The Recommendation on relevant markets was last reviewed in 2014. Under the European Electronic Communications Code (EECC), the European Commission must adopt a new revised Recommendation by 31 December 2020. The Commission published a draft Recommendation in August 2020 and BEREC has now published an Opinion on the Commission’s draft.

In its draft Recommendation on relevant markets, the Commission is proposing to remove the termination markets, i.e. the markets for wholesale call termination on individual public telephone networks provided at a fixed location (market 1) and wholesale voice call termination on individual mobile networks (market 2) of the 2014 Recommendation, because it does not consider that these markets continue to fulfil the three criteria test at EU level, and Article 75 of the EECC, which comes into force in December 2020, will limit the ability of mobile and fixed operators to set excessive termination rates.

BEREC says in it is Opinion that it is not opposed to the removal of termination markets 1&2/2014 from the relevant markets. However, it is concerned about the possible implications of their removal and is therefore asking for explicit acknowledgement in the Recommendation’s text that, in certain situations, many national regulatory authorities (NRAs) may continue to apply Significant Market Power (SMP) regulation in the termination markets. BEREC notes the Commission’s acknowledgement that NRAs can address non-price related issues through Article 61 of the EECC and asks the Commission to highlight the importance of this issue and to ensure regulatory certainty by specifying in the Recommendation’s text that addressing relevant competition issues in the termination markets could be one of the justifications for applying Article 61(2) EECC.

BEREC agrees with the Commission that the wholesale local access provided at a fixed location market (market 1/2020) should be maintained. BEREC also agrees with the Commission that geographical analysis is needed, as it can lead to more targeted regulation of this wholesale market. BEREC highlights the need for case-by-case analysis in relation to the substitution between local and central wholesale access, and notes that there is no general trend for national cable footprints.

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

BEREC agrees with the EC that the wholesale dedicated capacity market (Market 2/2020) should be maintained in the list of relevant markets. Among other issues, BEREC also considers that business-grade bitstream services may be part of the product market and suggests maintaining 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.

As for the potential new market for wholesale access to physical infrastructure, BEREC agrees on the approach taken by the Commission and welcomes the detailed guidance provided in the Draft Explanatory Note. BEREC says that it will be useful for those NRAs considering, now or in the future, whether this market should be regulated separately. To read BEREC’s summary of its Opinion in full and for a link to the full Opinion, click here.