The European Commission has ordered Poland’s national telco regulator, Urzad Regulacji Elektronicznej (UKE), to withdraw plans to regulate Poland’s domestic retail market for services such as internet access.
UKE wants to examine the retail prices, promotions and terms of conditions set by the incumbent national provider, Telekomunikacja Polska (TPSA). It claims the planned rules are needed to improve competition in a market still dominated by TPSA, and said earlier this month that it plans to fine the company 3% of its annual sales revenue for overcharging end-users for broadband internet access.
The Commission, the European Union’s executive body, is considering extending the reach of telecommunications regulation after concluding last year that many market sectors across the Union remain dominated by the former public monopolies.
However, it says Poland is going about it the wrong way, partly by focusing on retail markets instead of wholesale markets, and partly because it defines broadband and dial-up internet access markets as one market.
“The Commission is concerned that UKE’s plans to regulate TPSA retail broadband access services on the basis of an incorrect market definition may hinder TPSA in its ability to compete and may discourage TPSA, as well as other operators, from investing in the development of broadband infrastructure,” an EU statement reads.
While taking note of UKE’s concerns about possible anti-competitive behaviour in the Polish retail broadband market, the Commission said “that under normal circumstances regulation at the wholesale level is sufficient.”
UKE notified the Commission about its draft measures concerning the Polish markets for fixed public telephone network access for homes and businesses in the fourth quarter of last year. UKE’s analysis, which included access to broadband services in the relevant markets, found that TPSA has significant market power, which, under EU-wide telecommunications rules, means that market regulation is needed.
The Commission replied in November questioning the need for such tough intervention in the market. “UKE has failed to justify why it intends to regulate broadband access services in addition to regulating retail narrowband access,” the Commission said.
In addition to threatening TPSA with hefty fines, UKE could also fine TPSA chief executive Maciej Witucki up to three times his gross monthly salary if the company fails to provide the regulator with its 2006 sales results by early February, UKE’s head Anna Strezynska told journalists in Warsaw earlier this month.