EC Takes Polish Telecoms Regulator To Task

by Ulrika Lomas, for LawAndTax-News.com, Brussels

16 January 2007

The European Commission on Monday issued a decision requiring the Polish telecom regulator, Urzad Regulacji Elektronicznej (UKE), to withdraw its draft measures for regulating retail access services.

Two months ago, the Commission expressed serious doubts that UKE's plans for regulating these markets were compatible with Community law, and requested UKE to back its market definition with convincing evidence.

In the EC's view, UKE has failed to justify why it intends to regulate broadband access services in addition to regulating retail narrowband access.

"So far retail broadband access services have not been regulated in any other Member State. Regulation can only be imposed on the basis of correct market analysis," observed Viviane Reding, EU Commissioner for Information Society and Media.

She continued:

"The Commission wants to ensure that the Polish regulator's assessment complies with competition law principles and will not create barriers to the single market, restrict competition or hamper investment and innovation."

In a statement further explaining the reasoning behind its request, the European Commission stated that:

"During the last two months of the so-called "Phase II" procedure applying EU telecom rules, the Commission assessed further clarifications provided by UKE and third parties. Based on competition law, the Commission concludes that in terms of both price and function, broadband access services cannot be considered to belong to the same market as narrowband access."

"The Commission is concerned that UKE's plans to regulate Telekomunikacja Polska S.A.'s (TP) retail broadband access services on the basis of an incorrect market definition on which the subsequent market analysis is based, may hinder TP in its ability to compete for the provision of such services and may discourage TP, as well as other operators, from investing in the development of broadband infrastructure."

"The Commission takes note of UKE's concerns about possible anticompetitive behaviour in the Polish retail broadband market. It believes, however, that under normal circumstances regulation at the wholesale level is sufficient. UKE is therefore invited to first implement efficient wholesale regulation before deciding whether there is still a need for retail regulation. In any event, competition law continues to apply."

It concluded by announcing that:

"UKE will have to withdraw its regulatory measure and to fully reflect the Commission's present analysis when re-identifying the Polish markets for retail access services."

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