The Consultation sets out ComReg's preliminary views on the wholesale markets for:
- The provision of fixed voice call origination on individual public telephone networks provided at a fixed location (FVCO); and
- The provision of call transit services (Transit).
FVCO is a wholesale service that involves the supply of the
switching, routing and conveyance of voice call up to a designated
point of handover on a network, which is typically located at a
switching point in a telephone exchange. FVCO services are
often supplied with an access path (referred to as Fixed Access or
FA) over which FVCO is supplied. eircom has been the sole supplier
of combined FVCO and FA services through eircom's Single
Billing-Wholesale Line Rental (SB-WLR) product.
Transit is a wholesale service provided to fixed and mobile
service providers that involves the switching, routing and
conveyance of calls between the point of handover of the FVCO stage
of a call up to, but not including the termination stage of a
call. The termination stage is typically from the nearest
switching point to the called party onwards. There are currently a
number of service providers in Ireland who provide Transit,
including eircom.
Together the purchase of FVCO and FA, and Transit services enables
fixed service providers to offer retail line rental and telephone
calls to both commercial and private end-users.
In line with the Framework Directive (Directive 2002/21/EC) and
Ireland's national Framework Regulations (SI 333 of 2011),
ComReg is required to define relevant markets, and then analyse and
review these relevant markets, at appropriate intervals. In
doing so, ComReg is guided, inter alia, by the European
Commission's 2007 Recommendation on Relevant Markets.
According to the 2007 Recommendation the Transit market is no
longer identified as a Relevant Market susceptible to ex
ante regulation at EU level. The FVCO market is not
included in the 2007 Recommendation but ComReg considers that
applying the so-called "Three Criteria
Test" to it, the FVCO market is susceptible to ex
ante regulation. The Three Criteria Test looks at (i)
the presence of high and non-transitory barriers to entry; (ii) a
market structure which does not tend towards effective competition
within the relevant time horizon; and (iii) the insufficiency of
competition law to adequately address the market failure(s)
concerned.
ComReg's Consultation essentially proposes:
(i) to continue to regulate the FVCO market, as it considers
eircom is likely to have SMP in this market. However, ComReg
proposes to move the obligation on eircom to provide Wholesale Line
Rental away from ComReg's decision in the retail market (where
the obligation currently resides) and into the FVCO market.
This would therefore seek to address competition problems at the
most upstream level and allow the potential de-regulation of
downstream markets.
Readers of previous eZines will recall ComReg's proposals in
its Supplementary Consultation on the Fixed Voice Access market
(which includes managed VoIP) to focus on better regulation by
addressing concerns at the wholesale level, and taking a less
interventionist approach at the retail level. In the Supplementary
Consultation ComReg sought to achieve this by proposing the
introduction of margin squeeze tests in the wholesale markets for
FVCO and wholesale broadband access (WBA) (see
article on "Managed VoIP – making waves in the Fixed
Voice Access market" in our January 2014 eZine).
ComReg's view at the time was that effective wholesale remedies
might permit the downstream removal of the current net revenue test
in the retail FVA market.
(ii) removing Transit from ex ante regulation as ComReg
considers the Transit market has the potential to tend towards
effective competition over time.
The Consultation forms part of a suite of related consultations
ComReg is conducting at the moment in the retail fixed access
market. Given the links between these consultations, it is
difficult to predict any outcomes at this stage. It will
certainly be no easy task taking into account the many competing
views and arriving at a suitable compromise for both wholesale and
retail levels of the market.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.