The telecom sector was particular eventful in 2016. For example, last summer the European Commission granted approval for the incorporation of the joint venture Vodafone/Ziggo (see also this blog). This transaction will fundamentally change the telecom landscape in the Netherlands. In addition, the Trade and Industry Appeals Tribunal (“CBb”) handed down interesting judgments in a number of cases last year.
On 13 May 2016, the CBb issued a decision in long drawn-out proceedings relating to OT2010, a tender process for the purchase of fixed-line telecommunication services in 2010. These proceedings centred around the question whether KPN had breached its non-discrimination obligation. Tele2 argued this was the case because 69 hours before the tender deadline, KPN announced an internal discount campaign to the retail department of its company, while it announced this discount campaign only one hour before the tender deadline to its external customers (including Tele2). The contract was initially provisionally awarded to KPN, but this award decision was later withdrawn as a result of the first (partial) decision of (what was then called) OPTA. In that decision, OPTA determined that KPN had breached the non-discrimination obligation. Subsequently, the tender was awarded provisionally to Tele2, but this was again withdrawn. This time as result of a ruling by The Hague Court of Appeal, which found that the reasons for excluding KPN were inadequate as the specifications of the tender document did not include a ground for exclusion. The tender was then again provisionally awarded to KPN. Meanwhile, OPTA determined in its second and last decision that KPN had in fact not breached its non-discrimination obligation, but the decision of the Court of Appeal to provisional award the tender to KPN was not upheld. A series of decisions and rulings followed. Last year, the CBb stated in its final ruling that KPN had not breached its non-discrimination obligation and declared Tele2's appeal unfounded. This conclusion appears to have brought the long-running proceedings to an end.
On 21 November 2016, the CBb furthermore issued a decision on certain KPN transit rates. This ruling followed the judgment of the European Court of Justice in which it discussed preliminary questions asked by the CBb. The CBb ruled that the Dutch Authority for Consumers & Markets (”ACM”) should not have imposed a penalty on KPN for charging transit tariffs to information numbers. The CBb argued that ACM should not have imposed an order subject to an incremental penalty on KPN, as the transit tariffs only concerned a small part of the total call charges. According to the CBb, ACM did not attach sufficient importance to the fact that its decision on transit rates intervened in the principle of contractual freedom between providers in an actual competitive market for call transmission. In addition, KPN argued that the tariff regulation for transmission services for non-geographical numbers obstructed its possibilities to compete in this market. When balancing KPN's interests and the expected return on ACM's decision, the CBb arrived at the conclusion that the decision did not fulfil the demands of necessity and proportionality.
Market analyses
A number of ACM's market analysis decisions are on the agenda for 2017. The establishment of the joint venture between Vodafone and Ziggo, for example, occasioned a preliminary inquiry regarding a new market analysis by ACM. A key subject of the preliminary inquiry is the development of access options of the different telecom networks (copper, cable, fibre optic) and the impact of technical progress. Moreover, the CBb is expected to issue judgments on some of these market analysis decisions this year. For an overview, see the update of the regulation chart in this blog.
In addition, in an earlier blog we reported that the CBb had submitted a request for a preliminary ruling to the European Court of Justice in the appeal proceedings resulting from ACM's market analysis decision on fixed-line and mobile call transmission (”FTA-MTA”). On 15 September 2016, the Court of Justice replied to these requests for a preliminary ruling. The essence of the Court of Justice's ruling was that the national regulators may deviate from the Recommendation on termination rates. It is now up to the CBb to make the next move. The final ruling in this matter is expected in April of this year. This ruling is not only important for the fourth regulatory period to which ACM's decision belonged, but also for the upcoming fifth regulatory period. ACM has already published its draft decision on FTA-MTA V for consultation by market participants. ACM intends to put the final version of this market analysis decision into effect on 1 May 2017.
Net neutrality
In an earlier blog we reported that the Regulation on net neutrality and roaming (the “Regulation”) had been enacted and that the Dutch legislator had started legislative amendments in this context. The Regulation stipulates that internet access services providers may not impose restrictions on video traffic (or access to it), such as YouTube or Netflix content. Furthermore, it is up to customers themselves to decide what equipment they use for internet access. We have discussed these new rules before in this blog. In the meantime, amendments to the Telecommunications Act in order to comply with the Regulation were published on November 2, 2016. The legislative amendments have already entered into force with retroactive effect. Consequently, ACM is authorised to enforce the Regulation with regard to any breaches that have occurred in the period after April 30, 2016. ACM already began to enforce the obligations arising from the (Telecommunications Act after implementation of the) Regulation, when ACM imposed an incremental penalty on T-Mobile in an attempt to block T-Mobile’s offers for Data-free Music in late 2016. According to ACM, T-Mobile was acting in breach of net neutrality rules by offering a service in which music streaming does not affect the data bundle. T-Mobile has appealed against this decision. One of the questions that will be at issue in these proceedings is whether Dutch law did not implement the Regulation correctly. T-Mobile argues that the Data-free Music service does not contravene the Regulation since the Regulation leaves room for exceptions, while the Telecommunications Act does not allow for such exceptions.
