Much ado was made of the announcement that consumers could benefit from new roaming rules this summer: since 15 June 2017 consumers and business users can use their mobile phones throughout the European Union as part of their phone plan, without any extra charges. This major development has made it even simpler for consumers to spread the use of these services also cross-border.
The same cannot be said of the costs of services such as Netflix. That is due to a proposal of the European Commission to amend the Audiovisual Media Services Directive that was recently adopted by the Counsel. The reason for the proposal was that videos are increasingly being viewed online – via video-on-demand services, for instance – and much less via the traditional television channels. The objective of the amendment is to better harmonise the rules that the various market players must observe. Specifically, the proposal will lead to an increase in the costs of platforms such as Netflix. But the proposal has yet to be debated by the European Parliament and is therefore not yet final.
Net neutrality
In an earlier blog we already addressed ACM’s decision regarding T-Mobile’s “Data-free Music” service. At the end of 2016 ACM imposed a periodic penalty payment on T‑Mobile for offering that service. In ACM’s opinion this “zero rating” service violated Dutch net neutrality rules. Those rules prohibit any form of tariff differentiation by telecom providers. However, the District Court of Rotterdam ruled in a judgment of 20 April 2017 that Dutch law (Section 7.4a(3) of the Telecommunications Act) is “indisputably” in conflict with the European Net Neutrality Regulation on this point (see also this blog). It therefore overturned ACM’s decision. ACM is currently investigating whether the “Data-free Music” service is in accordance with the European Net Neutrality Regulation. ACM announced in its 2016-2017 annual report that it will next year also be investigating whether contracts of telecom providers are in accordance with the transparency requirements set out in the Net Neutrality Regulation.
Market analyses
For some time now there has been a (tentative?) trend towards less ex ante regulation based on market analysis decisions (see also our earlier blog). Early this year, for instance ACM already withdrew its draft decision regarding Wholesale High-quality Access (WHA). In respect of WHA a distinction can be made between access to the copper network and access to the fibre-optic network. ACM decided to withdraw its draft decision on the grounds of objections raised by the European Commission. BEREC subscribed to those objections. In its WHA draft market analysis decision, ACM concluded that KPN wielded significant market power. To remedy the competition problems established, ACM imposed obligations on KPN with regard to the copper network. ACM therefore did not consider it necessary to impose obligations on KPN with regard to high-quality wholesale access over FttO and FttH. But the Commission even considered the obligations with regard to the copper network to be too drastic. In its market analysis decision regarding the upstream market for ODF access (FttO), ACM even concluded that KPN did not wield significant market power. Business fibre-optic access is therefore entirely unregulated at present. Several parties have filed an appeal against the decision not to regulate the market for ODF access (FttO). The key question in those appeal proceedings, the hearing in which has been scheduled for the end of this calendar year, will be whether ACM rightly decided not to regulate this market.
The Trade and Industry Appeals Tribunal (the “Tribunal”) was furthermore about to pass final judgment in the protracted MTA IV proceedings. The European Court of Justice had already issued a preliminary ruling in those proceedings. The key question in the proceedings was whether the Pure BULRIC model (in which only incremental costs are reimbursed) or the Plus BULRIC model (in which, in addition to the fee for incremental costs, a mark-up for common and collective costs is also applied) had to be applied. Although the Tribunal in 2011 annulled the tariff caps set by ACM on the basis of Pure BULRIC and based the tariff regulation on Plus BULRIC, it recently ruled that ACM has now rightly applied Pure BULRIC. This final judgment of the Tribunal in MTA IV therefore appears to have put an end to lengthy litigation on the question whether Pure BULRIC or Plus BULRIC should be used as the model for determining call termination rates. ACM had anticipated such an outcome: even before the Tribunal had issued its final ruling, ACM had already adopted its MTA V decision, in which it confirmed that it opted for Pure BULRIC.
A pending market investigation that is generating a great deal of interest is the telecom market analysis, a broadly formulated survey of the access possibilities of the various telecom networks. The immediate reason for that market analysis is the European Commission’s approval of the merger between Vodafone and Ziggo, since that approval has made it possible for Vodafone/Ziggo to combine fixed services (Internet, telephone and television) with mobile telephony (quadruple play). In the past only KPN was able to offer quadruple play on a large scale. However, ACM’s investigation on the impact on the telecom market of offering bundled services in the form of all-in-one packages has so far demonstrated that there is sufficient competition in the provision of bundled telecom products.
Click here for an up-to-date summary of the regulation of telecom markets in the Netherlands.
Content
ACM this year also investigated the combining of premium and other channels in packages. It did so in response to an enforcement request of cable provider CAIW, which argued that Fox Sports Eredivisie did not apply the same conditions to Ziggo on the one hand and other content distributors on the other hand. Those new conditions of Fox provide that the distributor, in this case CAIW, pays Fox a fixed amount per television customer, regardless of whether that customer purchases Fox Sports Eredivisie. ACM ruled in its decision of 7 July 2017 that Fox’s actions do not harm consumers because distributors do not compete on the basis of individual channels, but rather on the basis of the price of entire packages.
This was not the first time that Fox’s conditions had been under discussion. The agreement between Fox and KPN ended in the summer of 2016. Although Fox wished to continue its relationship with KPN, it proposed a change that would require KPN (in the same way as CAIW) to pay a minimum fee based on KPN’s total number of television customers. But KPN wanted Fox to apply the same conditions as in the past. Those conditions provided that KPN (like its main competitor Ziggo) was required to pay Fox a fee only for the number of customers that purchased the channels in question from Fox. The District Court of Midden Nederland ruled in favour of Fox and found that the agreement between Fox and KPN did not have to be extended on the basis of the existing conditions.
