The Irish regulatory authority ComReg has published a document entitled “Market Analysis: Wholesale Broadband Access (Response to Consultation Document 04/25 and Draft Decision)”.
This follows a consultation which was opened in March 2004, and which was also covered by a T-REGS news item.
In terms of market definition, ComReg concluded that the market for wholesale broadband access should include the provision of bitstream services to third parties, as well self-supply by the fixed incumbent operator Eircom, and the self-supply by cable operators and fixed wireless access operators. Geographically, the market is national.
Taking this market definition, shares of the wholesale broadband access market (derived from the retail market), at the end of Q1 2004 were divided as follows: 85% ADSL bitstream access (about 80% of which was self-supplied by Eircom), 12% cable access (essentially self-supply), and 3% fixed wireless access (essentially self-supply).
Based upon this market share data, Eircom is found to have Significant Market Power, and ComReg is putting forward the following proposed regulatory obligations (‘remedies’):
• Access based on a regime of reasonable requests for access as guided by the principles set out in Regulation 13 of the Access Regulations.
• Price control in the form of a retail minus mechanism.
(A retail-minus approach is considered appropriate to the conditions of an expanding market, and as a protection against margin squeeze. ComReg will hold a further consultation on the detail of the implementation of the retail minus mechanism.)
• Obligation of non-discrimination.
• Obligation of transparency with respect to all bitstream products and associated facilities and the terms and conditions under which they are supplied.
(A bitstream access reference offer is put forward as a requirement.)
• Obligation of accounting separation to support the monitoring of the non-discrimination principle and to assist in the application of the retail minus mechanism and the calculation of avoidable retail costs.
ComReg will hold a further consultation on the detail of the implementation of the accounting separation mechanism.
ComReg also considered whether functional differences at the wholesale level suggest that local loop unbundling (Market 11) and bitstream access (Market 12) services are or are not in the same relevant market, and whether differences in the wholesale charges (including costs attributable to additional equipment) suggest that local loop unbundling and bitstream access are or are not in the same relevant market.
The proposed conclusion is that they are NOT the same relevant market. This is consistent with the European Commission’s Explanatory Memorandum associated with the Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation.
The deadline for responding to this consultation is 27 Aug 2004.