The European Commission's eCommunications Consultation Task Force (eCCTF) has published a number of new letters. Two of these are particularly precedent-setting, as they represent the first instances of the European Commission withdrawing 'serious doubts', i.e. the PHASE II Investigations were not followed by vetos.
The withdrawals follow intense discussions, and to some extent even negotiations (see a previous T-REGS news item). They concern:
Netherlands: Definition of a separate retail market (informally named 'Market 19') for the distribution of free-to-air radio and television programmes via cable-tv networks.
Germany: Wholesale broadband access, and specifically the re-introduction of VDSL in the market definition, "unless it proves not be be a substitute for the existing types of accesses".
T-REGS notes: The Dutch case was already discussed in a previous T-REGS news item, but one extract from the eCCTF letter on cable-tv is copied below, as it may well also be of relevance to the German case.
OPTA has drawn attention to a series of obstacles to switching. Concerning IPTV, these relate to the projected coverage (60% of the households within two years), equipment-related costs (incompatibility of the existing ADSL-modems with the KPN ADSL 2+ network, loss of analogue TV for the second and/or third TV set) and difficulties in delivering HDTV over ADSL. Regarding this last point, the Commission understands that difficulties in delivering HDTV over ADSL may exist to some extent but also that HDTV cannot be regarded as an excluded option for IPTV. It seems that the difficulties have been overcome elsewhere and that there are companies offering HDTV over ADSL.
As regards Germany, the Commission withdrew its 'serious doubts' following a re-notification of market 12 by the German regulatory authority BNetzA.
Key extracts from the eCCTF letter on Wholesale Broadband Access in Germany are as follows:
The Commission has examined the amended notification provided by BNetzA and no longer has serious doubts concerning the notified draft measures in their modified form. This conclusion is based on the inclusion of all xDSL bitstream products in the scope of the relevant markets (independent of the infrastructure or technology that the products are delivered over). Without prejudice to the development of any future services, the Commission notes that access to VDSL connections is now included in the wholesale bitstream access markets in Germany, as the current retail broadband services can be provided over either VDSL-based or existing wholesale products. It is of course appropriate for BNetzA to keep under review the extent to which different wholesale services remain substitutable in the light of the emergence of new retail services. This may lead BNetzA to consider a redefinition of market boundaries in due course.
In this context, the Commission has the following comments:
III.1 The future treatment of VDSL connections in the context of emerging new retail services; the need to base any prior exclusion of products from the wholesale broadband access markets on a proper substitutability test.
The Commission notes that the emergence of new retail services may give rise to the emergence of a new derived wholesale market to the extent that such new retail services cannot be provided over the existing wholesale products. The new retail services may in such a case generate a wholesale demand for broadband access services with different characteristics from the currently existing wholesale broadband access services. Such new wholesale products should not be subjected to inappropriate obligations. When examining differences between retail services, BNetzA should therefore examine in particular to what extent they necessarily require different wholesale inputs, before excluding the derived wholesale inputs from the wholesale bitstream access markets. In this context, the Commission invites BNetzA to examine to what extent the mere bundling of distinct retail products would in itself give rise to the existence of a new retail product belonging to a separate retail market. A mere upgrade of an existing service is not considered in itself to constitute a new market. The lack of substitutability of a product has to be established from both demand- and supply-side perspectives before it can be excluded from the markets in question.
III.2. Imposition of remedies.
Given that wholesale bitstream access is not yet available in Germany, given that there has hardly been competition between broadband infrastructures, given that there have been a number of competition problems in the German broadband markets and that the level of competition in and the penetration of the German broadband markets are still relatively low, the Commission invites BNetzA to impose appropriate remedies in the notified markets without delay and to notify them to the Commission under Article 7(3) of the Framework Directive. In this context the Commission considers that BNetzA should ensure that no form of wholesale broadband access is negatively affected by DT´s roll out of VDSL/fibre infrastructure.
For a discussion of the implications, especially of the precedent-setting letters on The Netherlands and Germany, please contact Yves Blondeel.