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Belgacom suggests the Commission to at least deregulate very high bit-rate leased lines. Reasons are as follows. First, this sub-market is typically characterised by intense competition. Second, from a forward-looking perspective, we can conclude that the arrival of next generation networks, which form an emerging market, increase even more competition in this sector. Any intervention in the development of new technology will depresses investment incentive and finally innovation incentive.
As a consequence, Belgacom alleges that at least high bit-rate terminating segments should be deregulated and no longer included in the list of relevant markets.
IV. Comments on Data/Internet Services
Before actually analyzing the inclusion of markets 11 and 12, the Commission should recognize that, in their present forms, markets 11 and 12 do not accurately describe an economic market, according to competition law-based relevant market methodology. Indeed, markets 11 and 12 are wholesale “markets” created by regulation. Even more, they are a “remedy” and not a “relevant market”.
Because of this, the Commission should clearly indicate what is its objective of maintaining these “markets”/”remedies” in conjunction with the theory of “ladder of investment”, and therefore, in particular, clarify the interdependency between these “markets”, in view of aiming at sustainable competition.
Also, it should be underlined from the outset that regulatory intervention on these “markets” should focus on those parts that can be characterized as truly non-replicable legacy facilities.
i. Local Loop Unbundling (Market 11): Maintained but modified
First, according to Belgacom, LLU should be considered as a sufficient remedy for broadband access. Indeed, in Belgium, the network can be replicated in an economic sound way, up to the local loop. As indicated before, access regulation should indeed focus on non-replicable legacy assets and target only clearly identified market failures. Only in this way, access regulation can promote investment in those areas/parts of the network where replication is feasible.
Belgacom does not want to shake up the very foundation of liberalisation on electronic communications market. However, Belgacom questions the Commission’ position that the scope of market 11 is only limited to PSTN loops so far. First, this position is absolutely untenable in terms of the principle of technological neutrality. Second, upgraded cable systems are sufficiently widely developed in Belgium. With regard to the broadband penetration, cable operators developed almost in parallel to ADSL operators since 1999. Cable operator has taken nearly 40% of market share of retail broadband access in Belgium at the end of 2004.
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