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Market analysis decision on wholesale broadband access

Market analysis decisions

Under the terms of Chapter 6a of the Telecommunications Act [Telecommunicatiewet], the Independent Post and Telecommunications Authority (hereinafter “the Commission”) is required to analyse the markets in the electronic communication sector, to define the relevant markets, and to determine whether de facto competition exists in those markets. In the event that the Commission determines that a defined market is not really competitive, it will identify which companies hold significant market power (hereinafter “SMP”) in the markets, and it will impose duties on them in so far as it is appropriate to do so.

This decision concerns the relevant markets for wholesale broadband access. It consists of a general section (Chapters 2 and 3), which is virtually identical in the case of all market analysis decisions, and a part which is specific to the relevant markets for wholesale broadband access (Chapters 4 to 9).

The Commission has examined which markets are identical to the market for wholesale broadband access referred to in the European Commission’s recommendation (Market 12). It has concluded that the market for wholesale broadband access consists of two separate relevant markets. They are the markets for low and high quality wholesale broadband access. The contention ratio is the feature which distinguishes these two markets from each other. Those products which have a contention ratio of 1:1 to 1:20, are part of the relevant market for high quality wholesale broadband access, and those with a contention ratio in excess of 1:20 are part of the relevant market of low quality wholesale broadband access. The geographical scope of the market is national in the case of both high and low quality wholesale broadband access.

The market for low quality wholesale broadband access is, in fact, competitive. No party holds significant market power in this market. The market for high quality wholesale broadband access is not, in fact, competitive. Royal Dutch KPN N.V. and its subsidiaries (hereinafter “KPN”) hold significant market power in the market for high quality wholesale broadband access.

Due to KPN’s SMP position, the following competition inhibiting actions could occur in the market for high quality wholesale broadband access:

· refusal of supply or grant access;

· excessive prices and price discrimination;

· the discriminatory use or suppression of information;

· delaying tactics and the use of inappropriate terms and conditions;

· quality discrimination bundling or cross-selling;

· the improper use of information in respect of competitors;

· cross-subsidisation and bundling or tied sales;

· strategic product design.

In order to prevent the occurrence of the above-mentioned anticompetitive practices, the Commission has imposed the following duties on KPN.

An obligation to provide access

KPN has a duty to accede to reasonable requests for high quality wholesale broadband access and related facilities.

A duty not to discriminate

KPN has a duty to provide high quality wholesale broadband access and related facilities subject to identical terms and conditions in identical circumstances. This obligation also entails that KPN will apply the same terms and conditions as those applicable to itself, its subsidiaries or its business partners in identical circumstances.

Publication of a reference offer

Within 30 days after this decision comes into effect, KPN is required to publish a reference offer for high quality wholesale broadband access and related facilities and to update this reference offer regularly.

Appeals

Two parties have filed appeals against this market analysis decision on unbundled access to the local loop with the Trade and Industry Appeals Tribunal [College van Beroep voor het bedrijfsleven (CBb)]. They are Tele2/Versatel and the Associatie van Competitieve Telecomoperators [Association of Competitive Telecommunications Operators (ACT)]. A he