art 7: Estonia M18

The Commission also recently published its comments on the Estonian old M18. Interesting in view of some countries' announ-ced intention to regulate cable networks (e.g., Belgium).

Need to regularly verify the ineffectiveness of competition

The market for broadcasting transmission services is no longer recommended by the Commission for ex ante regulation, as greater platform competition and fewer capacity constraints, mainly due to the transition from analogue to digital transmission platforms, should render it effectively competitive. Despite the possible existence of market entry barriers, the market dynamics in this market are generally such that the second criterion of the three criteria test is not met.

In the Estonian case at hand, the Commission recognises however that the specificities of the relevant market as delineated by ECA are such that market dynamics have not yet materialised as could be expected. At retail level, there appears to be at this stage no substitutability between broadcasting transmission signals provided over different transmission platforms (e.g. via cable, DSL or terrestrial networks), except in some highly populated urban areas.

In the relevant digital terrestrial wholesale broadcasting transmission services market, competitive dynamics will most likely not occur until Starman - the operator that has recently been granted the remaining free multiplex licences - starts operations. However, the Commission notes that Starman has committed to start nationwide broadcasting in a few months time, intending to use the network of one mobile operator and potentially the masts of the SMP operator Levira, which are subject to (price) regulation. In case Starman comes to an agreement with the mobile operator concerned, this could in principle also entail investments by the latter in the upgrading of its mobile network so that it allows for offering broadcasting transmission services. As soon as the mobile network would be upgraded so that it allows either nationwide or large area broadcasting transmission coverage17, Starman, potentially by complementing the network with other low masts/buildings, could exert countervailing buyer power vis-à-vis Levira and, as a result, increase its market share as well as potentially expand its network coverage. In such a case it can not be excluded that competitive conditions evolve to such an extent that ECA may have to revise its conclusions on the need for regulatory intervention on the relevant market.

The Commission therefore invites ECA to regularly verify over the review period the ineffectiveness of competition between transmission platforms in the relevant market, and in particular whether the alternative operator Starman is still impeded to compete on the terrestrial platform. In case such verification was no longer possible, regulation might need to be withdrawn.