The European Commission's Electronic Communications Consultation Task Force (eCCTF) has published a letter (dated 3 Sep 2004) addressed to the Portuguese regulatory authority ANACOM, relating to ANACOM's notifications concerning regulatory remedies on retail markets for fixed telephony (Markets 1 through 6, plus an extra market for calls to non-geographic numbers), and concerning regulatory remedies for the wholesale markets for fixed call origination and fixed call termination (Markets 8 and 9).
As regards the proposed obligation, to be imposed on the fixed incumbent operator Portugal Telecom (PT), to provide Wholesale Line Rental, the eCCTF is very explicitly supportive, by making the following statement:
"[...] Wholesale line rental (WLR): ANACOM considers that WLR allows PT’s competitors to bundle their products and services in the retail markets as they deem most efficient, thus complementing carrier pre-selection and indirect access in the calls markets. In general, the Commission considers that WLR can be an appropriate remedy to address the lack of competition in the relevant retail markets. In any event, the need for market entrants to rely on inputs such as WLR should decrease, over time, as they increase investment in their network infrastructure. [...]"
As regards two other key aspects, the eCCTF is distinctly more subtle: it mentions the ANACOM proposals in its letter, but does not comment on them, i.e. it offers a tacit approval, but shows to the informed reader that it has considered the matters at stake.
The two aspects are the following:
a) ANACOM proposed to impose 'retention capping' of the retail tariffs of Portugal Telecom, for fixed-to-mobile calls (both for residential and for non-residential end-users) notwithstanding the measures on wholesale mobile call termination. The eCCTF mentions it, but makes no comment.
b) ANACOM proposed a system of "delayed reciprocity" for the wholesale call termination charges of fixed alternative operators, capped at 20% (i.e. the fixed alternative operators will be subject to an obligation to apply 'fair and reasonable wholesale charges for call termination' but this is interpreted as meaning that they will be allowed to apply call termination charges that are, as a maximum, 20% higher than the cost-oriented call termination charges of the fixed incumbent operator Portugal Telecom). The eCCTF mentions it, but makes no comment.
T-REGS Note: Such tacit approval can be explained, at least in part, by the fact that the European Commission does not have a veto power over the selection of regulatory remedies, although the eCCTF does have the ability (according to article 7(3) of the Framework Directive 2002/21/EC) to make comments on notifications made by national regulatory authorities.
For a further discussion of the implications of this eCCTF letter, which is particularly precedent-setting, and regulatory developments in Portugal, please contact Yves Blondeel.