The retail market (''of the minimum set of leased lines'' 1) is no longer included in the list of markets susceptible to ex ante regulation in the Recommendation. However, according to the same EC Recommendation, a given market can be defined as relevant if the "three criteria" test is met.
In this section, an analysis is made as to whether the retail market for leased lines, as defined above, meets the "three criteria" test and is, as such, to be regarded as a relevant market for the purposes of ex ante regulation.
The three criteria are cumulative and, therefore, must be applied in conjunction. According to the Recommendation, "In order to identify markets that are susceptible to ex ante regulation, it is appropriate to apply the following cumulative criteria. The first criterion is the presence of high and non-transitory barriers to entry. These may be of a structural, legal or regulatory nature. However, given the dynamic character and functioning of electronic communications markets, possibilities to overcome barriers to entry within the relevant time horizon should also be taken into consideration when carrying out a prospective analysis to identify the relevant markets for possible ex ante regulation. Therefore the second criterion admits only those markets whose structure does not tend towards effective competition within the relevant time horizon. The application of this criterion involves examining the state of competition behind the barriers to entry. The third criterion is that application of competition law alone would not adequately address the market failure(s) concerned.".
If a criterion is not fulfilled, then it can be concluded from the outset, that the market concerned is not a relevant market susceptible to ex ante regulation 2.