Notification of the
““Wholesale terminating segments of leased lines
(market No. 6)
National Media and Infocommunications Authority, Hungary
10 November 2011.
EU Commission,
National Regulatory Authorities in other Member States,
10 November 2011.
Dear Madame/Sir,
The National Media and Infocommunications Authority, Hungary (hereinafter NMHH as per the Hungarian abbreviation) makes accessible the draft decision to the Commission and the National Regulatory Authorities in other Member States as follows:
The present notification is about the wholesale market:
“terminating segments of leased lines, irrespective of the technology used to provide leased or dedicated capacity”
This market has been called as susceptible to ex ante regulation in the point 6 of the Annex of the Commission Recommendation of 17.12. 2007 on relevant product and service markets within the electronic communications sector susceptible to ex-ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services, C(2007)5406.
This notification is submitted in line with Article 7 of the Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services.
This notification contains the following titles and electronic files:
ITEM / TITLE / FILE NAME0 / Summary Form of Market 6
(EN, Non-confidential) / summary_form_m6_Hungary.docx
1a / Draft decision of Market 6
(HU, Confidential) / decision_m6_Hungary_conf.docx
1b / Draft decision of Market 6
(HU, Non-confidential) / decision_m6_Hungary_nonconf.docx
2 / Opinion of the National Competition Authority
(HU, Non-confidential) / comp_opinion_m6_Hungary_nonconf.pdf
3 / Opinion of the Operators
(HU, Non-Confidential) / op_opinion_m6_Hungary_nonconf.pdf
This table is also reflecting the language (“HU”/”EN”) and the status of confidentiality (“Confidential”/”Non-confidential”) of the Items.
The Item 0 contains the following:
General Information,
Summary Notification Form
(according to the Annex 1 of the Commission Recommendation of 15 October 2008 on the notification, time limits and consultation provided for in Article 7 of Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services, C(2008)5925.)
The Item 1a and 1b contain the notified draft decision of the President of the Authority in confidential and non-confidential version respectively.
The Item 2 contains the opinion of the National Competition Authority.
The Item 3 contains the written comments of Magyar Telekom Nyrt. in non-confidential version.
According to the Art. 5.3 of the Directive 2002/21/EC, the Item 1a is stated as “confidential”, in Item 1b certain information, qualified as business secret by the operators, are hidden.
The Authority designates the Hungarian language as official language of the notification document, however this file including the Summary Notification Form is provided in English.
Best regards,
Annamária SZALAI, President
GENERAL INFORMATION
1. Relevant legal documents
The adoption of the regulatory framework regulating the electronic communications networks and services is based on the Act C of 2003 on electronic communications (hereinafter Eht.) which entered into force in general on 1st January 2004, however its certain parts entered into force on 1 May 2004 simultaneously with the entry into force of the act on enacting the international treaty on accession of Republic of Hungary to the European Union.
Related to the subject of present notification the modified decree 16/2004. (IV. 24.) on the principles applicable in the course of market definition, market analysis, the designation of operators having significant market power and the determination of their obligations (hereinafter Decree) was published together with the IHM (Ministry on Communications and Informatics) Communication 801/2004 (IHK. 8.) on principles (examination aspects) to be used by the authority (hereinafter Communication). Communication is a legal tool of the state governance falling outside of the scope of laws, publishing facts and data that should be learnt by an organization responsible for executing the law in order to fulfil its tasks. The Communication is extracted translation of the Guidelines, which refers to the appropriate articles of the Eht. instead of the articles of the Directives. Based on point 1. of the Communication, NMHH is obliged to apply points 33-69 and 70-123 thereof.
2. Competent body
The Eht. was amended by the LXXXII. Act of 2010 on amendment of certain laws regulating media and communications, which founded the NMHH. The leading body of the NMHH is the President (hereinafter President). The NMHH is the legal successor of the National Communications Authority which was founded by the Eht.
The NMHH’s tasks and competences on the area of procedure related to market definition, designation of operators having SMP and determination of obligations remained unchanged.
Based on the Art. 10 f) and Art. 52 (1) of the Eht. the tasks and competence of the
President are as follows:
a) definition of relevant electronic communications markets (hereinafter market definition)
b) analysis of competition on the relevant markets and its efficiency, including designation of one or more operators having SMP on each relevant markets (hereinafter SMP designation)
c) specification of the obligations of service providers with SMP, maintaining, amending, withdrawing obligations earlier imposed (hereinafter imposing obligations).
3. Consultation and transparency mechanism (Art. 6. of the FWD)
Based on the Art. 36 of the Eht. NMHH should conciliate with those concerned during the national consultation procedure. The draft of the decision shall be published at least 22 working days before making the decision, together with related preparatory documents with the exception of data qualified as business secret by those concerned. Those concerned may submit their comments within 20 days.
Based on Art. 36 (1) of Eht. NMHH published the draft decision on 20 September 2011, the consultation was closed by 10 October. The comments sent to the published draft decision by one operator are in the Item 3.
The President’s views on the comments are described in the Item 1a and 1b, exactly in the Chapter C of the notified draft decision.
The President herewith states and undertakes that the re-notification of the decision concerning the market under consideration will take place appropriately should any modification affecting the merit of the decision arise in course of the procedure.
4. Cooperation with the National Competition Authority
The Art. 20 (1) of Eht. prescribes that NMHH and the National Competition Authority, namely Gazdasági Versenyhivatal (hereinafter GVH) shall closely cooperate with one another concerning among others in procedures related to the definition of the relevant markets of electronic communications, the analysis of competition in the relevant markets, the designation of service providers having SMP and the prescription of obligations for them.
Based on Art. 20 (2) of Eht. the NMHH shall put the professional opinion of the GVH into focus; it shall inform the GVH about the reasons of deviations if any.
The NMHH consulted the GVH who agrees with the market definition and SMP designation. It provided its opinion within 20 days of the publication of the draft decision according to the Art. 36 of Eht.
The GVH’s opinion is in the Item 2.
The NMHH’s view on the opinions and the details of the cooperation between GVH and the NMHH is described in the Item 1a and 1b, exactly in the Chapter B of the judgement of the notified draft decision.
SUMMARY NOTIFICATION FORM
Section 1
Market definition
1.1 The affected relevant product/service market. Is this market mentioned in the Recommendation on relevant markets?
Wholesale terminating segments of analogue and low capacity (up to and including 2 Mbit/s) digital leased lines
This market is included in the Commission’s Recommendation on relevant markets as market no 6. In Hungary, the President identified the following relevant market:
The President stated that the market of digital leased lines with capacity beyond 2 Mbit/s ceased to be identified as relevant market.
1.2 The affected relevant geographic market
The President of NMHH determined the geographic markets covering the entire territory of Hungary:
National market, territory of Hungary.
1.3 A brief summary of the opinion of the National Competition Authority where provided.
The GVH agrees with the draft decision.
1.4 A brief overview of the results of the public consultation to date on the proposed market definition (for example, how many comments were received, which respondents agreed with the proposed market definition, which respondents disagreed with it)
During the public consultation the NMHH received comments from one operator, Magyar Telekom Nyrt.
Magyar Telekom agreed with the draft decision.
1.5 Where the defined relevant market is different from those listed in the Recommendation on relevant markets, a summary of the main reasons which justified the proposed market definition by reference to Section 2 of the Commission’s Guidelines on the definition of the relevant market and the assessment of significant market power, and the three main criteria mentioned in Recitals (9) to (16) of the Recommendation on relevant markets and Section 3.2 of the accompanying Explanatory Memorandum.
Not applicable
Section 2 Designation of undertakings with SMP
2.1 The name(s) of the undertaking(s) designated as having individually or jointly significant market power. Where applicable, the name(s) of the undertaking(s) which is (are) considered to no longer have significant market power.
The President designated the following undertaking having SMP individually:
Magyar Telekom Nyrt.
There were no undertakings designated as having SMP jointly.
2.2 The criteria relied upon for deciding to designate or not an undertaking as having individually or jointly with others significant market power
The main – decisive – criteria which have been taken into consideration in assessment of the significant market power are:
o market share,
o absence of potential competition,
o overall size of undertaking,
o easy or privileged access to capital markets/financial resources,
o control of infrastructure not easily duplicated,
o vertical integration,
o economy of scale,
o absence of or low countervailing buying power,
however, other criteria also have been evaluated.
2.3 The name of the main undertakings (competitors) present / active in the relevant market
Invitel Tavkozlesi Zrt., GTS Hungary Kft., UPC Magyarorszag Kft., Antenna Hungaria Zrt.
2.4 The market shares of the undertakings mentioned above and the basis of their calculation (e.g., turnover, number of subscribers)
The operators’ market shares are qualified as confidential information.
2.5 The opinion of the national competition authority where provided.
The GVH agrees with the draft decision.
2.6 The results of the public consultation to date on the proposed designation(s) as undertaking(s) having significant market power (e.g., total number of comments received, numbers agreeing/disagreeing)
Magyar Telekom did not raise objection against the designation of undertaking having SMP.
Section 3 Regulatory obligations
3.1 The legal basis for the obligations to be imposed, maintained, amended or withdrawn (Articles 9 to 13 of Directive 2002/19/EC (Access Directive)
The President partly modified obligations already in force on operators those were designated as SMP in the course of previous market analysis.
· Obligation of transparency (Eht. 102. §; Access Directive Art. 9 (2))
Obligation of transparency has been withdrawn for the market of digital leased lines with capacity beyond 2 Mbit/s
· Obligation of non-discrimination (Art 10. of AD, Art. 104. of Eht.);
Obligation of non-discrimination has been withdrawn for the market of digital leased lines with capacity beyond 2 Mbit/s
· Obligation of access and interconnection (Eht. 106. §; Access Directive Art. 12)
Obligation of access and interconnection has been withdrawn for the market of digital leased lines with capacity beyond 2 Mbit/s
· Obligation of accounting separation (Eht. 105. §; Access Directive Art. 11)
Obligation of accounting separation has been withdrawn for the market of digital leased lines with capacity beyond 2 Mbit/s
Obligation of cost orientation and price control (Eht. 108. §; Access Directive Art. 13) has been withdrawn for the whole market of terminating segments of leased lines.
3.2 The reasons for which the imposition, maintenance or amendment of obligations on undertakings is considered proportional and justified in the light of the objectives laid down in Article 8 of Directive 2002/21/EC (Framework Directive). Alternatively, indicate the paragraphs, sections or pages of the draft measure where such information is to be found
See detailed reasoning in the justification part of draft decision, Chapter A, Title III.
3.3 If the remedies proposed are other than those set out in Articles 9 to 13 of Directive 2002/19/EC (Access Directive), please indicate which are the «exceptional circumstances» within the meaning of Article 8 (3) of thereof which justify the imposition of such remedies. Alternatively, indicate the paragraphs, sections or pages of the draft measure where such information is to be found
Not applicable
Section 4 Compliance with international obligations
4.1 Whether the proposed draft measure intends to impose, amend or withdraw obligations on market players as provided for in Article 8(5) of Directive 2002/19/EC (Access Directive)
Not applicable
4.2 The name(s) of the undertaking(s) concerned
Not applicable
4.3 Which are the international commitments entered by the Community and its Member States that need to be respected
Not applicable
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