The European Commission has expressed serious doubts over draft measure notified by the Austrian telecoms regulator (RTR) on the wholesale market for terminating segments of leased lines – the final part of the network. Leased lines are dedicated connections (private circuits) for transmission of voice and data used by operators to deliver telecommunications services, usually used by businesses to connect geographically distant offices. Under RTR’s proposal, high bandwidths of leased lines, including those provided so far under competitive conditions in municipalities such as Vienna, Linz, Graz, Salzburg, Innsbruck, Wels, Feldkirch, Steyr, Klagenfurt, Dornbirn, Bregenz and Hallein should be regulated from July 2013. This concerns in particular high bandwidth leased lines (above 34 mbit/second) provided by incumbent A1 Austria Telekom.
European Commission Vice President Neelie Kroes said: “EU businesses should be able to enjoy the best offers in a competitive environment. I urge RTR to come up with a new proposal that ensures a level playing field for all operators “.
The Commission underlines that competition seems to be more sustained in the high bandwidth segment of this market where there are alternative operators present and where the incumbent A1 Austria Telekom appears to have negligible market share (less than 15%) and where the market is characterised by the presence of alternative operators. Reintroducing regulation after a number of years in which wholesale leased lines have been bought at competitive conditions could seriously damage the business plans of alternative operators who would then be forced to offer more attractive access conditions to compete with the regulated services of the incumbent.
RTR now has two months to work with the Commission and the body of European telecoms regulators (BEREC) on a solution to this case. In the meantime implementation of the proposal is suspended.
“Article 7” of the Telecoms Framework Directive requires national telecoms regulators to notify the Commission, BEREC (the Body of European Regulators for Electronic Communications) and telecoms regulators in other EU countries, of measures that they plan to introduce to address the lack of effective competition in the markets in question.
The new rules enable the Commission to adopt further harmonisation measures in the form of recommendations or (binding) decisions if divergences in the regulatory approaches of national regulators, including remedies, persist across the EU in the longer term.