Digital Agenda – European Commission raises serious doubts over contradictory Polish proposal on broadband market

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The European Commission has expressed serious doubts over plans by the Polish telecoms regulator UKE to deregulate part of the Polish wholesale broadband access market. UKE’s proposal is based on an out-dated market assessment from March 2011. Moreover, the proposal contradicts a more recent market analysis dating from March 2012 where UKE concluded that no single area was competitive enough in Poland to propose complete deregulation. The Commission has therefore suspended UKE’s plans and started a two month in-depth investigation.

Neelie Kroes, European Commission Vice President, said: “Both the regulation and the deregulation of specific markets in specific areas must be based on solid and up to date market evidence. This is essential to ensure that regulators’ decisions, which have significant effects for the operational and investment decisions of both network owners and network access seekers, are based on an objective, proportionate assessment of the needs for effective competition in the broadband market and a level playing field for all operators.”

Wholesale broadband access, which allows alternative operators to use part of a dominant company’s network to provide retail services to end users has recently been subject to frequent regulatory activity by UKE. In 2011, UKE adopted a decision which imposed on telecom company Telekomunikacja Polska (TP) an access obligation across most of Poland, with the exception of 11 geographical areas which UKE considered competitive and did not analyse. In March 2011 the Commission urged UKE to assess these remaining areas and to prove whether such areas should indeed be treated differently. This is the scope of the present notification.

However, in the meantime, UKE announced in March 2012 that there was not enough competition throughout Poland and that TP had significant market power and therefore the broadband market should be regulated, whilst proposing lighter remedies in four communes.

At the end of August 2012 the Commission issued a recommendation consisting of concrete guidelines on conditions to lift price regulation in these areas and asking UKE to conduct a new market analysis. However instead of doing that, UKE notified its draft decision concerning the 11 potentially competitive geographical areas which were excluded from the scope of the market in UKE’s 2011 market review. Therefore, the Commission has initiated a further investigation of UKE’s draft decision as UKE has not explained why it departs from its conclusions reached in March 2012. Here to read more.

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