02.09.2010 

“We submit to public consultation the regulatory measures applicable to the markets for the services of leased lines-terminating segments. As compared to 2003 - when the first regulations were issued -, now two different markets have been identified, i.e. the market for the services of leased lines-terminating segments with a transmission capacity of up to, and including, 2 Mbps, and the market for the services of leased lines-terminating segments with a transmission capacity higher than 2 Mbps, and specific measures for each of these two markets have been taken”, Catalin Marinescu, the President of ANCOM, declared.

The service of leased lines-terminating segments was defined as the segment of leased line-total circuit delimited by an interconnection point for leased lines and a terminal network point placed within the same county as the interconnection point. The use of a leased lines service is convenient when a user wishes to connect two points of presence between which there is a permanent flow of communications. Of higher relevance for end-users is the warranty level as regards the network availability, performance and security.

Considering the high market share, i.e. more than 60% in relation to the number of circuits and approx. 70% in relation to revenues, held by Romtelecom on the relevant market for the services of leased lines-terminating segments with a transmission capacity of up to, and including, 2 Mbps, the barriers existing at the entry on this market, the lack of potential competition and the lack of the countervailing buyers’ power that might trigger competition constraints on Romtelecom, ANCOM deems that Romtelecom holds significant power on this market and proposes imposing on this company the following obligations:

-         allow access to, and use of, specific elements of the network and of the associated infrastructure;

-         transparency;

-         non-discrimination;

-         price control, including tariff cost-orientation, based on the bottom-up calculation model of the long-run average incremental costs associated to the access network operated by Romtelecom, developed by ANCOM;

-         accounting separation.

The analysis undertaken by ANCOM on the market for the services of leased lines-terminating segments with a transmission capacity higher than 2 Mbps showed that, despite certain market entry barriers, it is unlikely that these barriers could be excessively high so as to prevent market entry or render it more difficult . Moreover, from a dynamic perspective, the market for the services of leased lines-terminating segments with a transmission capacity higher than 2 Mbps tends toward effective competition, and any competition issue may be remedied by the Competition Council, which will be able to establish whether certain practices represent an abuse of dominant position pursuant to the competition law or not.

Since no operator holds significant power on the market for the services of leased lines-terminating segments with a transmission capacity higher than 2 Mbps, ANCOM proposes to withdraw all the obligations imposed on Romtelecom in 2003, as soon as the measures submitted now for public consultation become effective.

The draft decision is available for consultation on the ANCOM website, here. The interested persons are invited to send their comments and suggestions, by 04.10.2010, at the ANCOM headquarters in 2 Delea Noua Street, Bucharest 3, or directly to the Authority’s Registry Office. Comments and recommendations may also be sent by fax to +40 372 845 404 or by e-mail to consultare@ancom.org.ro.