BEREC Opinion on Phase II investigation pursuant to Article 33 of Directive (EU) 2018/1972: Cases PL/2022/2370-2371 Market 3a/2014 and Market 3b/2014 – update of WACC parameters in Poland

Document number: BoR (22) 108

Document date: 29-06-2022

Date of registration: 29-06-2022

Document type:
Author: BEREC

On 29 April 2022 and 2 May 2022, respectively, the Commission registered two notifications from the Polish national regulatory authority (NRA), Urząd Komunikacji Elektronicznej (UKE), concerning the update of the Weighted Average Cost of Capital (WACC) parameters for regulated products and services related to the market for wholesale local access provided at a fixed location and for wholesale central access provided at a fixed location for mass-market product market in Poland.

Each year, UKE issues a decision to set the value of the WACC, which it uses to set regulated rates. The currently notified Decision 1 (PL/2022/2370) is a re-notification of the previously notified measure, and Decision 2 (PL/2022/2371) is a new notification of WACC applicable as of 2023. Both draft measures calculate the WACC for the copper and fibre infrastructure of Orange Polska S.A. (OPL), the operator designated as having significant market power (SMP) on the markets for wholesale local access provided at a fixed location and for wholesale central access provided at a fixed location for the mass-market product market.

The determination of the WACC for regulated products and services related to both markets in Poland was previously notified to and assessed by the Commission in case PL/2021/2314. In this case, UKE notified the update of the WACC for OPL's copper and fibre-based infrastructure.

In its notifications and response to the RFI, UKE states that, under the provisions of the Polish law, a decision defining WACC is not a measure subject to consultation proceedings, such as a decision on the imposition/maintenance/change/withdrawal of regulatory obligations. For these reasons, UKE claims that the currently notified Decision 1 (PL/2022/2370) and Decision 2 (PL/2022/2371) have not been subject to national consultation proceedings.

The Commission has examined the notifications and the additional information provided by the NRA and considers that the notified draft measures affect trade between the Member States and fall within the scope of Article 33(1) of the Code.

The Commission has serious doubts as to the compatibility of the notified draft measures with Union law for the following reason: Non-compliance with Article 23 of the Code in connection with the Article 32(3) of the Code.

Based on the analysis set out in this Opinion, BEREC considers that the Commission's serious doubts are justified.