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Draft BEREC Report on Access to physical infrastructure in the context of market analyses BoR (18) 228

Starting: 13 Dec Ending

0 days left (ends 23 Jan)

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During its 37th plenary meeting (5-7 December 2018, Prague) the Board of Regulators has approved the draft BEREC Report on access to physical infrastructure in market analyses  (BoR (18) 228) for public consultation.

The EU needs significant investment in next generation access (NGA) networks that are capable of supporting a wide range of services in order to meet the needs of end-users (both residential and business consumers). Physical infrastructure (such as ducts and poles used to deploy networks) represents a significant proportion of the investment in NGA networks. Civil engineering works are lengthy and costly processes, for instance due to the need to gather the necessary permissions and the intensive use of human resources, among other issues. Moreover, replicating existing physical infrastructure is sometimes not technically feasible and, in many cases, not economically profitable. Measures aimed at facilitating greater use of existing physical infrastructure can reduce the civil engineering works required to deploy new networks, significantly lowering costs.

In this context, most NRAs in the EEA currently regulate access to physical infrastructure in the market for wholesale local access provided at a fixed location (market 3a). Some NRAs also regulate access to physical infrastructure in market 3b or market 4.  BEREC has not previously studied how NRAs have chosen to precisely address access to physical infrastructure in their market analyses. Therefore, following a questionnaire completed by NRAs, this report depicts the different approaches taken regarding the regulation of access to physical infrastructure.

The public consultation will run from 12 December 2018 to 23 January 2019 (17:00 CET)

Enquiries about the consultation, including registration problems with the online platform, should be sent to the following email address: PC_Physical_Infrastructure@berec.europa.eu

Further info



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In the context of a potential deregulation of market 3a, the symmetric regulation provided for in the BCRD could mitigate the aforementioned risks. Notably, the BCRD requires “fair and reasonable treatment” when providing access to physical infrastructure, which for example would constrain the prices offered by the incumbent. However, the concept of “fair and reasonable treatment” is very broad and could be interpreted quite widely between Member States. Furthermore the BCRD is not very prescriptive on potential approaches with regard to access to physical infrastructure. For instance, some NRAs impose obligations on the SMP operator with the aim of making the request for access as easy as possible for alternative operators in order to ensure non-discriminatory access to the physical infrastructure.

Given the context of symmetric regulation, the BCRDis not made to deal with problems linked to the vertical integration of incumbent fixed operators, which are both managers of physical infrastructure and electronic communications operators.

Indeed, in the absence of asymmetric regulation, the incumbent operator may implement practices aimed at discriminating against its competitors by developing cross-subsidy mechanisms between its physical infrastructure and its activities of electronic communications, i.e. the incumbent could notably increase its access price and use the revenue to decrease its retail price, driving competitors out of the retail market. It could also make the process of requesting access very burdensome, de facto increasing its access price for alternative operators.

While in theory the magnitude of such practices would be constrained by the “fair and reasonable treatment” required by the BCRD, they could in practice be difficult to detect and to sanction by the competition authority, given the variety of offers marketed in retail markets and the complexity of the cost structure of electronic communications operators. Obligations of accounting separation and accounting for the costs imposed in the framework of ex ante asymmetric regulation would normally deal with this issue.

Moreover, as the Commission also highlighted in its comments letter on cases CZ/2018/2067-9 (review of markets 3 and 4 in the Czech Republic[55]) (i) the determination of the access prices via dispute resolution (as foreseen under the BCRD) may not be appropriate in cases where SMP has been found, as it may unnecessarily prolong the time necessary for access seekers to have access to the physical infrastructure; (ii) it is typically insufficient to subject an operator that has SMP, and which can thus act independently of its customers and consumers, to the same set of minimum standards that apply to all operators under the BCRD; (iii) the Commission Recommendation on consistent non-discrimination obligations and costing methodologies to promote competition and enhance the broadband investment environment provides for the application of a full-fledged BULRIC+ cost model to physical infrastructure, which may yield different results from those that would apply if wholesale prices are set in the context of dispute resolution proceedings.

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Abbreviations for countries

Abbreviations for NRAs



[1]The markets are numbered according to the Recommendation 2014/710/EU (“Recommendation on relevant markets”). Market 3b is the market for wholesale central access provided at a fixed location for mass-market products and market 4 is the market for wholesale high-quality access provided at a fixed location.
[2]Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive). See: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32002L0021&from=en.
[3]Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive). See: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32002L0019&from=EN.
[4]Commission Recommendation no. 2010/572/EU on regulated access to Next Generation Access Networks (NGA). See: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32010H0572&from=EN.
[5]Commission Recommendation no. 2013/466/EU on consistent non-discrimination obligations and costing methodologies to promote competition and enhance the broadband investment environment. See: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32013H0466&from=EN.
[6]BEREC’s Common Position on Best Practice in remedies on the market for wholesale (physical) network infrastructure access (including shared or fully unbundled access) at a fixed location imposed as a consequence of a position of SMP in the relevant market.
See: https://berec.europa.eu/eng/document_register/subject_matter/berec/download/0/1127-revised-berec-common-position-on-best-pr_0.pdf.
[7]See: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52013XC0126(01)&from=EN.
[8]EU Directive no. 2014/61/EU on measures to reduce the cost of deploying high-speed electronic communications networks.
See: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32014L0061&from=FR.
[9]The numbering of articles presented here is based on the version of the 3rd October of the EECC; the numbering may have changed since.
[10]Market for physical access to infrastructure in the core network, defined by the NRA in Liechtenstein.
[11]Access to chambers/manholes solely in conjunction with access to ducts.
[12]Fair & Reasonable tariffs (meaning that this allows a margin on top of the costs).
[13]Certification process related to technology or energy.
[14]Only NGN, fibre or coax.
[15]Diameter of cable min. 30 mm.
[16]Fibre only.
[17]Cable and apparatus deployed in the physical infrastructure must comply with published technical and safety specifications.
[18]Under feasibility analysis.
[19]An exception here is Liechtenstein, where vertical separation is in place and therefore the SMP operator is a wholesale-only operator.
[20]At the time when NRAs were filling out the questionnaire, only the proposal (see https://ec.europa.eu/digital-single-market/en/news/proposed-directive-establishing-european-electronic-communications-code) was available.
[21]The EC also commented that duct access obligations should not be limited to the purpose of taking up wholesale products of the SMP operator.
[22]According to this provision of the EECC, access to civil engineering may be imposed as a remedy “irrespective of whether the assets that are affected by the obligation are part of the relevant market in accordance with the market analysis, provided that the obligation is necessary and proportionate […]”.
[23]Note that in some member states the relationship between Market 3a and 4 is more complex.
[24]Examples for usage restrictions are restrictions to use access to physical infrastructure only for fixed (broadband) services or only as backhaul in case of sub-loop unbundling.
[25]BEREC Work Programme 2018 - BoR (17) 238. See:
[26]See paragraph 32 of the 2018 SMP Guidelines
[27]In this context it might also be assessed whether physical infrastructure of telecommunications operators other than the incumbent operator (e.g. cable network operators) can be considered a substitute for the infrastructure of the incumbent. This assessment could also be undertaken at the SMP analysis stage, as noted below.
[28]It should be acknowledged that in some cases it may be difficult for NRAs to gather the necessary information from these players to perform a full market analysis, as such entities are normally not providers of electronic communications services.
[29]NRAs may have to resort to identifying smaller geographic areas in the event that the physical infrastructure of the incumbent operator is not available nationally, but only in some selected areas of the territory (e.g. in large cities).
[30]These cumulative three criteria are: (1) the presence of high and non-transitory structural, legal or regulatory barriers to entry; (2) a market structure which does not tend towards effective competition within the relevant time horizon, having regard to the state of infrastructure-based and other competition behind the barriers to entry; (3) competition law alone is insufficient to adequately address the identified market failure(s).
[31]Access to dark fibre only if access to physical infrastructure cannot be granted due to technical reasons.
[32]Only in situations where access to physical infrastructure is not available and dark fibre is reasonably available (i.e. dark fibre capacity already exists).
[33]In the process of adoption (in May 2018).
[34]In the Netherlands dark fibre was considered in the FttO (fibre to the office) market analysis. The FttO market was considredconsidered as being competitive (no remedies).
[35]Ofcom considered dark fibre in the market definition and the SMP assessment of market 4. Dark fibre was also imposed as a remedy, but this was repealed after a successful appeal of the market definition.
[36]Obligation to ensure that prices are not excessive.
[37]Certification process related to technology or energy.
[38]Joints in case of dark fibre acquisition.
[39]Most of the topics highlighted below might be considered irrespective of whether physical infrastructure is deemed (i) a segment or sub-market of an already identified relevant market for the purpose of ex ante regulation (such as e.g. a sub-market within market 3a); or (ii) a wholly independent relevant market, outside the scope of the Commission Recommendation on Relevant Markets. ThisHowever, this is not the case with regard to whether the three criteria test is fulfilled, which is an issue that would only have to be addressed in the event that physical infrastructure is defined as a new, separate relevant market.
[40]Commission Notice on the definition of relevant market for the purpose of Community competition law, 1997 OJEC C372/5. See: https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A31997Y1209%2801%29
[41]2018 OJEU C159/1. Commission Guidelines on market analysis and the assessment of significant market power under the EU regulatory framework for electronic communications networks and services, 2018 OJEU C159/1. See: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52018XC0507%2801%29
[42]Paragraph 25 of the Guidelines.
[43]Paragraph 27 of the Guidelines. As noted in the Guidelines, the difference between potential competition and supply-side substitution lies in the fact that supply-side substitution responds promptly to a price increase, whereas potential entrants may need more time before starting to supply the market. Put in other words, supply-side substitution involves no additional significant costs, whereas potential entry may occur at significant sunk costs.
[44]Paragraph 33 of the Guidelines.
[45]Although such a consideration could be more appropriately dealt with in the remedy design rather than in the market definition.
[46]Decision nº 2017-1347 of 14 December 2017.
[47]IncludingThese constraints include the saturation of some segments of the infrastructure, the existence of dangerous and hazardous conditions for the deployment and maintenance of the network, as well as the need for strict security measures that increase the deployment costs.
[48]Paragraphs 41-42 of the Guidelines.
[49]Paragraph 48 of the Guidelines.
[50]Section 2.5 of the Commission Recommendation on Relevant Markets.
[51]BoR (14) 73 of 5 June 2014.
[52]In the event that was deemed to be the relevant product market.
[53]Some Member States are progressing in the development of the information systems and processes that are needed for processing the information pertaining to the availability of physical infrastructure.
[54]This problem arises when access to physical infrastructure is a remedy to market 3a. It does not necessarily arise when physical infrastructure is integrated in market 3a.
[55]Commission comments letter of 27 April 2018.

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