The EC has decided that the PTS can’t adopt its latest market review, and that it needs to take regional differences into account in its analysis.
Background: The Swedish regulator, the PTS, is currently reviewing the wholesale broadband markets. In November 2019, the regulator submitted to the EC its draft review of the wholesale local and central access markets (Markets 3a and 3b in the EC’s Recommendation on relevant markets). The EC had ‘serious doubts’ about the fibre segment of Market 3a, which the PTS had defined to be national in scope despite differences in competitive conditions across regions, with Telia designated as having SMP. While the PTS presented some evidence that Telia acts uniformly within the areas in which it is present with its fibre network, the analysis did not sufficiently take into account the actual boundaries of Telia’s network. The PTS’s analysis also did not seem to accurately reflect the role of the circa 180 municipality-owned local fibre operators. These are generally wholesale-only operators, and Telia generally acts as an access seeker in those areas.
The EC vetoes the review: On 10 February 2020, the EC issued a decision on the PTS’s market review, which also took into account the opinion of BEREC (which partially shared the EC’s view in January 2020). The EC’s objections remain, and the PTS can not adopt the draft review with regard to local access to fibre as it stands. The EC believes the PTS has not provided sufficient evidence to define the market as national, and asked the regulator to conduct a more detailed analysis of the geographical market.
What happens now? The PTS can adopt its Market 3a decision related to copper networks, but will have to redraft its review of the wholesale fibre market to address the objections raised by the EC. The PTS noted it is the first in Europe to define a separate market for fibre, and notes this case will be a useful benchmark for other regulators which are considering a similar approach.
