Wholesale Broadcasting Transmission Services

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Wholesale Broadcasting Transmission Services Wholesale Broadcasting Transmission Services Identification and Analysis of Markets, Determination of Market Power and Setting of Remedies. Final Decision 24th November 2008 Market Review – Wholesale broadcasting transmission services Contents Executive Summary ................................................................................... 1 Chapter 1 Introduction ........................................................................... 3 01.1 Market review methodology ........................................................ 3 01.2 Consultation ............................................................................. 4 01.3 Liaison with Competition Authority ............................................... 5 01.4 Structure of the document .......................................................... 5 01.5 Scope of this Review ................................................................. 5 Chapter 2 Market Definition ................................................................... 6 02.1 Background to broadcasting services in Malta ................................ 6 02.2 Radio broadcasting services ........................................................ 7 02.3 Television broadcasting services .................................................. 9 02.4 Method for defining broadcasting markets ................................... 10 02.5 Delineation of retail radio broadcasting markets ........................... 10 02.6 Delineation of wholesale radio broadcasting markets ..................... 12 02.7 Delineation of retail television broadcasting markets ..................... 13 02.8 Delineation of wholesale television broadcasting markets ............... 20 02.9 Identified markets .................................................................... 27 02.10 Geographic scope of markets ..................................................... 27 Chapter 3 The Three Criteria Test ......................................................... 28 03.1 Wholesale broadcasting services susceptible to ex ante regulation ... 28 03.2 Wholesale television and radio broadcasting transmission services over digital terrestrial, digital cable and analogue cable networks .... 28 03.3 Wholesale radio broadcasting transmission services over D-TAB networks ................................................................................. 32 03.4 Conclusions on the three criteria test .......................................... 34 Contents Market Review – Wholesale broadcasting transmission services Chapter 04 Regulatory Obligations ......................................................... 35 04.1 Introduction ............................................................................ 35 04.2 Existing obligations .................................................................. 35 04.3 Withdrawal of regulation ........................................................... 35 04.4 Monitoring and reviewing of the market ....................................... 36 Appendix 1 - Channel list ......................................................................... 37 Appendix 2 – Licensed Nationwide Radio Stations ................................... 40 Appendix 3 – Licensed Local Radio Stations ............................................. 41 Contents Market Review – Wholesale broadcasting transmission services Executive Summary In accordance with Article 9 of the Electronic Communications (Regulation) Act, the Malta Communications Authority (MCA) is obliged, amongst other things, to carry out reviews of competition in communications markets to ensure that regulation remains appropriate in the light of changing market conditions. This review sets out the MCA’ analysis for the identification of a wholesale broadcasting transmission services market and an assessment of market power. In line with its obligations at law, the MCA carried out a national consultation from the 29th August 2008 till the 30th September 2008. The MCA did not receive any responses to the consultation document and is hereby publishing its final decision for wholesale broadcasting transmission services. The MCA also notified the draft decision to the EU Commission on the 17th October 2008, to which the EU Commission fully agreed with the findings of this decision. Background on previous notification In December 2006 the MCA notified a proposed decision on the ‘Wholesale broadcasting transmission services’ market in Malta with the main conclusion being that the cable and digital terrestrial incumbents held single dominance in their respective market. During the Phase 1 of the notification the EU Commission had issued a serious doubts letter stating that the MCA failed to provide sufficient evidence to prove its market definition. Before the opening of a Phase 2 investigation, the MCA held meetings with the EU Commission and provided additional evidence to support its findings. Following these discussions the MCA concluded that it would be in the interest of all parties was it to withdraw the notification to enable it to try to address these concerns. This review presents a fresh analysis of the broadcasting markets in Malta whilst it also attempts to address the issues raised by the EU Commission in the previous notification. Summary of proposals A. Identification of Markets The group of products and services under consideration in this document consist of wholesale broadcasting transmission services. Wholesale services are those sold by electronic communications providers to other service providers rather than to end-users. In relation to these services, the MCA has identified two relevant wholesale broadcasting markets in Malta, which are the: 1. Wholesale television and radio broadcasting transmission services over digital terrestrial, digital cable and analogue cable networks; and 2. Wholesale radio broadcasting transmission services over D-TAB networks. B. Three Criteria Test As the revised European Commission’s Recommendation on relevant product and services markets published in December 2007 excludes the market for wholesale broadcasting services market, the MCA carried out the three criteria test for each market prior to establish it as susceptible to ex ante regulation. This exercise was carried out in accordance with the principles adopted in the Recommendation on relevant product and Page 1 of 41 Market Review – Wholesale broadcasting transmission services service markets. During this analysis the MCA took into consideration, where applicable, both retail and wholesale elements so as to determine whether the markets met the three criteria. From the evidence collected none of the two markets met cumulatively the three criteria. Consequently, in line with the principles of the framework, the MCA concludes that none of the identified wholesale broadcasting markets will be susceptible for ex ante regulation. C. Regulatory Obligations Given that none of the markets has passed the three criteria test the MCA cannot impose and/or maintain any regulatory obligations on operators. Consequently, the MCA is withdrawing all existing regulation on Melita Cable Ltd.1, as mandated under the decision of 2003. 1 Melita plc. has been formerly known as Melita Cable plc. Page 2 of 41 Market Review – Wholesale broadcasting transmission services Chapter 1 Introduction The EU regulatory framework for electronic communications networks and services entered into force on the 14th September 2004. The framework is designed to create harmonised regulation across Europe and is aimed at reducing entry barriers and fostering prospects for effective competition to the benefit of consumers. The basis for the new regulatory framework is five new EU Communications Directives: o Directive 2002/21/EC on a common regulatory framework for electronic communications networks and services (“the Framework Directive”); o Directive 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities (“the Access Directive”); o Directive 2002/20/EC on the authorisation of electronic communications networks and services (“the Authorisation Directive”); o Directive 2002/22/EC on universal service and users' rights relating to electronic communications networks and services (“the Universal Service Directive”); and o Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector (“the Privacy Directive”). The Framework Directive provides the overall structure for the new regulatory regime and sets out fundamental rules and objectives, which read across all the new directives. Article 8 of the Framework Directive sets out three key policy objectives, which have been taken into account in the preparation of this consultation document, namely promotion of competition, development of the internal market and the promotion of the interests of citizens of the European Union. The Maltese legislation transposing these Directives came into effect on the 14th September 2004. The relevant pieces of legislation are the Electronic Communications (Regulation) Act, 2004 (hereinafter referred to as ECRA) and the Electronic Communications Networks and Services (General) Regulations, 2004 (hereinafter referred to ‘ECNSR’). The Directives require National Regulatory Authorities (NRAs) such as the MCA to carry out reviews of competition in communications markets to ensure that regulation remains appropriate in the light of changing market conditions. Each market review is divided into three main parts: o definition of the relevant
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