The EC has launched an in-depth investigation into Commission for Communications Regulation (ComReg)’s analysis of the retail markets for fixed telephony services and the corresponding wholesale markets in Ireland.
The development follows ComReg’s notification of a draft decision to the EC last month concerning its analysis of the Retail Fixed Telephony Service (‘RFTS’) and wholesale Fixed Access and Call Origination (‘FACO’) markets. In confirming the decision, the EC said it had ‘serious doubts regarding the definition of the product and geographic markets for wholesale fixed access and call origination services’. Further, the Commission also noted that it had had doubts on ComReg’s finding that these markets require regulation and that fixed line incumbent eir has significant market power (SMP). Specifically, the EC said it believes that the regulator has underestimated the competitive constraints limiting the carrier’s potential to behave independently of competitors and end users, and as such has proposed to impose regulation ‘which is not sufficiently proportionate and forward-looking’.
In the notified measure, ComReg had proposed lifting regulation imposed on eir which obliged it not to charge excessive prices in the retail market for fixed voice telephony services. It also proposed to partially lift regulation obliging the operator to provide access to its network to alternative operators from the wholesale ‘legacy’ fixed access and call origination services. Meanwhile, the industry watchdog proposed re-imposing wholesale access obligations on eir in certain narrow sub-urban and rural regional areas, covering around one third of Ireland’s homes and businesses. However, according to the EC, within that area about two thirds of premises already have the possibility to be served through wholesale services provided by alternative operators. Further, eir had offered voluntary commitments to provide access to alternative operators under different conditions than those proposed by ComReg. In this context, the EC has suggested that the regulator should have applied Article 79 of the European Electronic Communications Code (EECC), allowing national regulatory authorities to assess operators’ voluntary commitments and make them binding. For its part, ComReg has argued that it could not apply Article 79 of the EECC because there is no statutory basis in Irish law to accept commitments and make them binding, while noting that the Code has not yet been transposed into Irish law. Moreover, the watchdog also considered eir’s voluntary commitments insufficient to address its competitive concerns.
With the EC having now initiated an in-depth investigation ‘to verify the appropriateness of the market definition and the corresponding SMP finding proposed by ComReg’, it has two months to discuss the draft measure with the Irish regulator, and will do so in close cooperation with the Body of European regulators (BEREC). At the end of the Phase II investigation period, the Commission may either lift its reservations or issue a veto decision under Article 32 of the EECC.