Of Directive 2002/21/EC – C(2020)
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EUROPEAN COMMISSION Brussels, 16.7.2020 C(2020) 4997 final Communications Regulation Commission (CRC) 6 Gurko str, 1000 Sofia Bulgaria For the attention of: Mr Ivan Dimitrov Chairman Fax: +359 2 987 06 95 Subject: Cases BG/2020/2256 and BG/2020/2257: Wholesale call termination on individual public telephone networks provided at a fixed location and wholesale call termination on individual mobile networks in Bulgaria Article 7(3) of Directive 2002/21/EC: No comments Dear Mr Dimitrov, 1. PROCEDURE On 19 June 2020, the Commission registered notifications from the Bulgarian national regulatory authority, the Communications Regulation Commission (CRC)1, concerning the review of the markets for (i) wholesale call termination on individual public 1 Under Article 7 of Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) (OJ L 108, 24.4.2002, p. 33), as amended. Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111 telephone networks provided at a fixed location and (ii) wholesale call termination on individual mobile networks in Bulgaria 2. The national consultation3 ran from 19 March 2020 to 21 April 2020. The Commission sent a request for information4 to CRC on 30 June 2020, and received a reply on 3 July 2020. 2. DESCRIPTION OF THE DRAFT MEASURE The notification concerns the fixed and mobile termination markets. 2.1. Background The third review of the termination markets was previously notified to and assessed by the Commission under cases BG/2016/1862 and BG/2016/18645. The price control remedies for the two relevant markets were notified and assessed under case BG/2016/1912 (for market 1) and BG/2016/1924 (for market 2). CRC set the fixed termination rates (FTRs) and mobile termination rates (MTRs) for the years 2017 to 2020 on the basis of a BU-LRIC cost model6. For 2020, the FTR was set at BGN 0.0014 (EUR 0.072 cent) per minute, and the MTR at BGN 0.014 (EUR 0.72 cent) per minute. 2.2. Market definition The product market definition of the termination markets remains unchanged from the previous notification. The geographic scope corresponds to the geographic coverage of each network on the territory of the Republic of Bulgaria. 2.2.1. Wholesale call termination on individual public telephone networks provided at a fixed location CRC concluded that there are no products available that may be considered a substitute for the service of terminating a call on individual public telephone networks provided at a fixed location, regardless of the origin of the call. Therefore, each network is a separate product market. CRC found in total 19 distinct product markets. 2 Corresponding respectively to market 1 and 2 in Commission Recommendation 2014/710/EU of 9 October 2014 on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with the Framework Directive (2014 Recommendation on Relevant Markets) (OJ L 295, 11.10.2014, p. 79). 3 In accordance with Article 6 of the Framework Directive. 4 In accordance with Article 5(2) of the Framework Directive. 5 C(2016) 3325. 6 For the FTRs, the applicable rate for 2017 started to apply on 1 November 2016. 2 2.2.2. Voice call termination on individual mobile networks CRC also concluded that there are no products available that may be considered a substitute for the service of terminating calls on individual mobile networks, regardless of the origination of the call. In particular CRC confirms its view that unmanaged VoIP services, usually provided as OTT services, could not be considered as a substitute to traditional voice call termination services, because these services require both, the calling party and the called party to have simultaneously access to internet and to the same application. Therefore, each mobile network is a separate product market. CRC found in total 4 distinct product markets. 2.3. Finding of significant market power 2.3.1. Voice call termination on individual public telephone networks provided at a fixed location CRC found that all 19 undertakings7 providing wholesale call termination services at a fixed location have SMP, as every fixed network represents a separate market for call termination. The criteria used in the SMP analysis are inter alia: market share, barriers to entry and expansion on the relevant market and countervailing buyer power. 2.3.2. Voice call termination on individual mobile networks CRC found that all 4 undertakings8 operating a mobile network have SMP on the market for wholesale voice call termination services, as every mobile network represents a separate market for call termination. The criteria used in the SMP analysis are inter alia: market share, barriers to entry and expansion on the relevant market and countervailing buyer power. 2.4. Regulatory remedies 2.4.1. Voice call termination on individual public telephone networks provided at a fixed location CRC proposes to impose on all SMP operators the obligations of (i) access, (ii) transparency, (iii) non-discrimination, and (iv) price control. On BTC, CRC additionally proposes to impose the obligation to provide access to specific network elements (in particular for the provision interconnection and co-location)9 and to publish a reference offer and of accounting separation. 7 A1 Bulgaria EAD; Bulsatcom EAD; Bulgarian Telecommunications Company EAD; Varna Net OOD; Vimobile AD; Gold Telecom Bulgaria AD; GTT Bulgaria EAD; Escom OOD; Eastern Telecommunication Company AD; Cabel Sat Zapad OOD; Coolbox AD; Net 1 EOOD; Net Is Sat EOOD; Netfinity EAD; Novatel EOOD; Telekabel AD; Теlеcом 1 OOD; Telecomunikacionna Compania Varna EAD; Telenor Bulgaria EAD. 8 A1 Bulgaria ЕАD; Bulgarian Telecommunication Company EAD; Bulsatcom EAD; Telenor Bulgaria ЕАD. 9 CRC intends to continue to impose to the incumbent BTC to provide access services to network facilities and elements necessary for accessing the network including the provision of co-location and 3 All undertakings designated as having SMP on the respective relevant markets would be obliged to apply cost-oriented call termination rates. CRC proposes to continue to apply the FTR previously set10 for the year 2020 (BGN 0.0014 -EUR 0.072 cent- per minute) until the entry into force of the delegated act foreseen in Article 75 of the European Electronic Communications Code (EECC)11. CRC considers that the cost of updating its BU-LRIC model would be disproportionate compared to the benefits for competition and consumers, given that the above- mentioned delegated act to be adopted by the end of 2020 will define a single maximum fixed voice termination rate and will replace nationally set rates. CRC also points out that the rate of EUR 0.072 cent/min is below the average of fixed termination rates in the EU. The price control remedy applies to calls originated in the European Economic Area (EEA). 2.4.2. Voice call termination on individual mobile networks CRC proposes to impose on all SMP operators the obligations of (i) access, (ii) transparency, (iii) non-discrimination, and (iv) cost-oriented pricing. In addition, an accounting separation obligation would be imposed on the three largest mobile operators. CRC proposes to continue to apply the MTR previously set12 for 2020 (BGN 0.014 (EUR 0.72 cent) per minute) until the entry into force of the above- mentioned delegated act as it again considers that it would be disproportionate to update the model. The price control remedy applies to calls originated in in the EEA. 3. NO COMMENTS The Commission has examined the notifications and the additional information provided by CRC in the reply to the RFI and has no comments.13 Under Article 7(7) of the Framework Directive, CRC may adopt the draft measure and, where it does so, shall communicate it to the Commission. The Commission’s position on this particular notification is without prejudice to any position it may take on other notified draft measures. Pursuant to point 15 of Recommendation 2008/850/EC14 the Commission will publish this document on its website. If CRC considers that, in accordance with EU and national rules interconnection (non-traffic services). The charges applied are subject to a price cap in order to prevent that BTC charges excessive prices. CRC considers that given the size and high market shares of BTC (in terms of fixed lines and volume terminated), this operator still has incentives to deny access to facilities necessary for interconnection or to apply discriminatory conditions or excessive requirements. 10 Rate set by the decision assessed under the case BG/2016/1912. 11 Directive 2018/1972/EC of the European Parliament and of the Council of the 11 December 2018 establishing the European Electronic Communications Code. 12 Rate set by the decision assessed under the case BG/2016/1924. 13 In accordance with Article 7(3) of the Framework Directive. 4 on business confidentiality, this document contains confidential information that you wish to have deleted prior to publication, please inform the Commission15 within 3 working days of receipt16 and give reasons for any such request. Yours sincerely, For the Commission Roberto Viola Director-General 14 Commission Recommendation 2008/850/EC of 15 October 2008 on notifications, time limits and consultations provided for in Article 7 of Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services, OJ L 301, 12.11.2008, p. 23. 15 By email: [email protected] . 16 The Commission may inform the public of the result of its assessment before the end of the 3-day period. 5 .