consultation Task Force (eCCTF) has published four letters (all dated 9 June 2004) relating to notifications made by the Swedish regulatory authority Post&Telestyrelsen (PTS). The 4 letters cover 5 markets, because fixed call origination and transit on the fixed public telephone network are covered by a combined market review.
All four letters essentially confirm the conclusions that were reached by PTS.
Particularly noteworthy is the fact that the eCCTF has validated PTS' decision to declare 22 fixed network operators as having Significant Market Power (SMP) for Market 9: "call termination on individual public telephone networks provided at a fixed location", with substantial, but asymmetric, obligations, which differ for 3 categories of fixed network operators.
Category 1: 19 smaller fixed new entrant operators are subject to the following obligations:
- meet reasonable requests for access and interconnection
- meet reasonable requests for a direct billing agreement
- reasonable and fair interconnection charges
- non-discrimination in interconnection conditions
- submit separated accounts to PTS, if PTS so requests
- compile and publish information necessary to enable the conclusion of interconnection and direct billing agreements
Category 2: Tele2 Sverige and Telenor (major new entrant operators), are subject to the above obligations, plus a specific obligation to meet reasonable requests for direct interconnection, and a qualified obligation of accounting separation/reporting (obligation to file accounts with the PTS annually, if PTS so requests).
Category 3: TeliaSonera Sverige (the fixed incumbent operator), is subject to the most far-reaching set of obligations, including what is indicated above for categories 1 and 2, and amounting essentially to the "full menu" of obligations provided for in the Access and Interconnection Directive 2002/19/EC, i.e. including cost-orientation of its interconnection charges, the obligation to publish a reference offer for access and interconnection, and a special obligation to meet reasonable requests for network capacity (this last obligation results also from the SMP finding on the call origination and transit markets).
The eCCTF letter SG-Greffe (2004) D/202305 approves the 3-tier structure, which implies that only TeliaSonera Sverige will be subject to detailed cost-accounting/cost-orientation requirements (LRIC cost model) but makes the following key comment relating to the behaviour of other operators with regard to call termination on fixed networks:
"Asymmetrical application of remedies: The Commission reiterates that obligations imposed under the Access Directive should be based on the nature of the problem identified, proportionate and justified. The Commission invites PTS to monitor closely the development of the cost structures of the operators on which the obligation to charge ‘fair and reasonable prices’ is imposed and to assess whether its current assumptions on ‘fair and reasonable prices’ will remain relevant over the period of the market review."
The European Commission makes exactly the same comment in the eCCTF letter SG-Greffe (2004) D/202306 relating to Market 16: "voice call termination on individual mobile networks" where the Swedish PTS has put forward particular approaches applicable to Hutchinson 3G (Hi3G), the new entrant UMTS operator, and to Djuice, an MVNO (owned by Telenor) making use of Tele2's network.
The eCCTF summarises the PTS proposals relating to mobile call termination for these two operators as follows:
"Hi3G/3 shall however, over the period of 4 years, gradually implement prices in accordance with the LRIC model so that in July 2007 the termination price that will be considered ‘fair and reasonable’ would be at the level of those operators on which cost-orientation based on the LRIC model is imposed. PTS states that a decision on price adjustment can be reviewed in the context of the next market review. Djuice’s prices shall not be based on the LRIC model but must be “fair and reasonable”, which PTS interprets as meaning a price which should in general be around the level of the cost-oriented price calculated on the basis of a LRIC model."
The eCCTF letters on Market 7 (SG-Greffe (2004) D/202308 - the retail market of the minimum set of leased lines) and Markets 8 and 10 (SG-Greffe (2004) D/202307 - fixed call origination and fixed transit) contain no comments of substance on the PTS proposals, and simply validate the PTS' conclusions.
For a discussion of recent and forthcoming regulatory developments in Sweden, please contact Yves Blondeel.