European Commission blocks Austrian regulator from introducing measures, which would unduly favour the national broadcaster
15 January
2018
Related policies
Following a
two months indepth investigation the European Commission today required the
Austrian broadcasting regulator (KommAustria) to withdraw plans for continued
regulation of the wholesale market for analogue terrestrial radio broadcasting
transmission in Austria, as such plans would place the national radio
broadcaster (ORF) at an undue competitive advantage over other broadcasters.
The
Austrian broadcasting regulator KommAustria proposed to the Commission, to
continue regulating the market for analogue terrestrial radio broadcasting.
KommAustria states that the market situation is largely unchanged since it last
assessed the market in 2013. The Commission is particularly concerned by the
fact that despite the lack of competitive developments in Austria under the
current regulatory regime, KommAustria proposed to impose a practically
unchanged set of regulatory obligations but excludes from the regulated market
the supply of radio transmission services by the main operator (ORS) to its
parent company, the national broadcaster (ORF). As a result, ORF would receive
a different and arguably better service than its direct competitors and, as the
majority owner of its supplier (ORS), can influence the latter's decisions
concerning infrastructure developments (such as where to build radio
transmission masts etc.). Furthermore, under the plans of KommAustria, ORF is
also subject to different price conditions than competing radio broadcasters.
The
Commission therefore questions the compatibility of KommAustria's proposals
with the EU telecoms rules and principles of competition law and decided to
block their implementation.
Background
In 2007 the
Commission recommended to all national regulators that the markets for
broadcasting transmission services should no longer be regulated due to
increased competition in these markets.
However,
the market for analogue radio broadcasting in Austria is still dominated by one
operator (ORS), which operates the only nationwide terrestrial broadcasting
transmission network. Contrary to other broadcasting markets, the analogue
radio broadcasting market has not seen growing infrastructure competition or
inter-platform competition, due to the importance of analogue radio devices
particularly in cars. The only notable competitor of ORS in Austria operates
with a limited regional footprint and only few broadcasting sites.
ORS, which
is proposed to be designated as having significant market power (SMP) is a
subsidiary of the Austrian public service broadcaster ORF, who holds a
controlling block of 60% of ORS's shares. ORS holds a steady market share of
over 90 % excluding self-supply (and over 99% including self-supply).
The
Commission is particularly concerned about the fact that KommAustria excludes
from the relevant market the supply of transmission services by ORS to ORF,
which in turn does not subject them to the regulatory measure proposed. As a
result, the national public radio broadcaster (ORF) receives a different and
arguably much better service than its direct private competitors. In addition,
as the majority owner of its supplier (ORS), it also can influence the latter's
decisions concerning infrastructure developments (such as where to build radio
transmission masts etc.). Furthermore, under the plans of KommAustria ORF is
also subject to different price conditions than competing private radio
providers.
A second
point of concern is the fact that the overall market structure of the market
has remained largely unchanged over the last regulatory period, which means
that the currently imposed remedies have not led to any development of
infrastructure competition. Despite this, and due to the fact that promoting
infrastructure competition is not regarded as a relevant regulatory goal in the
draft measure, KommAustria proposes to continue regulation of the market with
largely unchanged remedies, failing, however, to explain how the same set of
remedies will lead to a different market outcome.
In the
light of this and failing a new regulatory approach the Commission is concerned
that the current, uncompetitive market structure will remain unchanged in the
medium to long term.
As a result
of all of the above the Commission decided to veto the plans of KommAustria in
accordance with Article 7 of the Telecoms Framework Directive, which requires
national telecoms regulators to notify the Commission, the Body of European
Regulators for Electronic Communications (BEREC) and telecoms regulators in other
EU countries, of the measures they plan to introduce to solve market problems.
Where the
Commission has concerns as to the compatibility of the proposed regulatory
obligations with EU law, it can open an in-depth, or so-called Phase II, investigation.
If, at the end of this investigation, involving cooperation with the relevant
regulator and BEREC, the doubts around the compatibility of the proposal with
EU law persist, as in this case, the Commission may take a decision requiring
the national regulatory authority concerned to withdraw its proposed measure.
In this
case, the Commission opened the Phase II investigation on 13.11.2017. During
the Phase II, BEREC has issued its opinion on the Commission's serious doubts,
fully supporting the Commission's position. KommAustria has not submitted
further material or explanations to the Commission.
The
Commission's letter sent to the Austrian regulator will be published at CIRCABC
