Commission publishes 2nd consultation on the NGA recommandation

The Commission just publishes its 2nd consultation on the NGA recommandation.

Some useful principles seems to be recognized such as the reasonably efficient operator test:

A margin squeeze can be demonstrated by showing that the SMP operator's own downstream operations could not trade profitably on the basis of the upstream price charged to its competitors by the upstream operating arm of the SMP operator. ("equally efficient competitor" test). Alternatively, a margin squeeze can also be demonstrated by showing that the margin between the price charged to competitors on the upstream market for access and the price which the downstream arm of the SMP operator charges in the downstream market is insufficient to allow a reasonably efficient service provider in the downstream market to obtain a normal profit ("hypothetical reasonably efficient competitor test"). In the specific context of ex-ante price controls aiming to maintain effective competition between operators not benefiting from the same economies of scale and scope and having different unit network costs, a "reasonably efficient competitor test" will normally be more appropriate. Whatever method is chosen, NRAs should properly specify in advance the imputation test, the parameters to be used and the remedial mechanisms in case of established margin squeeze.