BoR PC02 (14) 02 WIND contribution for the Public consultation on Draft BEREC report: “Monitoring quality of Internet access services in the context of net neutrality” WIND Telecomunicazioni S.p.A. - Società con azionista unico Reg. Imp.: 05410741002 di Roma 1 Direzione e coordinamento di WIND TELECOM S.p.A. C.F.: 05410741002 - Partita IVA: 05410741002 Sede legale: Via Cesare Giulio Viola 48 - 00148 Roma R.E.A. di Roma: 884361 - R.E.A. di Milano: 1564660 Sede secondaria: Via Lorenteggio 257 - 20152 Milano Cap. sociale euro 147.100.000,00 i.v. Company Description Wind welcomes the European Commission request of inputs in view of the stakeholder’s workshop on the Review of Relevant Markets and is open to give full support to the Institution, giving its point of view as leading Italian Alternative Operator present in the market since the Italian telecommunication market liberalization. In this respect, Wind’s input includes an overall consideration about the ongoing relevant market review, in particular with suggestions about those elements that are essential for an effective infrastructure-based competition. At the same time, this document highlights those elements that may have negative impacts on the market. Therefore, Wind invites the European Commission to take into account both elements, in order to evaluate their inclusion in the forthcoming Recommendation, that in Wind’s point of view are essential to foster and maintain an effective competition on the telecommunication market. Contact person: For any question related to this document, please contact Diego Padovan at [email protected] WIND Telecomunicazioni S.p.A. - Società con azionista unico Reg. Imp.: 05410741002 di Roma 2 Direzione e coordinamento di WIND TELECOM S.p.A. C.F.: 05410741002 - Partita IVA: 05410741002 Sede legale: Via Cesare Giulio Viola 48 - 00148 Roma R.E.A. di Roma: 884361 - R.E.A. di Milano: 1564660 Sede secondaria: Via Lorenteggio 257 - 20152 Milano Cap. sociale euro 147.100.000,00 i.v. Company Description ....................................................................... 2 Introduction ....................................................................................... 4 General Remarks.............................................................................. 4 Specific Comments ........................................................................... 6 WIND Telecomunicazioni S.p.A. - Società con azionista unico Reg. Imp.: 05410741002 di Roma 3 Direzione e coordinamento di WIND TELECOM S.p.A. C.F.: 05410741002 - Partita IVA: 05410741002 Sede legale: Via Cesare Giulio Viola 48 - 00148 Roma R.E.A. di Roma: 884361 - R.E.A. di Milano: 1564660 Sede secondaria: Via Lorenteggio 257 - 20152 Milano Cap. sociale euro 147.100.000,00 i.v. Introduction Wind Telecomunicazioni S.p.A. (“Wind”) is the largest Alternative operator in Italy offering fixed and mobile telecommunication services, in particular the third Italian mobile operator, with over 22.3 million customers and continues to be the leading alternative operator on the Italian fixed market with 3 million voice customers(of which 2.2mln are broadband customers). Wind welcomes this public consultation in order to forward its view on monitoring systems for quality of Internet access services in the scope of Net Neutrality, considering BEREC as the leading institution to enhance consistency in the application and enforcement of the Regulatory Framework in EU countries. Wind, with more than 15 years of experience on fixed and mobile telecommunication market, submits this input with the aim to highlight clearly and directly those elements that are necessary to foster competition from an alternative operator’s point of view and appreciates the continue effort made by BEREC to involve all stakeholders with public consultation processes. General Remarks First of all Wind considers of outmost importance that BEREC clearly recognize that, on top of the criteria outlined in its document, on every well-proportioned assessment on quality of internet access service the reference to fixed and to mobile networks cannot be the same. For fixed networks, it is a key point to understand that the Quality of Service offered by operators (especially for an alternative operator, which access is on the incumbent’s network) strongly depends on many factors [OMISSIS], which varies country by country across EU. For what concern mobile networks, it is a key point to understand that in practice it is not applicable a minimum quality of service level, since the mobile access is shared among customers in mobility. In general Wind believes that a consistent application of the transparency principle can guarantee a fair development of the market so NRAs have already the power to intervene if an ISP constantly disregards the terms and conditions set in contracts with its customers [OMISSIS]. Wind firmly believes that competition is one of the strongest tools to grant the “network freedom”1 principle for all costumers, [OMISSIS], indeed the era of internet 1 Quoting the Wind’s answer to the BEREC’s public consultation on guidelines on Net Neutrality and Transparency, "it seems that the “network neutrality” principle is confused with the “network freedom” principle. In our opinion, following the “network freedom” principle, any European citizen should be free to access any information on the WIND Telecomunicazioni S.p.A. - Società con azionista unico Reg. Imp.: 05410741002 di Roma 4 Direzione e coordinamento di WIND TELECOM S.p.A. C.F.: 05410741002 - Partita IVA: 05410741002 Sede legale: Via Cesare Giulio Viola 48 - 00148 Roma R.E.A. di Roma: 884361 - R.E.A. di Milano: 1564660 Sede secondaria: Via Lorenteggio 257 - 20152 Milano Cap. sociale euro 147.100.000,00 i.v. actuated a substantial change of paradigm in the service and communication eco-system, new markets of contents and applications have developed [OMISSIS], increasingly their significant (market power) size. Therefore it is unfortunately noticeable that even in this BEREC’s report, the issue of monitoring quality in the scope of Net Neutrality is in practice managed only from the ISP “side” of the market, minimizing the Service/Application Providers role that may have on quality delivered to end users. In this respect, Wind recalls the need to include in this report the possibility to include a sector inquiry on content/application provider [OMISSIS] in order to assess the role that this players have on the net neutrality and the quality of service over the internet. [OMISSIS] Considering that, Wind believes that NRA should allow ISP [OMISSIS] to preserve end- users access by unmanaged band-hungry contents, applications and services. [OMISSIS]. In this view, it is noticeable the analysis made by AGCom on the internet value chain within the sector inquiry over internet services and online advertising2. Figure 1. Focus - Main operators in internet value chain – Worldwide market shares (*) (2012), Source: Agcom evaluation on comScore, NetMarketShare, StatCounter, eMarketer The Figure 1 offers a brief description of the main operators’ market position (and their respective platforms) along different segments of the Internet value chain that allows an analysis of their strategies (the s.c. platform envelopment). Internet, with no discrimination from the ISP/Network Operator (NO) based on the nature of that information.”. Available at the following link: http://berec.europa.eu/doc/net/wind.pdf 2 Delibera n. 19/14/CONS - INDAGINE CONOSCITIVA SUL SETTORE DEI SERVIZI INTERNET E SULLA PUBBLICITÀ ONLINE WIND Telecomunicazioni S.p.A. - Società con azionista unico Reg. Imp.: 05410741002 di Roma 5 Direzione e coordinamento di WIND TELECOM S.p.A. C.F.: 05410741002 - Partita IVA: 05410741002 Sede legale: Via Cesare Giulio Viola 48 - 00148 Roma R.E.A. di Roma: 884361 - R.E.A. di Milano: 1564660 Sede secondaria: Via Lorenteggio 257 - 20152 Milano Cap. sociale euro 147.100.000,00 i.v. AGCom states that given the interdependence between these markets, it is necessary to refer to the concept of platform envelopment, that is the strategy adopted by platforms owners which, using the same inputs, offer different services operating on separate markets but having a customer base that in a good extent overlaps itself amongst these markets. In such a context, platform operators can therefore leverage their customer base “power” to enter into other markets, for example offering a bundle of products/services including of specific platform functions. AGCom therefore underlines in its conclusions that platform operators/provider can apply such a strategy, based both on the economies of variety and scale, so as to displace operators in related markets and quickly capture market share. Moreover the analysis of the competitive structure showed a tendency toward a high concentration of the industry, that is almost a monopolization (winner takes all) resulting in a deterioration of competitive conditions due to the existence of strong network externalities, namely direct (e.g., social networks), indirect (e.g., operating system and applications) and cross (search) network externalities, which brings end-users to select wider network platforms, encouraging, therefore , the emergence of a (or a few) platform. These network effects are even strengthen by the presence of large multi-homing and switching cost (i.e., operating systems) which have a great lock-in effect for end-users that are not able to use other than a specific platform. Finally, Wind believes that BEREC should clearly exclude