EU challenges Belgium access proposals
June 22, 2011
The European Commission has expressed a number of concerns on proposals by Belgian broadcasting and broadband regulators. In particular, the Commission is asking the Belgian regulators to take full account of market developments in both markets and to further substantiate and justify its reasoning with regard to the broadcasting market. The Commission believes Belgium hasn’t taken account of recent competitive developments and, thereby, has made the access obligations on existing operators too onerous.
The plans would oblige Belgacom and cable operators to allow alternative operators to compete more effectively in the markets for both cable and xDSL.
Under the proposed measure, Belgacom would have to give access for competitors to its broadband network (using telephone lines) and the cable operators, Telenet, Brutélé, Numéricable, Tecteo and AIESH would have to give access for competitors to their cable networks.
Neelie Kroes, European Commission Vice President for the Digital Agenda said “I fully share the objective of the Belgian audiovisual and telecoms regulators to enhance competition for the benefit of the Belgian consumers, who are entitled to more choice and lower prices. However, regulators have to carefully examine market developments and avoid imposing disproportionate obligations on market operators, as this may create unnecessary burdens and ultimately stifle investment and innovation. The Commission has therefore asked the Belgian regulators to carefully examine the competitive conditions in the markets concerned and provide further evidence for their proposed measures”.
Cable Europe welcomed the Commission’s intervention: “We are encouraged by the European Commission’s statement today referring to the wholesale broadcasting transmission market in Belgium. The methodologies and remedies put forward by the regulators have been questioned by the Commission, which comes after a similar situation in the Netherlands where courts overruled the regulator. The Commission observes that the broadcast market in Belgium possesses a satisfactory level of competition and has signaled the need for further evidence for the regulator’s proposed measures. This is further demonstrated by the remarkable level of platform competition which benefits the consumer.”
Belgian regulators’ proposals
In Belgium, some 80% of households receive their TV services from cable operators. While IPTV (television over the internet) has managed to acquire a considerable number of customers, alternative platforms such as satellite, digital terrestrial and mobile TV have not managed to gain a strong foothold in Belgium. The Belgian regulators consider that each of the Belgian cable operators has significant market power in the broadcasting markets corresponding to their network area. With the proposed regulation of cable networks, these alternative platforms should be able to take up analogue and digital transmission as well as broadband services over the cable platform and further develop their own digital offers, ultimately providing more choice for consumers. For this purpose, the Belgian regulators propose in particular to impose on cable operators an obligation to offer alternative broadcasting operators:
to resell their analogue TV programming,
to access their digital TV platform and
to resell their broadband internet products (the two latter obligations would not however extend to Belgacom).
The proposed regulation of the Belgian wholesale infrastructure and broadband access markets would continue to allow alternative operators to enter the retail broadband market. As in the vast majority of EU Member States, the largest network operator, Belgacom, is found to have significant market power on both these markets. As a result it would have to grant access to its network and provide a multicast service to alternative operators which should help them to provide, inter alia, IPTV over Belgacom’s broadband network.
Commission comments
The Commission has expressed a number of concerns about the Belgian regulators’ proposals.
In particular, it has criticised the regulators’ analysis of the broadcasting markets. It has also asked the regulators to take better account of market developments in the light of recent entry of competitors into the market (in particular, Belgacom’s IPTV), the trend towards multi-play and converged broadband-broadcasting offers and the proposed regulation of Belgacom (which should allow third parties to offer both broadband and IPTV services over Belgacom’s network).
The Commission further asked the regulators to justify better the proportionality of the obligation on cable operators to provide an analogue resale offer, also in the light of the declining importance of analogue TV. Moreover, the Commission has asked the Belgian regulators to justify the proposed obligation to provide such access also to Belgacom, which is quite successfully developing its IPTV and has a strong presence in the neighbouring telecom markets.
Concerning the broadband markets, the Commission invited the Belgian regulators to ensure that the proposed regulation does not prevent access to offers over next generation fibre networks and to take into account the competitive pressure exercised at retail level by the cable operators.