BEREC REPORT ON IMPACT OF FIXED-MOBILE ... - berec - Europa

BoR (11) 54
investigation and the focal area is the area under investigation, in which the focal
product is sold. The definition of the focal product may depend on specific market
conditions and on the issues that NRAs want to address during the market analysis.
When analysing FMS in an asymmetric substitution situation, an NRA should start by
identifying the focal product considering their national market conditions. One of the
possible criteria chosen by NRAs might be to define the focal product as the one where
competition problems are believed to exist. The experience in the European Union and
the analysis of the European Commission 12 has been that market failures are more
likely to arise in the markets for fixed services (e.g. retail fixed access, retail broadband
access when analysing markets 4 and 5) than in mobile services.
Two ways of considering asymmetric substitution in market analysis have been
identified:
(a) Consider the effects of asymmetric substitution on the focal product while
performing the market definition (Practice A);
(b) Consider the relevant effects of asymmetric substitution on the focal product (i)
when analysing whether the three criteria test 13 for imposing ex ante regulation
is met; (ii) in the competition assessment or (iii) when defining the appropriate
obligations to impose in the market (PRACTICE B).
Whether the competitive constraints of asymmetric substitution are considered in the
market definition phase or in other phases of the market analysis should not affect the
final result.
Practice A
After the identification of the focal product, the NRA verifies that there is substitution
from the focal product to the alternative product(s) but that there is not substitution from
the alternative product(s) to the focal product. In this case the alternative product(s) are
included in the same market as the focal product.
Practice A – inclusion in the same market
In September 2009 ANACOM published the review of the retail and wholesale leased
lines markets. Asymmetrical substitution was identified in this case because the SSNIP
test revealed that operators would change from “traditional” leased lines to Ethernet
leased lines but not the other way around. Considering that traditional leased lines (i)
12 EXPLANATORY NOTE to the Commission Recommendation on Relevant Product and Service Markets
13 The three cumulative criteria for ex ante regulation are: (i) significant and non-transitory barriers to market entry, (ii)
the market exhibit characteristics such that it will not tend towards effective competition over time and (iii) ex post
application of competition law by itself is insufficient to regulate the market
13