The European Commission's eCommunications Consultation Task Force (eCCTF) has today published a letter (dated 20 Aug 2004) relating to a notification made by the Swedish regulatory authority PTS in the context of Market 12: "wholesale broadband access".
The eCCTF letter focuses on the treatment of CATV networks, in relation with their ability to provide an equivalent to bitstream access on the PSTN, and hence their inclusion - or not - in the relevant product market.
The European Commission is essentially confirming the position taken by the Explanatory Memorandum associated with the Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation.
We reproduce the key part of the eCCTF letter in full below.[...] The Commission has examined the notification and the additional information provided by PTS and has the following comment.
Cable-TV networks as alternative infrastructure for the provision of wholesale bitstream access: First, the Commission would like to reiterate the definition of wholesale broadband access in the Annex to the Recommendation on relevant markets, which covers PSTN-based bitstream access as well as “wholesale access provided over other infrastructures, if and when they offer facilities equivalent to bit-stream access.”
In its notification, PTS concludes that the market for wholesale broadband access includes cable-TV networks when bitstream connections are provided over these networks. The Commission considers that PTS’s approach to market definition is consistent with the Commission's Recommendation on relevant markets and notes that no bitstream connections are currently provided over cable-TV networks in Sweden. Consequently, the Commission invites PTS to make it clear in its final decision that cable-TV networks are excluded from the relevant product market.
As far as potential competition is concerned, the Commission notes that PTS identifies several impediments to entry into the relevant market. Therefore, PTS is invited to consider concluding in its final decision that it is unlikely for cable-TV operators to enter the market for wholesale bitstream access in the near future. On the basis of this, potential competition from cable-TV operators could only constrain to a very limited extent, if at all, the market behaviour of the current providers of wholesale bitstream access. [...]
T-REGS Note: The European Regulators Group (ERG) announced in June 2004 that it intends to expand its ERG Common Position on bitstream access with a new section on wholesale broadband access to CATV networks, and that a public consultation would be held on this topic.