TKK puts draft decision on wholesale broadband market out for consultation: Telekom Austria deemed an SMP operators

Press release dated 16 November 2005

In its meeting on November 14, 2001, the Telekom-Control Commission decided to launch a consultation on the draft measures concerning the identification of significant market power on the wholesale market for broadband services. "After a detailed and extensive economic analysis, the Telekom-Control Commission has found competition deficits on the wholesale market for broadband services and identified Telekom Austria as a significant market power operator,“ comments Georg Serentschy, the managing director of RTR's Telecommunications Division, on the regulatory authority's draft measures. "Generally speaking, the competition deficits on the wholesale market include the existence of barriers to market entry for Telekom Austria's competitors, possibly inappropriate pricing behavior and Telekom Austria's ability to transfer its significant market power into neighboring markets – such as the retail market for broadband Internet access."

Regulatory authority orders

The analysis for the purpose of identifying significant market power includes, among other things, the parameters of market share, a comprehensive access network which is difficult to replicate, market access, product differentiation and pricing behavior. The measures proposed by the regulatory authority to remedy the potential competition deficits include an obligation to provide competitors with non-discriminating access to wholesale broadband services as well as regulations on the fees to be charged for these services. Moreover, within two months after the decision becomes legally binding, Telekom Austria will have to present a non-discriminatory standard offer which goes beyond its current ISPA wholesale in several areas. As recently demanded by the industry, this will enable alternative providers to offer "naked DSL," that is, Internet access without an activated fixed-link connection from Telekom Austria.

"The regulatory authority's intentions in drawing up this draft were to create the conditions necessary for more sustainable competition and to promote positive developments on the retail market,“ explains Georg Serentschy.

The consultation period will last until December 14, 2005. The regulatory authority expects to make a final decision in January 2006, after a full review of the comments submitted by market participants, interested parties and the European Commission.