art.7: NGA in Hungary

Last week the Commission published its comments on the Hungarian NGA regulation. Interestingly, the Commission notes that ducts and fiber unbundling does not come as alternatives... It also points out that 6 months notice should be given for retail service launch..

Comments are reproduced below:

Conditionality of duct access

The Commission takes note of the fact that NMHH proposes to mandate duct access only in those cases where unbundling is not technically feasible and to mandate access to dark fibre only where duct access is unrealizable for objective technical reasons. In this respect the Commission points out that in the Commission's NGA Recommendation27 no such conditionality has been established between unbundled access to the fibre loop and access to civil engineering infrastructure of the SMP operator. On the contrary, the NGA Recommendation clearly sets out that in Market 4 an NRA should, in principle, mandate both access to civil engineering infrastructure and unbundled access to the fibre loop. Access to civil engineering infrastructure is crucial for the deployment of parallel fibre networks. In the light of this, the Commission requests NMHH to re-consider the extent of the proposed access obligations and to require the SMP operator to offer duct access alongside unbundled access to the fibre loop.

Imposition of ancillary backhaul services in an area outside the relevant market

NMHH proposes to impose on the SMP operators the obligation to offer ancillary services, which facilitate the backhauling of traffic to the access seeker's first point of network presence. The obligation covers, inter alia, network segments, which go beyond the access network and thus covers services, which are not part of the relevant market. NMHH maintains that one of the possible reasons for the low demand for LLU services in Hungary has been the lack of regulated backhaul services. In fact, smaller alternative operators, with less extended networks, can find it very difficult to reach the local exchanges. NMHH sustains that in order to address this issue and to foster infrastructure-based competition, an ancillary obligation extended beyond the access network is needed. The Commission points out that NRAs may impose obligations in an area outside but closely related to the relevant market under review only if such imposition constitutes (i) the most appropriate, proportionate and efficient means of remedying the lack of effective competition found on the relevant market, and (ii) an essential element without which the obligation(s) imposed on the relevant market would be ineffective. In light of the above, the Commission urges NMHH to demonstrate and to further justify, in its final measures, why such a remedy is an essential element without which the proposed primary access obligations on the relevant markets would be ineffective and why it considers that the proposed backhaul access obligation is the most appropriate, proportionate and efficient means of remedying the lack of effective competition found on the relevant markets.

Lead time of wholesale NGA offer before retail services based on fibre are launched

The Commission notes the fact that NMHH proposes to require the SMP operators to make available new wholesale access products before the corresponding retail product is launched. However, in the context of wholesale broadband access over NGA, the time period of 30 days proposed by NMHH appears insufficient to ensure effective protection from non-discrimination. In order to avoid timing advantages for the retail arms of the SMP operator a reasonable period should be given to access seekers between the updating of the wholesale Bitstream offer and the launch of the corresponding retail product. As set out in Recommend 32 of the NGA Recommendation, the Commission considers that a six months period would be reasonable in such cases to make the necessary adjustments. In view of this, the Commission asks NMHH to reconsider the scope of its non-discrimination obligation and to introduce a lead time of at least six months with regard to NGA based broadband access.