Insufficiency of competition law

ICP-ANACOM considers that the developments that will prospectively be reported in the retail market, particularly with the reduction of barriers to entry and the increase in the competitive dynamics (especially regarding higher-capacity lines and lines supported on Ethernet technology) of the operators with expanding own networks and/or customers of the leased lines wholesale offers of PTC, does not lead to the conclusion Grupo PT will maintain a position of economic strength at retail level which will allow it to act completely independently of its corporate end-customers and of other companies which supply the same types of services.

Autoridade da Concorrência (the Competition Authority) intervened in the context of a public tender for the acquisition of electronic communications services, including leased lines, seeking an opinion from ICP-ANACOM on the alleged existence of anti-competitive clauses in one of the proposals presented to the tender. However, ICP-ANACOM has not received any complaints directly from undertakings acting in the leased lines retail market - with the exception of occasional concerns related to the wholesale offer (in particular the absence of a regulated offer of Ethernet lines and certain SLAs ¹) or related to a lack of capacity, over a certain period of time, on the CAM links - and has not therefore intervened in this market since the previous analysis, with the exception of the analysis conducted in respect of the tender mentioned above, whereby it was concluded that there was no evidence of anticompetitive practice and behaviour by Grupo PT.

Taking into account the analysis now being carried out and given the information available, this Authority considers that the absence of market intervention justifies the non-imposition of ex ante regulatory obligations in the retail market, since the existence of a regulated wholesale offer reduces the opportunity for possible anti-competitive behaviour. Competition law is sufficient to resolve such situations that may occur, mainly with regard to the market conditions of negotiation and the offer of aggregated electronic communication services and communications services supported over leased lines to business customers ².

It is therefore concluded that the absence of complaints or disputes shows that competition law is sufficient to resolve any problems that may occur in the leased lines retail market, whereby the third criterion is also unsatisfied. Nevertheless, in defining the obligations associated with the wholesale markets, ICP-ANACOM will seek to ensure safeguards against situations of illegitimate leverage in retail markets and anti-competitive practices in these markets, particularly with regard to margin squeeze, and will cooperate actively with Autoridade da Concorrência (the Competition Authority) in any proceedings related to the markets that will no longer be subject to ex ante regulation.

 
¹ Service Level Agreement - Service Level Agreement, establishing quality objectives and compensation for non-compliance.
² ICP-ANACOM intervened in related wholesale markets by imposing obligations ex ante.