BEREC adopts its Opinion on the draft EC Recommendations on relevant product and service markets susceptible to ex-ante regulation

16 October 2020

Today, 16 October 2020, the Board of Regulators has adopted the BEREC Opinion on the draft European Commission’s (EC) Recommendation on relevant product and service markets susceptible to ex-ante regulation. As stated in the European Electronic Communications Code (EECC), the EC shall adopt a new revised Recommendation by December 2020. The Commission shall take utmost account of the opinion of BEREC.

In its Opinion, BEREC addresses the removal from the list of termination markets 1&2/2014 and of market 3b/2014, as well as the new markets 1/2020 and 2/2020, the potential new market for wholesale access to physical infrastructure and the transitional issues.

Concerning the termination markets 1&2/2014, BEREC is not opposed to the removal of these markets from the relevant markets. However, concerns remain about the possible implications of this removal. Therefore, BEREC asks for an explicit acknowledgement in the text of the Recommendation of a situation, which could lead many NRAs - due to national circumstances - to continue applying SMP regulation in the termination markets. BEREC recognises and appreciates that the EC acknowledges the possibility for NRAs to also address the non-price related issues through Article 61 of EECC. In this regard, to both highlight the importance of this issue and to ensure regulatory certainty, BEREC asks the EC to specify in the text of the Recommendation itself that addressing relevant competition issues in the termination markets could be one of the justifications for applying Article 61(2) EECC.

As a forward-looking analysis shows that high and non-transitory entry barriers will be observed in the majority of Member States, BEREC agrees with the EC on the importance of maintaining market 1/2020 in the list of relevant markets. BEREC also is with the same opinion with the EC on the need for a geographical analysis, which can lead to more targeted regulation of this wholesale market.  In the document, BEREC highlights the need for a case-by-case analysis regarding the substitution between local and central wholesale access and also notes that there is not a general trend for national cable footprints.

BEREC believes that the EC’s view regarding the Union-wide competitiveness of the wholesale central access (WCA) market (former market 3b/2014) is premature and does not reflect the current and foreseeable future developments in the majority of Member States. BEREC is of the view that a more proportionate regulatory approach would be to engage in a detailed geographic analysis of the WCA market, which, depending on the national circumstances, could lead to a geographic segmentation of markets or remedies and to a regulatory intervention limited to specific sub-national geographic markets where the three criteria test is met.

BEREC agrees with the EC that former market 4/2014, now market 2/2020 should be maintained in the list of relevant markets. Among other issues, BEREC also considers business-grade bitstream services may be part of the product market and suggests to maintain the definition of this market as a “high-quality wholesale access” market. On mobile backhaul, BEREC considers that that there is a need for regulated services in some countries, especially in the light of the expected deployment of 5G networks. BEREC also stresses the need to take into account the specificities of multi-site demand when dealing with both product and geographical market segmentation, when applicable.

Regarding the potential new market for wholesale access to physical infrastructure, BEREC agrees on the approach taken by the EC and welcomes the detailed guidance provided in the Draft Explanatory Note. It will be useful for those NRAs considering, now or in the future, whether this market should be regulated separately.

Finally, BEREC also raises a suggestion concerning the use of geographic surveys of networks in geographic market definitions to align recital 36 in the Draft Recommendation with Article 22 EECC.

BEREC looks forward continuing its collaboration with the EC throughout the review process until the Recommendation finally comes into force.