ECTA agrees with BEREC warning against premature de-regulation of fixed voice markets
Brussels, 13 June 2014: BEREC, the Body of European Regulators, has on Monday published its Opinion on the review of the European Commission’s Recommendation on Relevant Markets, stating inter alia that it is premature to remove the fixed voice markets from the list of regulated telecommunications markets.
The European Commission is reviewing the Recommendation which identifies those markets which have characteristics that justify regulation in order to ensure competition. While the European Commission is keen on having fixed voice markets de-regulated, BEREC considers that those markets should stay on the list, given that the competitive conditions in a significant number of Member States justify the continuation of regulation. BEREC also addresses other issues in its Opinion and asks the European Commission, in particular, for guidance on how to tackle joint dominance and oligopolistic market structures.
ECTA very much welcomes BEREC’s conclusion that it is premature to de-regulate fixed voice markets, with substantial evidence having been provided in this regard. Indeed, Regulators’ decisions clearly show that these markets are not competitive and must be regulated. In ECTA’s view, BEREC could have been more forceful when advocating their retention on the list of markets, yet the key point is BEREC considering that the fixed voice markets must stay on the list, a conclusion with which ECTA could not agree more.
ECTA is disappointed that a key issue – maintaining the physical nature of the unbundling market - has not been addressed. In fact, physical access is key to ensure that alternative operators can effectively compete and innovate at the retail level, by building pioneering and affordable offers, which end users can benefit from. The over-emphasis on geographic segmentation of the broadband markets should have also been tackled and a bolder position on the need to segment the market designed to serve business customers would have also been desirable.
Tom Ruhan, Chairman of ECTA said "It is reassuring that the National Regulators, who are the key players in the regulatory process, see the removal of the fixed voice markets from the list of regulated markets as clearly premature. These markets are regulated in nearly all EU Member States, with a very limited number of Regulators1 having decided that regulation is not warranted on account of specific national circumstances. The European Commission is putting the cart before the horse and I am glad that BEREC is not playing along. Yet a bolder position could have been expected. It is a pity that BEREC did not take a more pro-competitive stance and has not tackled other issues of great importance such as the need to ring-fence physical access and prevent undue over-emphasis on geographic segmentation.”
Erszébet Fitori, Director of ECTA said "Premature de-regulation represents a step back in the liberalisation process. Regulation is there to ensure that those markets which are structurally uncompetitive receive the right push towards competition. Forcing the removal of regulation prematurely will drive competitors out of the market, raise prices for users, stifle innovation and take away hard won benefits from European consumers.”
The European Commission must now take the BEREC Opinion into account and modify the drafts accordingly. This gives the European Commission the right opportunity not only to put the fixed voice markets back on the list, but also to tackle those issues which still need improvement, such as ensuring that the physical nature of the unbundling market is maintained, removing the undue over-emphasis on geographic segmentation and segmenting the market designed to serve business customers.
1Out of 28 National Regulators, only three have de-regulated the retail access fixed telephony market (the Finnish, the Dutch and the Romanian Regulators, with the German Regulator having de-regulated a specific high-end segment of the market). Out of 28 National Regulators, only three have de-regulated the wholesale fixed call origination market (the Estonian, the Finnish and the Romanian Regulators).
The Recommendation on Relevant Markets, which the European Commission is currently reviewing, identifies those markets which have characteristics that justify regulation in order to ensure competition. National Regulators must analyse and regulate the markets whenever they identify operators with significant market power. The removal of markets from the list means sending National Regulators a very important de-regulatory signal.
The review process involves the consultation of BEREC and thus allows National Regulators, who are the closest to the regulated markets, to advise on which markets should continue being regulated.
ECTA (the European Competitive Telecommunications Association - www.ectaportal.com) is the pan-European pro-competitive trade association that represents more than 100 of the leading challenger telecoms operators across Europe. For over a decade, ECTA has been supporting the regulatory and commercial interests of telecoms operators, ISPs & equipment manufacturers in pursuit of a fair regulatory environment that allows all electronic communications providers to compete on level terms. Our members have been the leading innovators in Internet services, broadband, business communications, entertainment and mobile.
Contact: Inês Nolasco, Senior Regulatory Affairs Manager
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