EUROPEAN COMMISSION Brussels, 12.2.2021 C(2021)
Total Page:16
File Type:pdf, Size:1020Kb
EUROPEAN COMMISSION Brussels, 12.2.2021 C(2021) 1073 final Commission for Communications Regulation (ComReg) One Dockland Central, Guild Street D01 E4X0 Dublin 1 Ireland Mr. Garrett Blaney Chairperson of the Commission Subject: Case IE/2021/2293: Wholesale market for broadcasting transmission services in Ireland Commission comments pursuant to Article 32(3) of Directive (EU) 2018/1972 Dear Mr Blaney, 1. PROCEDURE On 15 January 2021, the Commission registered a notification from the Irish national regulatory authority (NRA), the Commission for Communications Regulation (ComReg)1, concerning the Irish wholesale market for broadcasting transmission2. 1 Under Article 32 of Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing the European Electronic Communications Code (the Code) (OJ L 321, 17.12.2018, p. 36). 2 Corresponding to market 18 of Commission Recommendation 2003/311/EC of 11 February 2003 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 communications networks and services (Framework Directive), (OJ L 114, 8.05.2003, p. 45). This market has been removed from the list of the relevant markets that may warrant ex ante regulation in 2007 and is not listed in the currently applicable Commission Recommendation (EU) 2020/2245 of 18 December 2020 on relevant product Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111 The national consultation3 ran from 11 May 2020 to 13 July 2020. The Commission sent a request for information4 to ComReg on 22 January 2021, and received a reply on 27 January 2021. A request for further clarifications was sent on 27 January 2021, and the reply was received on 29 January 2021. Under Article 32(3) of the Code, NRAs, the Body of European Regulators for Electronic Communications (BEREC) and the Commission may make comments on notified draft measures to the NRA concerned. 2. DESCRIPTION OF THE DRAFT MEASURE ComReg confirms most of the regulatory obligations imposed in 2013 on the vertically-integrated operator Raidió Teilifís Éireann (RTÉ) on the markets for wholesale access to national terrestrial broadcasting transmission services5 and for wholesale access to digital terrestrial television (DTT) multiplexing services6. RTÉ also operates at retail level as a broadcaster. Wholesale broadcasting transmission and distribution services enable retail free-to-air (FTA) television and radio programme service providers to broadcast content to end users. 2.1. Background The previous review of this market was notified to and assessed by the Commission under case IE/2013/14457. At that time, ComReg found two markets for the provision of terrestrial broadcasting transmission services: a market for wholesale access to national terrestrial broadcasting transmission services (market A) and a market for wholesale access to DTT multiplexing services (market B). ComReg designated RTÉ Transmission Network Limited (RTÉNL)8 as the operator with significant market power (SMP) in market A, and RTÉ in market B. Obligations of access, non-discrimination, transparency, accounting separation, price control and cost accounting have been imposed on both markets. and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with the Code (2020 Recommendation on Relevant Markets) (OJ L 439, 29.12.2020, p. 23- 31). 3 In accordance with Article 23 of the Code. 4 In accordance with Article 20(2) of the Code. 5 Market A consists of the provision of terrestrial broadcasting transmission services (including distribution) to broadcast operators for the purpose of delivering terrestrial broadcasting content to end users. 6 Market B consists of the provision of digital terrestrial television (DTT) multiplexing services to downstream DTT broadcasters for the purpose of delivering digital terrestrial broadcasting content to end users. 7 C(2013) 2861. 8 RTÉNL (now called 2rn) is the transmission operating arm of RTÉ, the Irish national public service broadcaster. RTÉNL/2rn is a wholly owned subsidiary of RTÉ and operates a network of transmission sites from which terrestrial radio and television services are broadcast. 2 The Commission sent ComReg a comment letter inviting it to monitor market developments in terms of infrastructure and service competition at both the retail and wholesale level, and to re-assess the need for and appropriateness of the remedies. 2.2. Market definition At retail level, ComReg considers that pay TV, direct-to-home satellite free-to-air (FTA) TV services and retail TV broadcasting services from other TV platforms are not substitutes for terrestrial FTA TV services9. It also considers that in the future IPTV may become a more pervasive option for an increasing number of end users as higher speed broadband infrastructure is rolled out across Ireland. However, as the higher speed broadband is not yet universally available, ComReg considers IPTV to be outside the scope of the relevant market. Retail FTA DTT broadcasting services markets are considered national in scope. As regards radio broadcasting, ComReg considers that end users would not be expected to switch to other radio broadcast platforms (such as cable, satellite or IP) in the timeframe of this review in a way that would effectively constrain the terrestrial radio transmission platform10. Other platforms would not be effective supply-side substitutes due to lower coverage levels (save for satellite) and limited availability/take-up/mobility of devices/equipment for listening to radio broadcasting. Retail radio services can be distinguished on a local/regional and national basis11. ComReg maintains its definition of two separate wholesale markets for the provision of terrestrial broadcasting transmission services in Ireland as follows: Market A: the market for wholesale access to national terrestrial broadcast transmission services (upstream)12; Market B: the market for wholesale access to DTT multiplexing services (downstream). The geographic scope of both markets A and B is national. 9 ComReg indicates that, as of July 2020, 12% of TV homes relied solely on Irish FTA terrestrial reception, and that this percentage has been broadly stable since 2013. Approximately 59% of TV homes had a pay TV service as of July 2020, down from 70.9% in 2015. Approximately 41% of TV homes had an FTA service as of July 2020, up from 29.1% in January 2015. Internet Protocol (IP) TV is limited mainly to urban areas, and in July 2020 had a take-up of 6% of TV homes. Radio content is primarily transmitted to in-home radio equipment or in-car radios, and 90% of households have an FM/AM radio. 10 There are two categories of national terrestrial radio broadcast services in Ireland, namely RTÉ’s public service broadcasting radio services and national independent commercial radio services provided under a licensing contract with the Broadcasting Authority of Ireland (BAI) by Today FM and Newstalk. Non-national/local radio services are also provided by other independent broadcasters who have entered into contractual arrangements with the BAI. 11 National broadcasting radio transmission services are included in the market, whereas local and regional radio is not included, as it is considered competitive and therefore is not regulated. 12 Transmission and distribution services supplied on this market through towers/masts and relevant associated facilities enable: a) the broadcast of national analogue terrestrial radio signals to end users and b) the broadcast by a multiplex operator of its digital terrestrial broadcasting signals to end users. 3 2.3. The three criteria test As the market for broadcasting transmission services is no longer listed in the Recommendation on Relevant Markets13, ComReg carries out the three criteria test14 with regard to both notified markets. 2.3.1. The first criterion: high and non-transitory barriers to entry For the first criterion, ComReg finds that both market A15 and market B16 are subject to high and non-transitory entry barriers, due inter alia to the existence of structural barriers to entry arising from coverage requirements17, the need to develop network infrastructure and high sunk and fixed costs. 2.3.2. The second criterion: no tendency towards effective competition For the second criterion, ComReg explains that the markets are characterised by very high market shares, no countervailing buyer power, high switching costs and limited prospects of potential competition18. Suppliers of alternative broadcasting transmission service platforms are not considered likely to start supplying FTA TV broadcasting transmission services with national or quasi-national coverage to meet Irish downstream DTT broadcasters’ statutory/licence coverage requirements19. 2.3.3. The third criterion: insufficiency of competition law alone For the third criterion, ComReg explains that competition law is limited to ex post investigations which can take considerable time to complete. Addressing a particular 13 2020 Recommendation on Relevant Markets. 14 In accordance with Article 67(1) of the Code and Recital 22 of the Recommendation on Relevant Markets, national regulatory authorities should also analyse markets that are not included in this Recommendation, but that are regulated within the territory of their jurisdiction