Notification of a Draft Measure Pursuant to Article 7, para. 3, of the Framework Directive 2002/21/EC SUMMARY. of Public Utilities Commission

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1 PUBLIC UTILITIES COMMISSION Notification of a Draft Measure Pursuant to Article 7, para. 3, of the Framework Directive 2002/21/EC SUMMARY of Public Utilities Commission Decision concerning Call Origination on, Call Termination on and Transit Services in the Fixed Public Telephone Network(s) ( Markets 8, 9 and 10 ) - 1 -

2 Section 1. Market definition 1.1 Relevant product / service market 1) Call origination on the public telephone network provided at a fixed location. This market is included in the Commission s recommendation 1 on relevant market as market no. 8. 2) Call termination on individual public telephone networks provided at a fixed location. This market is included in the Commission s recommendation on relevant market as market no. 9. 3) Transit services in the fixed public telephone network. This market is included in the Commission s recommendation on relevant market as market no Relevant geographic market 1) The territory of the Republic of Latvia 2) The coverage area of each individual termination network 3) The territory of the Republic of Latvia 1.3 Summary of the opinion of the Latvian Competition Authority National competition authority the Competition Council concludes that fully supports the market definitions (letter of Competition Council enclosed) 1.4 Results of the public consultation Public Utilities Commission received two comments, one from a fixed network operator (SIA Lattelekom ) and one from a mobile network operator ( Latvijas Mobilais Telefons SIA) Both operators raised no objections to market definitions 1.5 Defined relevant markets different from those listed in the Recommendation on relevant markets as the defined relevant markets appear in the Recommendation. 1 Commission Recommendation of 11 February 2003 on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communication networks and services - 2 -

3 Section 2. Designation of Undertakings with SMP 2.1 Undertaking(s) designated as having SMP 1) SIA Lattelekom 2) SIA AERONAVIGĀCIJAS SERVISS SIA BALTKOM TV SIA SIA CSC TELECOM SIA D-COM SIA DATAGRUPA 777 SIA FINORS TELEKOM SIA LATTELENET VAS Latvijas dzelzceļš SIA Lattelekom AS Latvenergo SIA OPTRON SIA SIGIS SIA TELE2 TELECOM AS Telekom Baltija SIA TELEKOMUNIKĀCIJU GRUPA SIA TELENETS SIA UNISTARS 3) SIA Lattelekom 2.2 Criteria for SMP designation Market Shares Significant Size of the Undertaking Control of Infrastructure not Easily Duplicated (only applied for markets 8 and 9) Lack or Low Level of Countervailing Buying Power Barriers to Market Entry or Expansion 2.3 Main undertakings (competitors) present / active in the relevant market 1) VAS Latvijas Dzelzceļš - 3 -

4 SIA BALTKOM TV SIA AS Latvenergo 2) 3) VAS Latvijas Dzelzceļš SIA TELEKOMUNIKĀCIJU GRUPA SIA LATTELENET 2.4 Market shares of the undertakings 1) SIA Lattelekom > 99 % All other competitors < 1 % 2) 100 % for each undertaking each individual network is considered as relevant market 3) SIA Lattelekom > 99 % All other competitors < 1 % 2.5 Opinion of the National Competition Authority National competition authority the Competition Council concludes that fully supports results of market analysis (letter of Competition Council enclosed) 2.6 Results of the public consultation Public Utilities Commission received two comments, one from a fixed network operator (SIA Lattelekom ) and one from a mobile network operator ( Latvijas Mobilais Telefons SIA). Both operators oppose Public Utilities Commission s conclusion, that on market 9 the end-users have no countervailing buying power. The most important comments of SIA Lattelekom are: SIA Lattelekom provides that Public Utilities Commission did not name the specific competition problems and market failures in the analysis. Furthermore, SIA Lattelekom mentions, that not all criteria for SMP designation have been used. SIA Lattelekom can not understand why Public Utilities Commission analyzed barriers to entry for market 9, because market 9 is defined in way, that each market participant has a monopoly. SIA Lattelekom argues, that they do not have any motivation to delay the signing and implementation of interconnections agreement, because every new agreement increases the value of their own network

5 Section 3. Regulatory obligations 3.1 Legal basis for the obligations The following obligations are proposed: 1) Obligations of access to, and use of, specific network facilities (Art. 12, Access Directive) reference offers for interconnection and unbundled access Obligation of non-discrimination (Article 10, Access Directive) Price control and cost accounting obligations (Article 13, Access Directive) Obligation of accounting separation (Article 13, Access Directive) 2) a) SIA Lattelekom Obligations of access to, and use of, specific network facilities (Art. 12, Access Directive) reference offers for interconnection and unbundled access Obligation of non-discrimination (Article 10, Access Directive) Price control and cost accounting obligations (Article 13, Access Directive) Obligation of accounting separation (Article 13, Access Directive) b) Other operator having SMP 3) price lists for interconnection services Obligations of access to, and use of, specific network facilities (Art. 12, Access Directive) reference offers for interconnection and unbundled access Obligation of non-discrimination (Article 10, Access Directive) Price control and cost accounting obligations (Article 13, Access Directive) Obligation of accounting separation (Article 13, Access Directive) 3.2 Reasons for the imposition, amendment or withdrawal of obligations See Chapter 9.3. of the draft decision 3.3 Exceptional circumstances - 5 -

6 Section 4. Compliance with international obligations 4.1 Imposition, amendment or withdrawal of obligations provided for in Article 8(5) of Directive 2002/19/EC (Access Directive) 4.2 Name(s) of undertaking(s) concerned 4.3 International commitments that need to be respected - 6 -

PUBLIC UTILITIES COMMISSION. Notification of a Draft Measure Pursuant to Article 7, para. 3, of the Framework Directive 2002/21/EC SUMMARY

PUBLIC UTILITIES COMMISSION. Notification of a Draft Measure Pursuant to Article 7, para. 3, of the Framework Directive 2002/21/EC SUMMARY PUBLIC UTILITIES COMMISSION Notification of a Draft Measure Pursuant to Article 7, para. 3, of the Framework Directive 2002/21/EC SUMMARY of Public Utilities Commission Draft Decision concerning Call termination