Broadband markets

ICP-ANACOM adopted, by determination of 26 June 2008 ¹, for public consultation for a period of 30 working days, the draft decision on the definition of product markets and geographic markets, evaluation of significant market power (SMP) and imposition, maintenance, amendment or withdrawal of regulatory obligations in relation to the market for the supply of wholesale network infrastructure access (physical) at a fixed location (market 4 of Recommendation 2007/879/EC) and the market for the supply of wholesale broadband access (market of the same Recommendation 5).

On 7 August 2008, AdC - Autoridade da Concorrência (The Competition Authority) sent its opinion on the draft decision (DD) in question, pursuant to article 61 of the LEC, stating agreement with its content and considering that the analysis conducted was appropriate and generally consistent with the application of the methodology of competition law and that the definition of geographic markets was deemed appropriate to the identification of heterogeneous competitive conditions.

After considering the analysis conducted of the responses received in public consultation, by determination of 4 December 2008, approval was given to the respective report and to the new draft decision on markets 4 and 5 for notification to the EC and the national regulatory authorities (NRAs) of the other Member States pursuant to paragraph 1 of article 57 of the LEC.

The EC gave a favourable opinion on the draft decision, subject to some comments, citing reservations on the inclusion of coaxial cable in the definition of the markets and urging ICP-ANACOM to consider the application of regulatory measures in the context of NGA.

The final version of the analysis in question was subsequently approved by determination of the Board of Directors of ICP-ANACOM of 14 January 2009.

Following the analysis of the wholesale markets for broadband, ICP-ANACOM reached the following conclusions, with respect to the market for the supply of wholesale network infrastructure access (physical) at a fixed location (market 4):

• For the purposes of ex-ante regulation and in accordance with the principles of competition law, the market for the supply of wholesale network infrastructure access (physical) at a fixed location was identified as relevant, covering the entirety of the national territory;
  
  
• Grupo PT was designated as holding SMP in this market under identical terms as in the previous analysis of the market, whereby the following obligations were imposed: access to and use of specific network resources, transparency in the publication of information, including the publication of reference offers, non-discrimination in the provision of access and the respective provision of information, separation of accounts for specific activities related to access, control of prices and cost accounting and financial reporting.
  
  With respect to the market for the supply of wholesale broadband access (market 5), the main conclusions of the analysis are:
  
  
• The existence of distinct competitive conditions justify the definition of two separate geographic markets:
  
  
  • Market for the supply of wholesale broadband access in "areas C" (deemed competitive) - market for the supply of wholesale broadband access encompassing the areas covered by exchange areas where there is at least one co-installed operator and where there is at least one cable distribution network operator and where the percentage of homes cabled by the main operator in the exchange area exceeds 60 percent;
    
    
  • Market for the supply of wholesale broadband access in "areas NC" (deemed as non-competitive) - market for the supply of wholesale broadband access in other exchange areas of the national territory.
    
    
• The identification of Grupo PT as holding SMP in the market for the supply of wholesale broadband access in "areas NC", whereby the following obligations were imposed: access to and use of specific network resources, transparency in the publication of information, including the publication of reference offers, non-discrimination in the provision of access and interconnection and in the respective provision of information, separation of accounts for specific activities related to access and/or interconnection, control of prices and cost accounting and financial reporting;
  
  
• The removal of the obligations previously imposed on Grupo PT in the market for the supply of wholesale broadband access in "areas C", comprising about 61 percent of all broadband access;
  
  
• The definition of a transitional period of one year during which certain obligations of Grupo PT will remain in force in the market for supply of wholesale broadband access in "areas C", taking into account the need to ensure a gradual transition which provides for the protection of end-users and operators who invested in the market and may require a period of time to adjust their offers, their objectives and their strategies to the new regulation.
  
  It should be noted that in the case of both markets, provision was made for the possibility of specific obligations for fibre optic based access.

Figure 1. Location of exchange areas designated as ''areas C''

(Click to enlarge image)