EU comments on broadband

query

http://forum.europa.eu.int/irc/DownLoad/kxeZAgJEmoGGdih1D45QTcAl6fO0dOyMlYJ_kDui5-UopoYpa3kQqgoThtVUo-TtGV2OG/sg%20greffe%202004%20d%20203756.pdf

The EU's comments on ComReg's review of the Wholesale Broadband Market

SkepticOne

For the definition of the relevant market, demand side substitution represents the most immediate and effective disciplinary force on the suppliers of a given product, in particular in relation to their pricing decisions. Basically, the exercise of market definition consists in identifying the effective alternative sources of supply for the customers of the undertakings involved7. ComReg explicitly excludes any potential direct constraint exercised by providers of cable- or FWA-based wholesale inputs and bases its conclusions entirely on an assumed indirect pricing constraint derived from substitutability at the retail level. The Commission considers that in the presence of evidence excluding demand side substitutability at the wholesale level, such an indirect competitive constraint could have been taken into account subsequent to the definition of the relevant market, i.e. at the stage of assessment of SMP.

Moreover, in the case of FWA platforms, the limited capacity – as identified by ComReg – carried on these networks may even call into question the existence of an indirect pricing constraint, as one of the assumptions of the “indirect pricing constraint” approach is the ability of providers to increase output in case of a retail price increase by the competing network operator.

So a slight difference of views between Brussels and ComReg. I think this reflects the more competitive environment in many European countries compared to Ireland. In the absence of network competition in Ireland such as exists in other countries, should Ireland concentrate on price regulation of Eircom's wholesale products or should the possibility of future network competition be taken into account.

Ripwave

12 Month Contracts mean that there is very little "substitutability at the retail level". The existence of 12 month contracts completely undermines the fundamental basis of ComRegs position.

DonegalMan

SkepticOne wrote:

So a slight difference of views between Brussels and ComReg.

Glad to see that someone - other than the author - understands what that all means

Any chance of a layman's translation - are they saying Comreg done right or done wrong?

Martin

damien

Yeah, the plain english campaign needs to check that out.