Digital Agenda: Commission calls on Polish telecom regulator to base deregulation proposal on an up-to-date market assessment

Brussels,  8-2-2013 — /europawire.eu/ — The European Commission has asked the Polish telecoms regulator (UKE) to withdraw its proposal to deregulate conditions under which other operators can access Polish telecom company Telekomunikacja Polska’s (TP) broadband network in 11 communes of Poland. In the Commission’s view, fully supported by the body of European Telecoms Regulators (BEREC), UKE’s decision could have a negative effect on competition in Poland, and thus limit the offers available to consumers and businesses. This is the second time within the last six months that the Commission requests UKE to withdraw a proposal for regulation in this market (see IP/12/914 for details of a separate case).

European Commission Vice President Neelie Kroes said: “Regulation can and should be withdrawn as soon as there is sound evidence that competition alone will deliver the most for consumers in terms of quality, choice and prices. However I cannot accept a proposal for deregulation which is based on outdated and unreliable data, contradicted by UKE’s own more recent market assessment. I also regret that UKE does not take account of clear Commission guidelines, issued to help UKE properly regulate this important market.

UKE’s proposal was based on an out-dated market assessment from March 2011, which also contradicts UKE’s own March 2012 market analysis in which the regulator concluded that no single area of Poland was competitive enough to propose complete deregulation.

During the two month in-depth investigation, UKE has failed to provide additional evidence to allow the Commission to withdraw its serious doubts(see IP/12/1351). BEREC has also fully supported the Commission’s decision and recommended UKE withdraw its measure. As a result of today’s Commission action, UKE cannot adopt its decision to deregulate wholesale broadband access in certain communes.

Background

Wholesale broadband access, which allows alternative operators to use part of a dominant company’s network to provide retail services has recently been subject to frequent regulatory activity by UKE. In 2011, UKE adopted a decision which obliged TP to give alternative operators access to its networks in all of Poland, with the exception of 11 geographical areas which UKE considered competitive and did not analyse. In March 2011 the Commission urged UKE to assess these remaining areas and to prove whether such areas should indeed be treated differently. In March 2012, UKE announced that there was not enough competition throughout the entire territory of Poland and that therefore TP should be regulated on the wholesale broadband market. It proposed to impose lighter remedies on TP in four communes (of which only two belong to the competitive areas in the current notification).

At the end of August 2012 the Commission, agreed with UKE’s findings that wholesale broadband services should be regulated in the entire territory of Poland, but nonetheless issued a recommendation in the form of concrete guidelines on conditions to lift price regulation, and to ensure, at the same time strict non-discrimination of alternative operators. UKE, instead of amending its proposed decision in line with this recommendation, notified its draft decision concerning the 11 potentially competitive geographical areas which were excluded from the scope of the market in UKE’s 2011 market review. UKE has not explained why it departs from its conclusions reached in March 2012. Beside the concerns as to the use of outdated and contradictory market data, the Commission also considers that UKE has not demonstrated that 11 communes constitute a separate regional market, nor that there is in fact effective competition on the market for wholesale broadband access in those communes.

EU telecoms rules require Member States to promote competition and the interests of consumers in the EU, as well as the development of the Single Market. Article 7 of the Telecoms Framework Directive requires national telecoms regulators to notify the Commission, the Body of European Regulators for Electronic Communications (BEREC) and telecoms regulators in other EU countries, of the measures they plan to introduce to solve market problems. The EU telecoms rules enable the Commission to adopt further harmonisation measures in the form of recommendations or (binding) decisions if divergences in the regulatory approaches of national regulators, including remedies, persist across the EU in the longer term.

In July 2012 (SPEECH/12/552), Neelie Kroes outlined elements of a forthcoming package which will provide durable guidance for broadband access regulation until 2020. The Commission is currently awaiting BEREC’s opinion on the draft Recommendation which addresses issues including non-discrimination remedies, network access pricing and the conditions for pricing flexibility for “next generation” wholesale access products and which is planned for adoption before this summer.

Useful Links

The Commission’s letter sent to the Polish regulator UKE will be published at:

https://circabc.europa.eu/w/browse/0fc4cbf9-3412-45fe-84bb-e6d7ba2f010e

Digital Agenda website

Neelie Kroes’ website

Follow Neelie Kroes on Twitter