Brussels, 26 April 2012 - The European Commission has decided to further investigate whether the Polish telecoms regulator, UKE, should allow the incumbent Polish telecoms operator, Telekomunikacja Polska (TP) to give alternative operators only limited access to its future fibre based networks so they can also offer high-speed Internet. The Commission has serious doubts whether UKE's decision not to impose cost-oriented prices for access to these networks contravenes EU telecoms rules. In the Commission's view, UKE's decision could have a negative effect on competition and the future development of fibre networks. Conditions for access to TP's fibre network will determine whether, and at what price, alternative operators, including those established in other Member States, will be able to provide telecoms services to Polish consumers. The Commission has therefore suspended UKE's plans and started a 3 month investigation.
Neelie Kroes, European Commission Vice President, said: "We need to avoid fibre-based broadband monopolies. This investigation will examine whether the right balance exists between investment incentives and protection of a level playing field in Poland."
UKE proposes not to regulate the prices which TP will charge to alternative operators pay to access its fibre-to-the-home (FTTH) network, because it wants to encourage the main operator to roll out such networks in Poland. Under the Commission's Recommendation on Next Generation Access Networks (see MEMO/10/424), a telecom regulator can exceptionally decide not to regulate the price of access to the network of dominant operator(s) if it can show that alternative operators can get such access on competitive terms, which is likely to result in effective retail competition. Such competitive terms may be ensured, for example, by functional separation or similar arrangements guaranteeing no favourable treatment to the retail arm of the incumbent as opposed to the alternative operators.
The Commission has issued this serious doubts letter because it needs further proof from UKE that the proposed "non-discrimination" remedies are indeed sufficient to ensure equivalence of access to TP's fibre-to-the-home network, and hence to justify the non imposition of cost orientation access prices.
The Commission's decision to start an in-depth investigation begins a "second phase" procedure under Article 7a of the EU Telecoms Directive (MEMO11/321). UKE now has three months to work with the Commission and the body of European telecoms regulators (BEREC) on a solution to this case and meanwhile implementation of UKE's proposal is suspended.
On 26 March 2012 the Commission received a draft decision from UKE concerning the market for wholesale broadband access, which is a key access product for alternative operators to provide broadband Internet access to Polish customers. According to UKE's assessment, TP has significant market power and thereby it has the ability to act independently of its competitors and consumers. UKE proposed only limited regulatory obligations with regard to access to TP's fibre-to-the-home network, in particular no price control was imposed. The Commission considers that in principle National Regulatory Authorities (NRAs) should in such circumstances mandate access to the network of SMP operator based on cost oriented prices. Such price controls might not be necessary in very exceptional cases where functional separation or other forms of separation have proved effectively to guarantee equivalence of access (i.e. that no favourable treatment is granted to the retail arm of the incumbent compared to the alternative operators). The Commission considers that the measures proposed by UKE are insufficient to ensure equivalent access to FTTH infrastructure and therefore cannot justify the departure from the principle of cost oriented access.
The EU telecoms 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.
The Commission's letter sent to the Polish regulator will be published at:
Neelie Kroes' website
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Linda Cain (+32 2 299 90 19)