Analysis of the Wholesale Market for Broadcasting Transmission Services, to Deliver Broadcast Content to End Users
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Analysis of the wholesale market for broadcasting transmission services, to deliver broadcast content to end users 28 September 2006 Contents Summary and conclusion ............................................................................................ 4 1 Background and legal framework for the market analyses.................................. 7 1.1 Background.................................................................................................... 7 1.2 Legal framework for the market analysis ...................................................... 8 1.3 General - market definition.......................................................................... 10 2 Description of the broadcasting market ............................................. 12 2.1 Introduction.................................................................................................. 12 2.2 The broadcasting market.............................................................................. 13 2.2.1 Developments in the market ................................................................ 13 2.2.2 Broadcasting legislation....................................................................... 13 2.2.3 Operators.............................................................................................. 15 2.2.4 The broadcasting networks in general ................................................. 18 2.2.5 The terrestrial networks ....................................................................... 22 2.2.6 Cable TV networks .............................................................................. 25 2.2.7 Satellite ................................................................................................ 27 3 Further information regarding the definition of the relevant product market ................................................................................................................. 28 3.1 Market definition in the Recommendation .................................................. 28 3.2 Introduction to NPT’s assessments.............................................................. 29 3.3 Boundary with the markets for leased lines................................................. 30 3.3.1 Contribution networks – Market 18 or the leased lines markets?........ 31 3.3.2 Feeder networks – Market 18 or the leased lines markets? ................. 32 3.3.3 Trunk networks – Market 18 or the leased lines markets? .................. 33 3.3.4 Access networks – Market 18 or the leased lines markets?................. 33 3.3.5 Conclusion ........................................................................................... 33 3.4 Boundary with ancillary technical broadcasting services............................ 33 3.5 Boundary with content................................................................................. 34 3.6 Substitutability assessments......................................................................... 35 3.6.1 General................................................................................................. 35 3.6.2 Substitutability on the services level.................................................... 35 3.6.3 Substitutability between terrestrial networks and cable/satellite......... 36 3.6.4 Substitutability assessments in the terrestrial network ........................ 38 3.6.5 Substitutability between cable and satellite ......................................... 48 3.6.6 Substitutability with other technologies............................................... 51 3.7 Conclusion – product definition................................................................... 53 4 Definition of the relevant geographic market .................................... 54 4.1 General......................................................................................................... 54 4.2 Terrestrial networks ..................................................................................... 54 4.3 Cable TV...................................................................................................... 56 4.4 Satellite ........................................................................................................ 56 5 Threshold for ex ante regulatory intervention ................................... 58 5.1 General......................................................................................................... 58 5.2 Transmission services for radio on terrestrial networks .............................. 59 5.2.1 The market for transmission services for local radio on terrestrial networks .............................................................................................................. 59 5.2.2 The market for transmission services for national radio on terrestrial networks .............................................................................................................. 60 2 5.2.2.3 Does the market have characteristics such that it will not sufficiently tend towards sustainable competition? ........................................................................ 63 5.3 The market for transmission services for television on terrestrial networks68 5.4 Transmission services on cable TV networks.............................................. 77 6 Summary and conclusion ..................................................................... 84 Appendix 1 Glossary ................................................................................................. 87 Appendix 2 Market definitions in other countries ................................................. 89 Appendix 3 Cable TV................................................................................................ 91 Appendix 4 Digital terrestrial network ................................................................... 93 Appendix 5 Telenor ................................................................................................... 95 Appendix 6 Norges Televisjon (NTV)...................................................................... 97 Appendix 7 The frequency bands............................................................................. 99 3 Summary and conclusion This document contains the market analysis that Norwegian Post and Telecommunications Authority (NPT) has carried out for what is considered the relevant national wholesale markets for broadcasting transmission services, to deliver broadcast content to end users. Chapter 1 contains a description of the background and legal framework for the market analysis, whilst Chapter 2 provides a description of the market. Chapter 3 assesses and defines the relevant product market. This definition is based on ESA’s predefined product market. On the basis of assessments linked inter alia to demand- and supply-side substitution, NPT has concluded that the market must be divided into segments. This represents a deviation from the Recommendation. Initially, NPT has divided the broadcasting market by technical platform into terrestrial networks, cable TV networks and satellite respectively. For all three of these platforms the product market is defined in a technologically neutral manner, covering therefore both digital and analogue transmissions. Other technical platforms that can be used for broadcasting transmissions, inter alia xDSL, optical fibre etc. have been evaluated but have not been found to constitute either separate markets, nor come under any of the other platforms. Following further substitutability assessments, the terrestrial network has been split by specific services into radio and television respectively. A comparable division has not been made in the cable TV and satellite markets. For radio on terrestrial networks, a further division has been made between local and national transmissions. The television market is nationwide. Broadcasting transmission can roughly be divided into four main types: contribution networks, feeder networks, trunk networks and access networks. It is NPT’s opinion that only the access network is covered by Market 18. It is also NPT’s opinion that purchases and agreements on broadcast content fall outside the relevant market. In line with current principles of competition law and with great emphasis on the Recommendation and the Guidelines, NPT has thus defined five relevant product markets: - Transmission services for local radio on terrestrial networks - Transmission services for national radio on terrestrial networks - Transmission services for television on terrestrial networks - Transmission services for radio and television on cable TV networks - Transmission services for radio and television via satellite networks 4 A more specific definition of the broadcasting markets requires a geographic delimitation, cf. the Guidelines paragraph 57. Chapter 4 assesses the relevant geographic definition of each of the market segments. NPT has concluded that broadcasting transmission services via satellite is a transnational market. NPT does not have the power to regulate such markets. Consequently, the satellite market falls outside the further assessment of relevant national markets. The other four product markets are regarded as being national. Since the division into market segments entails a departure from the Recommendation, chapter 5 specifically assesses whether there is a need for ex ante regulation in the four remaining market segments. In accordance with the Recommendation, the following criteria should be met for a product market to qualify for sector-specific ex ante regulation in