Update 20 Jan 2012: Today, the European Commission, BEREC and the Polish regulatory authority UKE issued a Common Statement, in which they indicate that, in a tripartite meeting, they 'successfully defined together the most efficient regulatory approach'.  

The Parties agreed that UKE:

• Withdraws those draft decisions which were notified in October/November 2011;
• Will notify by mid-2012 new draft SMP (significant market power) decisions for mobile operators in the voice call termination market, defining symmetric MTRs (mobile termination rates) based on the bottom-up LRIC model.

The full text of the Common Statement is available by clicking here.

Update 13 Jan 2012: On 12 and 13 Jan 2012, the Polish regulatory authority UKE formally notified the European Commission of its withdrawal of notifications PL/2011/1255-1258 (wholesale mobile call termination on the individual networks of PTC, P4, Polkomtel and PTK) as well as the withdrawal of notifications PL/2011/1260 and PL/2011/1273 concerning UKE dispute settlement decisions regarding interconnection involving AERO2.  

This is not unexpected given the previous developments which were described in the original T-REGS news item, and in the updates to it. It is in accordance with one of the options of the Article 7/7a procedure (diagram linked below). 

Update 20 Dec 2011: Today, the European Commission formally communicated on a third Second Phase case relating to Polish MTRs, even though the initiation of the proceedings concerned is more than a month old. Case PL/2011/1273 concerns a UKE dispute resolution between TP SA, the incumbent fixed telecommunications operator in Poland, and AERO2, a late entrant mobile operator, relating to AERO2's MTRs. The deadline for filing observations in this case is 13 January 2012.

In other news, BEREC yesterday (19 Dec 2011) published the full detail of its Opinions on the two earlier Polish MTR cases. The BEREC Opinions on those two cases are available by clicking here and here (links may not be persistent - please contact T-REGS for a copy if needed). Update 18 Jan 2012: BEREC has now also published its Opinion on the third case.

Today, for the first time since the publication (18 Dec 2009) and entry into force (25 May 2011) of EC Directive 2009/140/EC which amended the Framework Directive 2002/21/EC, the European Commission published a letter (addressed to the Polish national regulatory authority UKE), in which the European Commission exercised its new powers over regulatory remedies (regulatory remedies are the regulatory obligations which can be imposed on providers of electronic communications services that have been found to hold Significant Market Power on defined relevant markets).

The letter constitutes a notification in application of Article 7a(1) of the revised Framework Directive, triggering the new process in which the European Commission notifies a national regulatory authority and BEREC of its reasons for considering that a draft measure would create a barrier to the single market or that it has serious doubts as to the compatibility of the draft measure with Community law.

The case at hand, which triggered the European Commission's first action in application of its new powers, is the notification by the Polish UKE concerning wholesale mobile call termination (Market 7 listed in the EC Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation).

The European Commission's letter (7 pages in length - in principle accessible by clicking here - link likely to be non-persistent and the circabc site has been unreliable - please contact us in case it is inaccessible) briefly describes the Polish UKE's draft measures, and essentially criticises what the European Commission considers to be their non-binding character. The European Commission states that the measures proposed by the Polish UKE may create barriers to the single market and that it has serious doubts as to the compatibility of these draft measures with EU law and in particular with the requirements referred to in Articles 16(4) and 16(6) in conjunction with Article 6 and 7 of the Framework Directive, Article 8(5)(a) of the Framework Directive, and Article 4 of the Framework Directive.

In application of Art 7a of the revised Framework Directive, the Polish NRA is prohibited from adopting its proposed measures for 3 months, BEREC is tasked (within 6 weeks) to issue an opinion on the European Commission's notification, indicating whether it considers that the draft measure should be amended or withdrawn and, where appropriate, provide specific proposals to that end. More generally, Article 7a of the revised Framework Directive instructs the European Commission, BEREC and the national regulatory authority concerned (in this case UKE) to co-operate closely to identify the most appropriate and effective measure in the light of the objectives laid down in Article 8 of the Framework Directive, whilst taking due account of the views of market participants and the need to ensure the development of consistent regulatory practice.

Tomorrow, the European Commission will issue a formal invitation to interested parties to file their observations, within 10 working days from 9 November 2011. Update: the deadline for filing observations is 23 Nov 2011.

The procedural steps highlighted above, as well as potential future procedural steps in case co-operation between the institutions does not yield agreement within the 3-month period, are described in a diagram, usefully provided by the European Commission, which can be accessed by clicking here (second diagram in annex of the press release).

For a discussion of the substance of the Polish Market 7 case, or for a discussion of the new Article 7a procedure launched for the first time, please contact This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

Update 25 November 2011: On 24 Nov 2011, the European Commission sent 'reasoned opinions' to 16 out of the 27 EU Member States, indicating failure of these Member States to fully bring into effect the provisions of Directives 2009/136/EC and 2009/140/EC.

A 'reasoned opinion' is a second important step (following a 'letter of formal notice') in (potential) escalation towards legal action to be initiated by the European Commission against the Member States in front of the European Court of Justice.

The Member States affected by the 'reasoned opinions' are: Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, France, Germany, Greece, Hungary, Italy, The Netherlands, Poland, Portugal, Romania, Slovenia and Spain.

The European Commission's press release announcing the 'reasoned opinions' is accessible via http://tre.gs/w.

It will be seen that the list of 16 allegedly infringing Member States is long, and perhaps longer than would be suggested by the tracker provided by T-REGS in the repeated updates of this news item. This is explained by the fact that the European Commission checks whether every single provision of the directives has been correctly brought into effect by the Member States (which certainly will be a matter of contention in several cases), whereas we have focused on flagging developments as and when Member States took material actions to transpose the core of the 2009 Telecoms Package. Also, we have focused on the telecom-specific aspects, not on e-Privacy, which is also affected by the 2009 Telecoms Package. 

The European Commission's press release also indicates that it has concluded to its satisfaction that Latvia, Lithuania, Luxembourg, and the Slovak Republic have notified full implementation.

Please also refer to the update of this news item dated 19 July 2011, in which we reported that the European Commission had sent 'letters of formal notice' to 20 out of the 27 EU Member States.

Update 28 October 2011: The German Bundestag has voted the transposition measures on 27 October 2011 (Gesetzentwurf der Bundesregierung zur Änderung telekommunikationsrechtlicher Regelungen), including the modifications adopted by the parliamentary commission. The full text as voted (right column shows the additions/deletions made by the parliamentary commission to the government's bill shown in the left column) is available at http://tre.gs/delaw1. The amended text has not yet been published in the Bundesanzeiger. We will amend this entry once the legislation is published and brought into effect.

Updates 21 October 2011 and 21 November 2011: The Austrian Parliament has voted the transposition measures on 19 October 2011 (amendment of Telecommunications Act 2003, KommAustria Act and Consumer Protection bodies Co-operation Act), and the Acts have published on 21 Nov 2011. The full text as voted is available at http://tre.gs/at1 and a consolidated text is available at: http://www.rtr.at/de/tk/TKG2003

Update 14 September 2011: Portugal has published transposition measures in the Diário da República of 13 September 2011, coming into effect on 14 September 2011. The full text is available at http://tre.gs/pt1

Update 26 August 2011: France published and brought transposition measures into effect as of 26 August 2011. The full text of the 'Ordonnance' is available on Légifrance.

Update 19 July 2011: The European Commission today sent 'letters of formal notice' to 20 out of 27 EU Member States, putting them on notice for failing to transpose Directives 2009/136/EC and 2009/140/EC into national implementation measures (legislation, regulations and/or administrative provisions). This represents the first stage of infringement proceedings. The Member States have two months to respond. According to the European Commission's press release issued today, only Denmark, Estonia, Finland, Ireland, Malta, Sweden and the UK have notified the Commission that they have implemented the Directives in full, whilst 'a majority of them have informed the Commission of some implementation measures'.

Update 19 July 2011: Malta has now also published and brought transposition measures into effect as of 12 July 2011:

http://goo.gl/z421h (core Act; other text e.g. on numbering publised separately on 12 July 2011, and data protection etc. on 24 June 2011 and 14 June 2011)

http://goo.gl/X8pDC

Update 1 July 2011: Sweden has now also published and brought transposition measures into effect as of 1 July 2011:

http://www.riksdagen.se/webbnav/index.aspx?nid=3911&bet=2003:389

http://www.likumi.lv/doc.php?id=231232

Finland had in fact adoped measures which came into effect on 25 May 2011 - this has been corrected in the list below.

Today, 25 May 2011, is the deadline for EU Member States to publish the national law, regulations and/or administrative provisions they have adopted on the basis of the provisions of the Citizens' Rights Directive (2009/136/EC) and the Better Regulation Directive (Directive 2009/140/EC).

These 2009 directives amend five existing EU Directives which constitute the core of the EU regulatory framework for electronic communications (Framework Directive 2002/21/EC), Access Directive, (2002/19/EC), Authorisation Directive (2002/20/EC), Universal Service Directive (2002/22/EC) and the e-Privacy Directive (2002/58/EC). The consolidated text of the 2002 directives, as amended by the 2009 directives, can be downloaded by clicking here.

T-REGS has conducted an informal check on whether the individual EU Member States have published measures (national legislation, regulations and/or administrative provisions) to meet the deadline set by the 2009 directives. This check may be incomplete; we will be happy to correct the list provided below if new information reaches us.

The test used for this check is the effective publication of measures the stated aim of which is to transpose the 2009 directives, i.e. the list provided below does not include advanced parliamentary proceedings (e.g. legislation was voted in the Swedish Riskdag on 18 May 2011 but has not yet been published), partial parliamentary proceedings (e.g. legislation was voted in the French Assemblée Nationale and Senate and published on 22 March 2011 empowering the Government to transpose by means of an 'Ordonnance', which itself has not yet been published), and other advanced processes (which are ongoing in many Member States). The list provided below also does not express any view on the completeness or correctness of the transposition measures.

Austria: NO
Belgium: NO
Bulgaria: NO
Cyprus: NO
Czech Republic: NO
Denmark: YES
https://www.retsinformation.dk/Forms/R0710.aspx?id=136073
Estonia: YES
https://www.riigiteataja.ee/akt/123032011010?leiaKehtiv
Finland: YES
http://goo.gl/9PluE
France: NO
Germany: NO
Greece: NO
Hungary: NO
Ireland: NO
Italy: NO
Latvia: NO
Lithuania: NO
Luxembourg: YES
http://www.legilux.public.lu/leg/a/archives/2011/0043/index.html
Malta: NO
Netherlands: NO
Poland: NO
Portugal: NO
Romania: NO
Slovak Republic: NO
Slovenia: NO
Spain: YES
http://www.mityc.es/telecomunicaciones/es-ES/Legislacion/LegilacionMaterias/basica/2011/RD726_2011.pdf
Sweden: NO - text voted in parliament on 18 May 2011 - http://www.riksdagen.se/Webbnav/index.aspx?nid=3120&doktyp=betankande&bet=2010/11:TU20
UK: YES
http://www.legislation.gov.uk/uksi/2011/1210/introduction/made
http://stakeholders.ofcom.org.uk/binaries/consultations/gc-usc/statement/Statement.pdf  

For a discussion of this T-REGS news item, please feel free to contact This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .  

Update 18 July 2011: The  Belgian regulatory authorities have today published their cable access/resale decisions. The decisions are formally dated 1 July 2011 and will become effective on 1 August 2011. The core remedies listed in the EC notification are maintained, i.e. (i) analogue cable TV resale, of which Belgacom can also be a beneficiary; (ii) cable digital TV platform access, from which Belgacom is excluded as a beneficiary; and (iii) cable broadband Internet resale, from which Belgacom is excluded as a beneficiary. An English language press release is now available from the BIPT.

The BIPT decision (for Brussels Capital Region) can be accessed here.

The VRM decision (for Flemish Community) can be accessed here.

The CSA decision (for French Community) can be accessed here.

The Medienrat decision (for Germanophone Community) can be accessed here. 

Update 23 June 2011: The European Commission has today published the full text of its extensive comments letter on the Belgian regulatory authorities' notification. Whilst the European Commission is not proceeding to a second phase investigation on the market definition or on the SMP assessment, its comments include several invitations to the Belgian authorities to substantiate or better substantiate key aspects of the draft decision. The European Commission also calls into question whether it is opportune for Belgacom to be a potential beneficiary of the analogue cable-tv resale obligation, given Belgacom's presence with an IPTV offer in the geographic footprint of the cable companies. 

Update 29 March 2011: The Belgian regulatory authorities have published responses provided by interested parties, or a summary of responses received. These can be accessed directly by clicking on the hyperlinks included hereafter. The BIPT has published 10 non-confidential responses received (it states that it may add further responses once confidentiality issues are resolved), the VRM has published a document describing the 17 responses it received, and the CSA has published 15 responses.

The co-ordinated proposals call for these markets to be geographically defined along the coverage areas of the Cable-TV companies (which is a key structuring element of the decisions), and remedies to be imposed on ALL the Cable-TV companies, which are EACH proposed to be found holding Significant Market Power (SMP) within their respective coverage areas.

This T-REGS news item provides a walkthrough of the main points of the draft analyses, referencing the paragraph numbers used in the draft BIPT decision (we have verified that the VRM's, CSA's and Medienrat's draft decision broadly have the same substance and follow the same template, with adjustments only to reflect the specific authority in charge, and the details of the description of the market situation in the part of Belgium falling within its responsibility).

Product Market Definition

In order to arrive at their co-ordinated relevant product market definitions, the regulatory authorities examined a number of demand-side and supply-side substitution questions. The most salient of these substitution questions led to conclusions as follows:

Analogue TV and digital TV are in the same market:  The authorities found one-way substitution from analogue TV to digital TV (para 96), and highlighted other elements in favour of finding a single market for analogue and digital TV, e.g. retail prices of digital TV are aligned on analogue TV pricing (para 93), the basic groups of channels offered by the providers are very similar (para 90), etc.

Cable TV and xDSL-based IPTV are in the same market: The authorities found these to be substitutes (para 105), notably on the grounds of the similar nature of the retail offers (para 99), and similar retail prices being practiced by the cable companies (Cable TV) and by Belgacom (IPTV) for the TV offers and for the rent of decoders (para 98).

Satellite TV and DVB-T are NOT in the same market as Cable and xDSL-based IPTV: The lack of interactivity and lack of on-demand offers on satellite (para 115), the fact that French language and Dutch language must-carry channels are on different satellites (para 108), high up-front costs for end-users and local environmental restrictions on satellite dishes (para 111) and low-take-up (2.23% of all TV usage in Belgium) are invoked to find that satellite TV is not part of the relevant market. The same finding is reached for DVB-T, for which it is invoked that insufficient radio spectrum does not allow offers as diversified as on Cable-TV (para 124), and very low usage (less than 1% of all TV usage in Belgium) justify a finding of non-substitution. Mobile TV and Web-TV (over-the-top) were also considered and were also excluded.

Geographic Market Definition

The regulatory authorities put considerable effort into supporting their proposed conclusion (para 186) that the relevant geographic markets correspond to EACH Cable-TV companies' respective network footprint, which is the key structuring element of the draft market analyses. In doing so, they invoke, and cite, the European Commission's guidelines on market analysis and the assessment of significant market power under the Community regulatory framework, in particular Section 2.2.2 on geographic market definition. 

The regulatory authorities conducted chain-substitution analyses (para 158-162), the first analysis essentially revolving around whether a retail price reduction by one cable company (e.g. Telenet) by 10% would affect the pricing behaviour of another cable company (e.g. Tecteo) - (negative conclusion). A second chain-substitution analysis revolves around whether Belgacom IPTV (which has nation-wide retail pricing) affects cable company pricing - e.g. Belgacom responding to a cable company retail price reduction in one area - with nation-wide effect given Belgacom's pricing - triggering changed cable company retail pricing in another area  - (negative conclusion). In essence, the regulators indicate their belief that a cable company maintaining a higher price against a marginal loss of customers (to Belgacom IPTV) would be more profitable for the cable company than competing (against Belgacom IPTV) on price.

Other factors invoked are that the offers and prices in Brussels (which has 3 cable companies) vary considerably compared to one-another (para 168) and that A.I.E.S.H., which has not upgraded to digital TV, does not appear to experience competitive pressure to upgrade, despite the availability of Belgacom IPTV in its coverage area and despite the availability of cable digital TV offers in neighbouring areas. Added to this, the point is made that there is no demand and supply substitutability between different geographic areas (para 184).

Three-Criteria Test

Given that the retail market for the provision of analogue and digital TV signals is not contained in the European Commission's Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation, the regulatory authorities set out to prove that the Three-Criteria test is fulfilled, and conclude that it is fulfilled (para 360).

Criterion 1 (high and persistent entry barriers): is deemed to be fulfilled (para 349).

Criterion 2 (tendency to effective competition behind the entry barriers): is also deemed to be fulfilled (para 355), notably on the grounds that the cable companies control 70-80% or 80-90% of the market depending on the communes studied (T-REGS Note: this data was verified in all draft decisions).

Criterion 3 (insufficiency of competition law): is also deemed to be fulfilled (para 263, 311, 359).

Significant Market Power (SMP) Assessment

The SMP assessment in the draft decisions focuses on the high retail market share of the cable companies (70-90% as described above), and relies in addition on the other indicators of SMP provided by the EU regulatory framework, many of which are deemed to be fulfilled.

A 'principal failing of competition' (para 371) is observed, with a retail market characterised by essentially 2 players (Cable-TV and Belgacom TV), with occasional challenge by the small DSL player Billi (with 0-5% market share in Brussels and in parts of the French speaking Community). The regulators also indicate that retail prices are higher than would be expected in a competitive market (para 371) and - importantly - that Belgacom TV is not exerting price pressure on cable companies (para 317 and para 353).

Therefore, each individual cable company is found to hold SMP on the relevant market corresponding to its geographic footprint.

Proposed Regulatory Remedies

The regulators put forward 3 key regulatory obligations on the cable companies, with associated supporting elements. These are as follows:

Remedy 1: Wholesale Digital TV Platform Access: cable companies (insofar as they offer Digital TV - not the case for A.I.E.S.H.) are proposed to be required to offer "the sharing of their digital TV signals, permitting the beneficiary to itself manage the conditional access system of its customers as well as its own decoders and human-machine interfaces" (T-REGS paraphrase) - (para 388). This should enable the beneficiary to "freely define its offer of TV channels, i.e. not only to offer channels offered by the SMP operator, but also to add channels that are not offered by the SMP operator - meaning that the beneficiary brings the channels to the digital TV platform of the SMP operator" (T-REGS paraphrase) - (para 389) - subject to the beneficiary having concluded the necessary intellectual property rights agreements (para 390).

In addition, the SMP operators would be subject to internal/external non-discrimination obligations (para 427), the publication of a reference offer (para 407), and costing based on retail-minus, and an obligation not to effect a margin-squeeze (para 432).

Remedy 2: Analogue TV Resale: cable companies are proposed to be required to offer analogue TV resale, on the grounds that this is a necessary accompaniment of digital TV in the relevant markets given Belgian market dynamics where analogue and digital TV are offered in parallel by cable companies and widely used by customers (para 452). An essentiality test in this respect is put forward (para 450), and existing wholesale demand for such analogue TV resale is put forward (para 453).

Again, the SMP operators would be subject to internal/external non-discrimination obligations (para 475), the publication of a reference offer, and costing based on retail-minus (with para 482 detailing how to calculate the retail-minus).

Remedy 3: High Speed Internet Resale: cable companies are proposed to be required to offer high speed Internet resale, on the grounds that it is an essential accompaniment to the analogue/digital TV obligations, to achieve the efficiency of the TV remedies (para 510). This is substantiated on the grounds that multi-play bundles are of increasing essentiality, given increased customer take-up of bundles, the emergence of TVs combining TV content and Internet access, the bundling of TV and Internet-transmitted offers by the cable companies (including Telenet's Yelo iPhone/iPad TV streaming offer over WiFi launched last week) - (paras 490, 507-509).

Again, the SMP operators would be subject to internal/external non-discrimination obligations (para 535), the publication of a reference offer, and costing based on retail-minus (with para 541 detailing how to calculate the retail-minus).

T-REGS Note 1: Paragraphs 499 and 498 of the BIPT draft are distinctly unclear. Para 499 stipulates that high speed Internet resale is only to be made available insofar as the beneficiary is including it in a bundle itself, i.e. a bundle with at least one TV offer. No specification is made on whether this is a bundle generated by the access-taker itself or requiring the access-taker to take up both a TV access/resale offer and an Internet resale offer.  Para 498 could be interpreted as suggesting than an operator which would not strictly need resale of Internet access to enable it to compete with the cable SMP operators' retail bundle, may not be entitled to receive such Internet access resale. This is reminiscent of the Netherlands' OPTA decision on analogue Cable-TV resale, which enabled cable companies to reject resale demands from KPN (the incumbent telco) on the grounds that KPN enjoyed sufficient infrastructure (xDSL and DVB-T) to self-provide TV. This OPTA decision was subsequently annulled by the CBB (appeals court) on market definition grounds. Informal indications sought by T-REGS from the BIPT suggest that the Belgian regulatory authorities do NOT intend to restrict beneficiary status (e.g. on the part of Belgacom) of any of the obligations to be imposed on cable companies.

T-REGS Note 2: Each of the 3 remedies sections discussed above provide for a timeframe for implementation, which is (paras 407, 457, 517 of BIPT draft): 6 months from decision - requirement to provide a draft reference offer, followed by public consultation; 12 months from decision - requirement for final reference offer; 3 months after final reference offer - actual implementation. The implication of this is that the most aggressive timeframe possible would imply that the 4 Belgian regulatory authorities would finalise their decisions in mid-2011, with effective implementation of the remedies adopted by each of the 4 Belgian regulatory authorities 12+3 months later, i.e. by end-2012. In case the European Commission would raise objections on market definition, SMP assessment, and based on the implementation of the 2009 amendments to the EC directives, possibly also on the selection of remedies (Article 7/7a of the revised Framework Directive due to be transposed on 11 May 2011), this case could enter the new Art 7/7a process (see diagram in link), resulting in up to 6 months extra delay, without prejudice to possible/highly likely appeals under national Belgian law.

T-REGS Note 3: Separately, but also on 21 Dec 2010, the BIPT has issued a draft analysis of Market 4 (wholesale (physical) network access) and Market 5 (wholesale broadband access), in which it proposes to carve-out Cable-TV (cable not to be identified as a substitute on these markets) and Fibre (not available and not expected to become available within the timeframe of validity of the review). The BIPT proposes to continue existing regulation, including copper unbundling from the MDF, and enhanced regulation of VDSL2-based wholesale broadband access, including a new regulated multicast capacility to facilitate the provision of IPTV by alternative operators. The obligation on sub-loop unbundling would be phased-out, and the risk-premium on VDSL2 WBA would also be removed.

The full text of the Belgian regulatory authorities' draft decisions on proposed access to Cable TV can be accessed by clicking on the links hereafter:

VRM (Flemish Community) - affecting Telenet, Tecteo and Numericable.

CSA (Francophone Community) - affecting Tecteo, Brutele, A.I.E.S.H. and Telenet.

Medienrat (Germanophone Community) - affecting Tecteo.

BIPT (delegated responsibility for Brussels Capital Region) - affecting Butele, Numericable and Telenet. 

On 11 November 2010, the European Commission and the European Parliament held a joint Summit on 'The Open Internet and Net Neutrality in Europe'.

T-REGS participated in the sessions in both institutions, and our informal notes (24 pages) are available on simple request by contacting This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

The speech delivered by European Commission Vice-President Neelie Kroes has been made available by the European Commission, and can be accessed by clicking here.

Update 15 Dec 2010: On 14 Dec 2010, the Polish regulatory authority UKE published its final decisions on SMS regulation, applicable immediately to: Polskiej Telefonii Komórkowej Centertel sp. z o.o., Polkomtela SA, Polskiej Telefonii Cyfrowej sp. z o.o., P4 sp. z o.o. and Cyfrowego Polsatu SA. The full text of the decisions can be accessed (in Polish only) by clicking here.

Update 4 Oct 2010: The European Commission has now published its comments letter (officially dated 24 Sep 2010) on the draft measures put forward by the Polish regulatory authority UKE. The European Commission does not dispute the market definition and SMP assessment, but insists on all Polish MNOs and MVNOs being subject to the same symmetrical obligation. With regard to wholesale price control, the European Commission makes the following comment: 

"In its notified draft measure UKE proposes a price control by obliging the M(V)NOs to charge cost oriented prices. UKE does not propose to impose a price cap. Nevertheless, UKE refers to the price level of PLN 0.05 (approx. EUR 0.012), and considers that this price level would be "justified in view of the identified competition problems". According to UKE's explanations contained in the response to the request for information, it will be up to the operators to set cost oriented prices and prove the appropriate level of costs, which will be subsequently assessed by the NRA. Further, according to its preliminary calculations, UKE considers that the real cost of SMS termination is in the range of PLN 0.01, but setting the price cap at such a low level would not be appropriate, as the decrease from the current levels would be too harsh.

The Commission notes that in this regard UKE's proposed measure seems to be contradictory: UKE would impose a cost oriented price (preliminarily calculated at PLN 0.01) and at the same time consider that the price level of PLN 0.05 is "justified and appropriate" arguing that the cost oriented price will have adverse effects on the market.

The Commission considers that such price obligation lacks clarity, and appears to be difficult to implement in view of a 400% difference between the "cost oriented" and the "justified and appropriate" price level. The Commission would like to urge UKE to ensure clarity and predictability for market players for example by way of using an appropriate glide-path with a view to arrive at cost-oriented prices without undue delay. Furthermore, UKE should ensure symmetrical termination rates as soon as possible, and not allow different termination rates beyond the necessary time frame."

The full text (in English) of the European Commission's comments letter is availableby clicking here.

Update 30 Aug 2010: On 27 Aug 2010, the Polish regulatory authority UKE issued new draft decisions on regulation of wholesale SMS termination, subject to public consultation until 27 Sep 2010. UKE puts forward in these draft decisions that the mobile network operators each individually have significant market power for wholesale SMS termination, and puts forward regulatory obligations, but defers (in Section 7.4.4 of the documents) the determination/approval of a maximum wholesale charge to a separate decision. The draft UKE decision regarding PTK Centertel is available by clicking here (text in Polish language only).

Update 11 Aug 2010: Today, the Polish regulatory authority UKE withdrew its notified draft measures on regulation of wholesale SMS termination rates, without stating a reason.

Today, France's regulatory authority ARCEP issued its decision to regulate wholesale SMS termination rates down to +/- 2 eurocent per SMS MT by 1 Oct 2010, with an intermediate step in 2011, and then down to 1 eurocent per SMS MT for all French mainland mobile network operators by 1 July 2012.

ARCEP relies on a cost-accounting methodology it describes as 'coûts complets distribués' (which shows 0.4 eurocent per SMS MT in 2009, but allows for some additional wholesale commercialisation costs), and in fact relies strongly on commercial agreements already reached by the French mobile network operators (MNOs), given that ARCEP validates the 2.17c temporary asymmetry for Bouygues Telecom, which was agreed by the two other MNOs, Orange France and SFR.

The ARCEP decision follows the publication (which also occurred today) of the European Commission Article 7 comments letter, dated 16 July 2010 (of great interest and briefly discussed below).

Draft decisions from Denmark's ITST and Poland's UKE are in the short-term pipeline.

Denmark's ITST is proposing (although its LRAIC cost model shows a 2010 value of 2 øre per SMS MT), an immediate imposition of a wholesale price-cap on all MNOs (and on an MVNO) set at 16 øre per SMS MT, which amounts to 2.145 eurocent per SMS MT for 2010. A key argument invoked by ITST to refrain from immediately reducing wholesale SMS termination further is to avoid SMS spam (while ARCEP just issued a decision including evidence that SMS spam, which it has considered, results rather from flat-rate retail offers than from wholesale SMS interconnection, including with SMS aggregators that are not MNOs).

Poland's UKE is proposing to impose 'non-excessive pricing' symmetrically on all mobile network operators, set at PLN 0.05 which amounts to 1.238 eurocent per SMS MT (although its cost assessment shows a value 'strongly below 0.01 PLN').

Today's ARCEP decision is of interest for at least two other key reasons:

a)      ARCEP has included a 'reciprocity clause', implying that foreign MNOs would only be entitled to the regulated French wholesale SMS MT rates IF they agree to apply reciprocally the same rate as the French regulated wholesale rates for SMS MT. The European Commission commented that this may not conform to EU law, and may hamper the development of the internal market for SMS services. ARCEP's final decision, Section 5.7.2 (pages 102-104) rejects the European Commission's arguments, and indeed states that NOT imposing the 'reciprocity clause' would distort the internal market to the detriment of French operators (estimated prejudice is €26m/year), and invokes Art 8.2 b) of the Framework Directive 2002/21/EC (NRAs mandate to ensure that there is no distortion or restriction of competition in the electronic communications sector) to justify its measure, i.e. that the market is NOT distorted or restricted against French MNOs.

b)      Beneficiaries from ARCEP's measures on wholesale SMS termination explicitly include authorised operators that are not MNOs, including fixed operators, SMS aggregators, etc. who enter into wholesale access/interconnection agreements with the French MNOs. The European Commission explicitly did not question that the termination of 'SMS Push' services (e.g. those processed by SMS aggregators) is part of the relevant markets for SMS termination. However, the European Commission commented that (further) penetration of (Internet-enabled) smartphones among the population may influence the competitive dynamics of wholesale SMS termination (more so for services facilitated by SMS aggregators than for interpersonal SMS, with explicit reference only to mobile e-mail), potentially reducing the impact of the calling party pays principle for wholesale SMS termination. ARCEP agreed to the European Commission's invitation to closely monitor 'the delivery of content onto mobile devices which may lead ARCEP to no longer include the wholesale termination services for Push SMS services in the relevant market for wholesale SMS termination and to consider removing regulation'. T-REGS Note: the European Commission's comments letter makes no mention of interpersonal Internet-based Instant Messaging (IM) on mobile devices, whereas ARCEP indicates that 24.1% of French mainland mobile users make use of mobile IM.

The following documents are directly relevant to this T-REGS news item:

ARCEP final decision on wholesale SMS termination (available only in French)

European Commission comments letter on ARCEP draft decision wholesale SMS termination (English)

Denmark ITST draft decision on wholesale SMS termination (available only in Danish)

Poland UKE draft decision on wholesale SMS termination (available only in Polish) - PTK Centertel draft decision; other decisions available separately

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Following a lengthy preparatory process (see the T-REGS news item of 28 July 2009) today's Belgian Official Journal contains a law amending the Electronic Communications law of 13 June 2005 "concerning the change of operator".

The new law specifically addresses the circumstances in which an end-user terminates the contract with "a provider of an Internet access service", which has provided that end-user with the possibility to create e-mail addresses or web space based on the trade name or brand name(s) of the provider of the Internet access service. Its aim is to institute a transition period of at least 6 months, during which the end-users will, upon their explicit request, still be able to receive/check e-mail and during which the website(s) of the end-users will remain reachable.

The new law requires the providers of Internet access services to develop a code of conduct and to file this code of conduct with the Belgian telecommunications regulatory authority BIPT/IBPT within 4 months from 16 June 2010.

With regard to e-mail, the code of conduct must provide for two options (the choice between the two options is made by each provider of an Internet access service, not by the end-user):

a) the establishment of an automatic interception mechanism, which forwards electronic mail arriving on the end-users' e-mail address(es) to a new e-mail address to be chosen by the end-user;

b) access to the electronic mail arriving on the end-users' e-mail address(es).

With regard to web space, the code of conduct must specify that the website(s) of the end-user remains accessible, even if the end-user can no longer use the web space via the URL associated with it.

Following a public consultation, the BIPT/IBPT will examine whether the code of conduct filed by the providers of Internet access services meets the requirements of the law. If it does, the providers of Internet access services will publish the code in a manner prescribed by the regulator, and the code will enter into force at the latest 10 months from 16 June 2010. If no code is filed by the providers of Internet access, or if the regulator considers that the filed code does not meet the requirements of the law, the Minister in charge of telecommunications will determine, upon proposal of the BIPT/IBPT, the rules for the provision of the facilities that are the subject of the law.

The forward/access capabilities must be provided to the end-users free of charge, and providers of an Internet access service are required to inform end-users of these possibilities when an end-user indicates that he/she wishes to terminate the contract, and also (within 12 months from 16 June 2010) to include, at least once a year, a clearly legible description of these capabilities on an invoice.

The full text of the law (available only in Dutch and French) is available by clicking here.

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On 13 April 2010, the Appeals Court (College van Beroep voor het Bedrijfsleven) in Rotterdam annulled the Dutch regulatory authority OPTA's decision on Market 6 (wholesale terminating segments of leased lines) of 19 December 2008.

A key characteristic of that OPTA decision was that it distinguished the market for leased lines up to 20 Mbit/s (‘low capacity') from the market for leased lines above 20 Mbit/s (‘high capacity') at the retail level and at the wholesale level (with regulation adopted only at the wholesale level).

The annulment (following appeals filed by many operators, on various grounds and defending a variety of positions) relates specifically to OPTA's market definition/market segmentation, and is remarkable, as it relies to a great extent on technical detail, and addresses questions surrounding copper and fibre as supply-side and demand-side substitutes.

In particular, the Court's judgment concludes that, in the specific context of leased lines, OPTA should have found that that neither pair-bonded copper nor VDSL2 constitute valid substitutes for fibre.

The Court's judgment was only recently published in its entirety and this now allows us to provide an analysis of the precise reasoning relied upon by the Court.

1. Supply-side: technical analysis - pair-bonding and VDSL2

First of all, the Court considers that OPTA's assessment of the development of certain technical solutions, such as pair-bonding of copper lines, was incorrect. It finds that there appear to be insufficient resources (insufficient number of copper lines serving the premises) in many areas where businesses are located. Pair-bonding is therefore considered by the Court not to be a feasible alternative to high-capacity fibre in these areas. Even if sufficient copper lines are physically present, the Court considers that OPTA has not sufficiently analysed whether they are available to be pair-bonded into high capacity (20 Mbit/s or more) leased lines.

Secondly, the Court considers that OPTA has not sufficiently assessed the length of the copper loops, and the impact thereof on the possibility to achieve high speeds by utilising pair-bonding. The Court states that, in locations where the copper loops are too long, bonded loops will not achieve performance matching a >20 Mbit/s fibre connection.

Thirdly, OPTA has, according to the Court, erroneously assessed the potential of VDSL2, and the Court adds that the asymmetrical nature of VDSL2 makes it only suitable for residential markets but not for business markets (which, according to the Court, require symmetrical connections). Distance from the MDF also plays a role, and hence the suitability of VDSL2 as a substitute for high capacity leased lines should have been more critically analysed. The fact that VDSL2 was not substantially rolled out at the time of the OPTA decision also contributes to the doubts expressed by the Court.

2. Supply-side: proportion of copper/fibre in the >20 Mbit/s segment

The Court's judgment, in the specific context of leased lines, is that OPTA's conclusion that pair-bonded copper can generate disciplinary price pressure on fibre is flawed.

OPTA had not researched the proportion of copper and fibre access used. According to the Court, such research was necessary to ascertain in reality whether copper really exercises sufficient disciplinary price pressure on high capacity fibre, and for OPTA to conclude that they can be placed in the same markets.

The Court adds that re-migration from fibre to copper is not a plausible option, as this would annul the investments already made in fibre.

3. Demand substitution

The Court finds that the data on which OPTA has based itself to research demand substitution is insufficient to come to a valid conclusion, and that OPTA has therefore incorrectly assumed that the data (provided by Dialogic in 2008 in the form of a report) was sufficient to gain insight into this matter. OPTA's conclusion with regard to demand substitutability is therefore ruled invalid by the Court.

The Court also concludes that, in stating that a price comparison of leased lines offers is impossible due to the many different packages and bundles, OPTA has not been able to put forward a solid basis for its statement that there is a price jump between 2 Mbit/s and 34 Mbit/s, which in turn would lead to an absence of demand substitution between leased lines with a capacity up to 20 Mbit/s and leased lines with a capacity above 20 Mbit/s.

The Court therefore concludes that a correct delimitation and definition of low capacity and high capacity leased lines has not been established by OPTA, and that the market analysis decision must be annulled.

OPTA is given 6 months to issue a new decision; in the meantime, the annulled decision stands.

The full text of the CBB judgment (in Dutch only) can be accessed by clicking here.

For a discussion of this case, and its possible implications for other markets, please contact This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

This evening, the Belgian Federal Parliament (House and Senate) adopted a Declaration containing the articles of the Constitution that can be amended by the next Federal Parliament.

The Declaration includes two specific articles relating to telecommunications.

Article 23 of the Constitution was declared open to amendment, explicitly with a view to enabling the next Federal Parliament to create a constitutional right for citizens to Universal Service for post, communications and mobility.

Article 29 of the Constitution was also declared open to amendment. This article concerns the secrecy of letters. In the explanatory memorandum filed with the draft of the declaration,  reference was made to the extension of the secrecy of letters  to 'new forms of communication' and 'other forms of correspondence'.

The same Declaration confirms the contents of the Declaration of 2007 (not discussed in detail by the Federal Parliament), which enables institutional reform, including the potential for responsibility over telecommunications to be moved from the Federal level to the federated entities.

Update late 7 May 2010: The final text of the Declaration, published in the second edition of the Moniteur Belge/Belgisch Staatsblad, is accessible by clicking here.