iesy Repository GmbH - Irish Stock Exchange

approval by RegTP, provided that the frequencies used are located in frequency ranges in which no security-related radio
services are operated, and provided that electromagnetic interferences do not exceed a specified threshold. A similar
provision in the preceding Ordinance was deemed by the Federal Ministry of Economics and Labor to conflict with European
Community law. It is currently open as to whether this new provision, which added the reference to security-related radio
services, is now regarded as being in line with European Community law.
iesy also operates AMTV radio links in Hesse. In 1999, the iesy Predecessor obtained the frequency assignments
necessary for the operation of the AMTV radio links which iesy continues to hold. iesy is currently in the process of
replacing these AMTV radio links. See “Business—Business of iesy—Supply—SLAs with DTAG”. Furthermore, ish
operated such AMTV radio links in North Rhine-Westphalia and obtained through its legal predecessor in 1999 the
frequency assignments necessary for such operation. However, in 2004 ish started a program to replace all or at least most of
these AMTV radio links. See “Business—Business of ish—Supply—SLAs with DTAG”. To the extent we no longer operate
the respective AMTV radio links, the frequency assignments issued for our operation can be returned to RegTP as they are no
longer required and we, after having returned the frequency assignments, will no longer be required to pay the respective
frequency fees.
Regulation of Fees for Telecommunications Services
Fees for telecommunications services of companies with significant market power and of companies which control
access to the end customer are generally subject to regulation by RegTP.
In past decisions under the TKG–1996, both RegTP and the FCO have considered the regional cable companies
formerly owned by DTAG to enjoy dominant positions in their regional markets with respect to the markets of (i) the
feeding-in of radio and television programs into telecommunications cable networks, (ii) the distribution of radio and
television programs via telecommunications cable networks to end-customers and (iii) the signal delivery to cable network
operators on network Level 4. Hence, both the feed-in fees paid by the broadcasters (carriage fees) and the fees paid by
subscribers to DTAG (subscription fees) have been subject to fee regulation. In an order of 1999, RegTP imposed certain
obligations on the pricing structure for carriage fees levied by DTAG relating to analog programs. Such fees may not
discriminate against certain broadcasters and in particular may not differentiate between regional and local programs in
relation to federal programs, programs transmitted by terrestrial means in relation to satellite programs, media services in
relation to broadcasting services, or freely available programs in relation to encrypted programs. Regulatory orders
(“Regulierungsverfügungen”) based on the possession of a dominant position and issued under the TKG–1996 remain valid
until they are replaced by new orders pursuant to the TKG–2004. However, under the old regime, RegTP did not object to the
current carriage fees or the current subscriber fees charged by iesy or ish.
Under the TKG–2004, RegTP must carry out a market analysis with regard to different telecommunications markets
and determine which companies are deemed to have significant market power in these markets and if these companies will be
subject to regulatory orders which may include in particular access obligations, fee regulation or separate bookkeeping
obligations. With respect to the market for radio and television broadcasting services, RegTP is expected to carry out these
tasks in the near future.
The way in which fees are regulated is dependent on the possession of significant market power as well as on the
imposition of access obligations. Access fees of a company with significant market power are generally subject to regulatory
review after they have been implemented (ex post review). However, such fees are subject to prior approval by RegTP, in the
event that RegTP has imposed access obligations on the company because it deems such regulation necessary for the
development of a competitive market (ex ante review). The ex ante fee review does not apply, however, if (i) the company
does not have significant market power in the market for end-customer services; (ii) the company did not have significant
market power in the relevant market before the TKG–2004 came into force, and (iii) an ex post review of the respective fees
is sufficient to reach the objectives of the TKG–2004. The access fees of companies without significant market power which
control access to the end customer and on which RegTP has imposed access obligations are also subject to ex post review.
Under the TKG–2004, end customer fees are generally subject to ex post review. However, end customer fees charged
by companies with significant market power may become subject to prior approval by RegTP if effective competition is not
to be expected in that particular market in the near future.
During an ex ante review of fees, RegTP examines the fees charged to determine whether they are based on efficient
service provision and also whether they are not abusive. In case of an ex post review, RegTP only examines the fees to
determine whether they result from an abuse of the company’s significant market power. Fees are found to be abusive in
particular when they prevail solely as a result of having significant market power, significantly restrict competition of other
telecommunications operators, which, for example, is the case if the fees do not cover the costs, result in a margin squeeze,
cover unreasonably bundled products, or are discriminatory.
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