Market  De)inition:  Experience  from  recent    

draft  decisions  

CERRE  Regulation  Forum  21  June  2011  

Catherine  Rutten  (BIPT)      

Digital  TV    

Telephony  

Telephony  

Analogue  TV  

Analogue  TV  

Digital  TV  

Broadband  internet  

Consumer  

= currently not available

= currently available

Digital  TV  

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Topics  

How  to  de?ine  a  market  ?    

How  does  the  market  look  like  ?  

How  to  regulate  ?  

Which  regulation  ?  

Questions  

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How  to  de)ine  a  market  ?    European  Commission’s  List  of  

markets  susceptible  to  ex  ante  regulation  :    1.  Access  to  ?ixed  telephone  network    2.  Call  origination  on  ?ixed  telephone  network  

  3.  Call  termination  on  ?ixed  telephone  networks  

  4.  Wholesale  access  (unbundled  access)  at  a  ?ixed  location  

  5.  Wholesale  broadband  access  (bit-­‐stream’  access)    

  6.  Wholesale  terminating  segments  of  leased  lines    

  7.  Mobile  termination  

  Other  markets  can  be  de?ined  by  NRA    Competition  law  principles      Forward  looking  perspective    Demand  &  supply  side  substituability  

  Limit  number  of  markets  susceptible  for  ex  ante  regulation  by  “three  criteria  test”  

  Newly  emerging  markets  should  not  be  subject  to  inappropriate  regulation  

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 How  does  the  market  look  like  ?  

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12%  24%  

40%   44%  11%  

11%  

12%   11%  

78%  65%  

49%   45%  

0%  10%  20%  30%  40%  50%  60%  70%  80%  90%  100%  

2007   2008   2009   Q1  2010  

Share  of  broadband  Internet  customers  with  a  bundle  including  or  not  digital  TV  

relative  to  the  total  number  of  Internet  users  

Broadband  only  

Bundles  incl.  broadband  without  digital  television  

Bundles  incl.  broadband  and  digital  television  

22%  

34%  

49%  

55%  

0%  

10%  

20%  

30%  

40%  

50%  

60%  

2007   2008   2009   2010  

Share  of  broadband  Internet  customers  with  a  bundle  relative  to  the  total  number  of  Internet  

users  

 How  does  the  market  look  like  ?    

 

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8%

17%

25%

37% 34%

46%

54%

62%

0%

10%

20%

30%

40%

50%

60%

70%

2007 2008 2009 2010

Share  of  customers  with  a  bundle  including  TV  in  the  total  number  of  TV  customers  

Total number of customers with TV (analog and / or digital) into a bundle compared to total number of customers with TV

Total number of digital television viewers with a bundle compared to total number of digital TV viewers

How  does  the  market  look  like  ?  What’s  in  for  the  consumer?  

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70%

13%

2%

15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Discount rate Single invoice Image of the company, trust in

the company

Do not know

Drivers  for  multiple  play  

How  to  regulate  ?  

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 De)ine  product  market  

   Substituability  tests    Pay  TV  /  Free  TV    Analogue  TV  /  Digital  TV    Digital  Cable  TV  /  IPTV  DSL  TV      Digital  Cable  TV  /  satellite  TV  (non  sub.)    Digital  Cable  TV  /  Digital  Terrestial  Television    (non  sub.)    Digital  Cable  TV  /  Mobile  TV  (non  sub.)     Digital  Cable  TV  /  WeB-­‐TV  (non  sub.)  

  No  separate  market  for  bundles    Relevant  Product  Market    is  de?ined  as  “Retailmarket  for  the  

delivery  of    analogue  and  digital  broadcasting    signals  over  the  Cable  (CATV)  and  DSL  broadcasting  signals  delivered  over  copper  (IPTV)”  

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De)ine  geographic  market  

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De)ine  geographic  market  

  Geographic  market  segmentation  corresponding  to  the  coverage  areas  of  the  5  individual  cable  operators  in  Belgium:  

  Offers  of  5  cable  operators  are  not  demand-­‐substitutable;  

  No  supply  substitution;    No  manifest  chain  substitution  between  cable  operators  as  a  result  of  Belgacom’s  national  IPTV  network;  

  Different  competitive  conditions  between  coverage  areas;  

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De)ine  geographic  market  

 Cable  operator  A  (Coverage  Area  A)  

 

 Cable  operator  B    (Coverage  Area  B)  

Belgacom  TV  (national  coverage)  

no  manifest  chain  

substitution  

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Three  Criteria  test  

  High  and  non-­‐transitory  entry  barriers;      No  tendency  towards  effective  competition  with  relevant  time  

horizon;    Competition  law  alone  would  not  adequately  address  the  market  

failures  identi?ied;  =>  Market  is  relevant  for  ex  ante  regulation    

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Which  [proposed]  regulation  ?  

Broadband  

Belgacom  SMP    

Market  4  

LLU  

 Belgacom  SMP    

Market  5  

Bitstream  incl.  Multicast  

Broadcast  

Cable  Operators  SMP    

on  analog  &  digital  

Resale  analog  

Digital  TV  transmission  

Resale  broadband  

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Belgian  institutional  landscape      Sector  Consultation  (21  december  2010-­‐  18  February  2011)  

  BIPT  :  Telecom  regulator    1  draft  decision  

  4  media  regulators  in  Belgium:  CSA,  VRM,  Medienrat,  BIPT    4  draft  decisions  imposing  remedies  on  5  cable  operators    q  BIPT  proposing  remedies  on  Brutele,  Numéricable,    Telenet  q  CSA  proposing  remedies  on  Brutélé,  Tecteo,Telenet,A.I.E.S.H.    q  Medienrat  proposing  remedies  on  Tecteo  q  VRM  proposing  remedies  on  Numéricable,  Tecteo,  Telenet  

q  Advice  of  the  National  Competition  Authority  on  21  February  2011  q  “CRC”  (=  NRA  which  combining  the  4  regulators)  noti?ied  draft  

decisions  to  the  European  Commission  on  20  May  2011  q  Reaction  European  Commission  (cfr  press  release  21  June  2011)  q  Next  steps  

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Questions  for  debate    

  Ex  ante  regulation  of  newly  emerging  market:  what  are  the  bounderies  ?  

  Is  there  a  “market  for  bundles”  in  the  different  regulated  network  industries  ?  

 

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