NOTIFICATION OF DRAFT MEASURES PURSUANT TO ARTICLE 7(3) OF DIRECTIVE 2002/21/EC FOR

Transcription

1 NOTIFICATION OF DRAFT MEASURES PURSUANT TO ARTICLE 7(3) OF DIRECTIVE 2002/21/EC FOR Call origination on the public telephone network provided at a fixed location and Call termination on individual public telephone networks provided at a fixed location Under Article 16 of Directive 2002/21/EC, as amended by Directive 2009/140/CE of the European Parliament and of the Council (the Framework Directive), the Communications Regulation Commission (CRC) conducted an analysis of the markets for Call origination on the public telephone network provided at a fixed location and Call termination on individual public telephone networks provided at a fixed location. On April , CRC reached its preliminary conclusions on the relevant markets definition, the state of competition on these markets, the designation of undertakings having significant market power and the regulatory obligations to be imposed. CRC hereby notifies the European Commission, the Body of European Regulators for Electronic Communications (BEREC) and the National Regulatory Authorities of the Member States of its proposed regulatory measures in accordance with Article 7(3) of the revised Framework Directive. These draft measures are set out in the attached Summary notification form and elaborated in detail in the enclosed draft analysis annexed to the draft decision. Under Article 6 of the Framework Directive and according to the national procedures, CRC carried out three national consultations. The first national consultation started on 7 September 2011 and ended on 7 October The second national consultation ran from 8 December 2011 until 9 January 2012 and the third national consultation ran from March 5, 2012 till April 4, The draft measure takes into account all comments of the interested parties received during the three public consultations and the opinion of the National Competition Authority. 1

2 STANDARD NOTIFICATION OF DRAFT MEASURES PURSUANT TO ARTICLE 7 OF DIRECTIVE 2002/21/EC Please state where applicable: Section 1 Market definition 1.1 The relevant product/service market. Is this market mentioned in the Recommendation on relevant markets? (Market 2 - Section V, Chapter 1., p ; Market 3 Section VI, Chapter 1., p of the annex to the draft decision) On the basis of demand and supply substitution analysis, CRC concluded that the relevant product markets are the market for Call origination on the public telephone network provided at a fixed location and the market for Call termination on individual public telephone networks provided at a fixed location. The relevant product markets correspond to those listed in the Annex to the 2007 Recommendation as markets 2 and The relevant geographic market. (Market 2 - Section V, Chapter 1.3., p. 192; Market 3 Section VI, Chapter 1.3., p. 220 of the annex to the draft decision) The relevant markets are restricted to the geographic coverage of each network on the territory of the Republic of Bulgaria. 1.3 A brief summary of the opinion of the National Competition Authority, where provided. (Section II, p , p and p. 159 of the annex to the draft decision) The National Competition Authority stated that CRC has defined the markets subject to ex ante regulation in accordance with the criteria and principles of competition law. 1.4 A brief overview of the results of the public consultation to date on the proposed market definition (e.g. how many comments were received, which respondents agreed with the proposed market definition, which respondents disagreed with it). (Section II, p of the annex to the draft decision) Responses from four interested parties were received during the three public consultations. Cosmo Bulgaria Mobile EAD, Mobiltel EAD, the Bulgarian Telecommunications Company AD and the Society for Electronic Communications (SEC) expressed their views that termination of calls, originating from non-eu countries, should be excluded from the scope of the market for Call termination on individual public telephone networks provided at a fixed location and should not be regulated. Cosmo Bulgaria Mobile further claimed that the termination of international transit traffic should also be excluded from the scope of the market. The proposals and claims of the interested parties were not accepted. The opinion of CRC on the above issues is presented in Section II of the annex to the draft decision. The proposed market definitions remain unchanged after the public consultations. 2

3 1.5 Where the relevant market is different from those listed in the Recommendation on relevant markets, a summary of the main reasons justifying the proposed market definition by reference to Section 2 of the Commission guidelines on market analysis and the assessment of significant market power under the Community regulatory framework for electronic communications and services 1, and the three main criteria mentioned in recitals 5 to 13 of the Recommendation on relevant markets and Section 2.2 of the accompanying Explanatory Note. 2 Please state where applicable: Section 2 Designation of undertakings with significant market power 2.1 The name of the undertakings designated as having, individually or jointly, significant market power. (Section VI and VIII of the draft decision) Market 2 CRC concluded that one undertaking has SMP on the market for Call origination on the public telephone network provided at a fixed location, namely: - Bulgarian Telecommunication Company AD ( Българска телекомуникационна компания АД); Market 3 CRC concluded that all undertakings operating fixed networks have SMP on the market for Call termination on individual public telephone networks provided at a fixed location, namely: - Bulgarian Telecommunications Company AD ( Българска телекомуникационна компания АД); - ITD Network AD ( Ай Ти Ди Нетуърк АД); - Blizoo Media and Broadband EAD ( Близу Медиа Енд Броудбенд ЕАД); - Varna Net OOD ( Варна Нет ООД); - Vestitel BG AD ( Вестител БГ АД); - Voxbone S.A./N.V, - Global Communication Net AD ( Глобъл Комюникейшън Нет АД); - Gold Telecom Bulgaria AD ( Голд Телеком България АД); - Eastern Telecommunication Company AD ( Източна телекомуникационна компания АД); 1 2 OJ C 165, , p. 6. Explanatory Note accompanying the Commission Recommendation of on Relevant Product and Service Markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communication networks and services, C (2007)5406 published at _1483_2.pdf 3

4 - Interbild OOD ( Интербилд ООД); - Interoute EAD ( Интеруут България ЕАД); - Cosmo Bulgaria Mobile ЕАD ( Космо България Мобайл ЕАД); - Mobiltel ЕАD ( Мобилтел ЕАД); - Nexcom Bulgaria EAD ( Некском България ЕАД); - Net Is Sat OOD ( Нет Ис Сат ООД); - Netfinity EOOD ( Нетфинити ЕООД); - Orbitel EAD ( Орбител ЕАД); - Skat TV OOD ( Скат ТВ ООД); - Spectrum Net EAD ( Спектър Нет ЕАД); - Теlеcом 1 OOD ( Телеком 1 ООД). Where applicable, the names of the undertakings considered no longer to have significant market power. 2.2 The criteria used to designate an undertaking as having significant market power, individually or jointly, or not Market 2 (Section V, Chapter 2.2., p of the annex to the draft decision): - Market share; - Barriers to entry and expansion on the relevant market; - Absence of or low countervailing buying power. Market 3 (Section VI, Chapter 2.2., p of the annex to the draft decision): - Market share; - Barriers to entry and expansion on the relevant market; - Absence of or low countervailing buying power. 2.3 The name of the main undertakings (competitors) active in the relevant market. - Market 2 Bulgarian Telecommunications Company AD Market 3 Cf. p. 2.1 above. 2.4 The market shares of the undertakings mentioned above and the basis for calculation of market share (e.g. turnover, number of subscribers). (Market 2 - Section V, Chapter , p. 201; Market 3 Section VI, Chapter , p. 229) Market 2: The only undertaking providing wholesale call origination is the incumbent, the Bulgarian Telecommunications Company AD, and therefore has 100% share on the merchant market. Market 3: Each network provider as above listed in p has a 100 % market share. 2.5 The opinion of the national competition, authority where provided. (Section II, p , p and p. 159) 4

5 The National Competition Authority agrees with the conclusions of CRC about the undertakings that should be designated as having significant market power on all markets. 2.6 The results of the public consultation to date on the proposed designation(s) as undertakings having significant market power (e.g. total number of comments received, numbers agreeing/disagreeing). (Section II, p. 14, p. 97 and p. 142) No objections by the interested parties. Please state where applicable: Section 3 Regulatory obligations 3.1 The legal basis for the obligations to be imposed, maintained, amended or withdrawn (Articles 9 to 13 of Directive 2002/19/EC). (Section VII, Chapter 1, p. 235) Obligations to be imposed on SMP operators Market 2: On the Bulgarian Telecommunications Company AD: - Obligations of access to, and use of, specific network facilities (Art. 12 of Directive 2002/19/EC; Art. 166, par. 2, item 4, Art. 173 and Art. 174, par. 1, items 1, 2, 3, 5, 6 and 9, and par. 2 of the Law on Electronic Communications (LEC); - Transparency (Art. 9 of Directive 2002/19/EC; Art. 166, par. 2, item 1 and Art. 167, par. 1 to par. 3 of LEC; - Requirement to publish a reference offer (Art. 9 of Directive 2002/19/EC; Art. 167, par. 3 of LEC); - Obligation of non-discrimination (Art. 10 of Directive 2002/19/EC; Art. 166, par. 2, item 2 and Art. 168 of LEC); - Obligation of accounting separation (Art. 11 of Directive 2002/19/EC; Art. 166, par. 2, item 3 and Art. 169 of LEC); - Price control (Art. 13 of Directive 2002/19/EC; Art. 166, par. 2, item 5; Art. 170 and Art. 220 of LEC). Given the conclusions of the market analysis and potential competition problems identified, CRC believes that glide path should be set for call origination to ensure the development of competition. CRC sets the price ceilings for call origination equal to the respective ceilings of call termination rates. The price ceilings set are substantiated in detail in Section VII, item of the annex to the draft decision. According to the obligations of access to, and use of, specific network facilities, the Bulgarian Telecommunications Company AD shall apply local segment origination rates both to local and single segments call origination as defined at present in conformance to the National Destination Codes (NDC) of geographic numbers, which segments are approved by CRC under Decision No 375 of 14 April 2010 with regard to the Reference Interconnection Offer of BTC. Under the said obligation, the Bulgarian Telecommunications Company AD 5

6 shall apply national segment call origination rates to double segment call origination, defined under CRC s Decision No 375 of 14 April 2010 in compliance to the same principle of use of NDCs of geographic numbers. The geographic codes applicable to local and national segments are indicated in the draft analysis annexed to the draft decision. In accordance with the above, CRC intends to set the call origination rates to be applied by the Bulgarian Telecommunications Company AD within the glide path, as follows: From: Origination rates Peak hours - Local segment, BGN per minute Off-peak hours ,0090 (0,460 eurocents) 0,0075 (0,383 eurocents) ,0085 (0,435 eurocents) 0,0070 (0,358 eurocents) From: Origination rates - National segment, BGN per minute Peak hours Off-peak hours ,0110 (0,562 eurocents) 0,0093 (0,476 eurocents) ,0085 (0,435 eurocents) 0,0070 (0,358 eurocents) The Bulgarian Telecommunications Company AD is obliged to apply as of 1 July 2013 costoriented call origination rates, equal to the cost-based call termination rates to be determined on the basis of the costs incurred by an efficient operator under a BU-LRIC model developed by CRC in compliance with Commission Recommendation 2009/396/EC on the Regulatory Treatment of Fixed and Mobile Termination Rates in the EU. The model shall be completed by the end of Market 3: On the Bulgarian Telecommunications Company AD: - Obligations of access to, and use of, specific network facilities (Art. 12 of Directive 2002/19/EC; Art. 166, par. 2, item 4; Art. 173; Art. 174, par. 1, items 2, 3, 5 and 6 and par. 2 of LEC); - Transparency (Art. 9 of Directive 2002/19/EC; Art. 166, par. 2, item 1 and Art. 167, par. 1 of LEC); - Requirement to publish a reference offer (Art. 9 of Directive 2002/19/EC; Art. 166, par. 3 of LEC); - Obligation of non-discrimination (Art. 10 of Directive 2002/19/EC; Art. 166, par. 2, item 2 and Art. 168 of LEC); 6

7 - Obligation of accounting separation (Art. 11 of Directive 2002/19/EC; art. 166, par. 2, item 3 of LEC); - Price control (Art. 13 of Directive 2002/19/EC; Art. 166, par. 2, item 5; Art. 170 and Art. 220 of LEC). On the undertakings listed in p above, which are designated as having SMP on the relevant markets: - Obligations of access to, and use of, specific network facilities (Art. 12 of Directive 2002/19/EC; Art. 166, par. 2, item 4; Art. 173; Art. 174, par. 1, items 2, 3, 5 and 6 and par. 2 of LEC); - Transparency (Art. 9 of Directive 2002/19/EC; art. 166, par. 2, item 1 and Art. 167, par. 1 of LEC); - Obligation of non-discrimination (Art. 10 of Directive 2002/19/EC; Art. 166, par. 2, item 2 and Art. 168 of LEC); - Price control (Art. 13 of Directive 2002/19/EC; Art. 166, par. 2, item 5; Art. 170 and Art. 220 of LEC). All undertakings designated as having SMP on the respective relevant markets are obliged to apply, as of 1 July 2013, cost-oriented call termination rates. The call termination rates will be set on the basis of costs incurred by an efficient operator and determined by a BU-LRIC model developed by CRC in compliance with Commission Recommendation 2009/396/EC on the Regulatory Treatment of Fixed and Mobile Termination Rates in the EU. The model shall be completed by the end of Until the effective implementation of cost-oriented rates for termination of calls at a fixed location (FTRs), irrespective of the nature of the originating network (other fixed and mobile national and/or international networks), CRC intends to set a glide path to be applied to FTRs, as follows: From: Termination rates Peak hours Local segment, BGN per minute Off-peak hours ,0090 (0,460 eurocents) 0,0075 (0,383 eurocents) ,0085 (0,435 eurocents) 0,0070 (0,358 eurocents) From: Termination rates - National segment, BGN per minute Peak hours Off-peak hours ,0110(0,562 eurocents) 0,0093(0,476 eurocents) ,0085(0,435 eurocents) 0,0070(0,358 eurocents) The above FTRs are determined by an international benchmark in order to ensure consistency with Commission Recommendation 2009/396/EC. The benchmark is based on the trend of FTRs reduction from July 2010 to September 2012 in the Netherlands in accordance with the 7

8 glide-path set by the Dutch regulator OPTA. The selected country has submitted a notification to the Commission in July 2011 proposing to set FTRs and MTRs based on pure BU-LRIC model. The FTRs for local and national segments are applied under the revealed above principle of use of NDCs of geographic numbers. The geographic codes applicable to local and national segments are indicated in the draft analysis annexed to the draft decision Obligations to be withdrawn CRC proposes to withdraw the obligations to publish and update, on their websites, annual financial statements imposed under CRC s Decision No 237 of 17 March 2009 on the following undertakings: Bulgarian Telecommunications Company AD; ITD Network AD; Vestitel BG AD; Eastern Telecommunication Company AD; Interoute EAD; Cosmo Bulgaria Mobile ЕАD; Mobiltel ЕАD; Nexcom Bulgaria EAD; Net Is Sat OOD; Orbitel EAD; Spectrum Net EAD and Теlеcом 1 OOD. Furthermore, CRC proposes to relieve the said undertakings from the obligation to submit to CRC the following documentation: statement of changes in equity, statement of cash flows and additional attachments to the financial statements. Due to amendments in other legislation the information is publicly available. CRC proposes to withdraw the obligation imposed on the Bulgarian Telecommunications Company AD with regard to implementation of the necessary changes in the existing cost allocation system in connection with the amended accounting separation obligation regarding the costs for call origination and call termination. 3.2 The reasons for which the imposition, maintenance or amendment of obligations on undertakings is considered proportional and justified in the light of the objectives laid down in Article 8 of Directive 2002/21/EC. Alternatively, indicate the paragraphs, sections or pages of the draft measure where such information is to be found. See Section VII of the annex to the draft decision. 8

9 3.3 Where the remedies proposed are other than those set out in Articles 9 to 13 of Directive 2002/19/EC, please indicate what "exceptional circumstances" within the meaning of Article 8 (3) of that directive justify the imposition of such remedies. Alternatively, indicate the paragraphs, sections or pages of the draft measure where such information is to be found. Section 4 Compliance with international obligations In relation to the third intend of the first subparagraph of Article 8(3) of Directive 2002/19/EC, please state where applicable: 4.1 Whether the proposed draft measure intends to impose, amend or withdraw obligations on market players as provided for in Article 8(5) of Directive 2002/19/EC. 4.2 The name of the undertakings concerned. 4.3 What international commitments entered into by the Community and the Member States are to be met. 9