wholesale price definition

1 Bijlage ACT Position Paper Cluster Vaste Telefonie Marktanalyse proces OPTA mbt relevante markten, aanmerkelijke marktmacht en op te leggen verplichtingen aan partij(en) met AMM in de markt(en) voor vaste telefonie Combinatie van remedies van belang. Retail Fixed Public Networks Access Analogue to 1* ISDN2 >1 * ISDN2 to business ISDN30 Call Origination Local calls/national calls Residential - SMP KPN Business – SMP Market EU Recommendation 1, 2 Competition problems Remedies Remarks KPN Number porting tariff excessive and prohibitive for customer switch Number porting tariff excessive and prohibitive for customer switch Price squeeze – absence of definition of minimum tariff Cost-oriented tariff to be truly wholesale costs only, separated from retail costs Cost-oriented tariff to be truly wholesale costs only, separated from retail costs   Require end-user tariff to be approved by regulator Price squeeze test incl. new entrants costs + cost of interconnect + margin Price squeeze test to include “discounts” Procedure to require AMM to supply information, for example full set of customer contracts Accounting separation Not applica ble KPN KPN 1, 2 KPN 1,2, 3, 4 Current so-called cost-oriented tariff excessive, compare EU countries Current so-called cost-oriented tariff excessive, compare EU countries Price squeeze test as in current framework insufficient    2 Price squeeze – margin squeeze retail / wholesale Bundling/tying Cross-subsidisation Interoperability 06760 numbers As result of changes in wholesale tariffs the margin can be squeezed: prohibit by link to definition of minimum retail tariff  Prohibit price squeeze on certain services by requiring publication by AMM of such offers, at least to the NRA;  Accounting separation  Accounting separation;  requirements to publisch retail and wholesale offers and specific contracts and bills to customers, at least to the NRA;  price squeeze tests Adjust law to include interoperability of 06760 numbers, OPTA to issue guidelines Price squeeze test as in current framework insufficient International calls Wholesale Fixed Public Networks Access - - 5, 6 Analogue to 1*ISDN2 > 1*ISDN2 to business ISDN30 KPN KPN KPN KPN .. .. This market currently does not exist 3 Call Origination Local Regional (geo, NGN incl. 06760 MIACO and originating part in “termination model”, 088, etc) incl. transit KPN KPN KPN KPN 8 8 Denial of access  Access + to include necessary facilities to interconnect i.e. ports, carrier systems, colocation (conditions & pricing),  Reference Offer plus procedure to update RO to be speedy and to include check of conditions and tariffs through the year;  non-discrimination.  incl. billing and incasso essential functionality in 06760 (terminating model) and 800/900 Cost-orientation Adjust law to include interoperability to 06760 numbers, OPTA to issue “Richtsnoeren”  Reference Offer (conditions, tariffs, necessary facilities, SLA) plus procedure to update RO to be speedy and to include check of conditions and tariffs.  Before AMM to offer retail services,   Current CPS obligations to continue more focus on transparent procedures in CLI provisioning process (denial of KPN to provision CPS for certain CLI’s, loss of CPS on certain CLI’s) Price discrimination, excessive pricing, retention not costoriented Interoperabiliteit to 06760 numbers Withholding information 4 Wholesale price squeeze – absence of minimum national tariffs Delaying tactics Bundling/tying of regulated and not regulated services (for instance Rent-a-Switch) absolute necessity to have RO wholesale services completely reviewed and ready for delivery.  Procedure to require AMM to provide information. If OPTA were to find national market competitive, still necessity for national tariffs of AMM party of regional services, since AMM party needs to be prohibited from offering national services at below cost  still set a national tariff RO with SLA, investigation possibilities, AMM party to answer to requests for information within x working days, AMM party to offer retail services as wholesale services RO review is ready and service ready for delivery  Prohibit price squeeze by requiring RO and publication by AMM of such offers, at least to the NRA;  depending on the case implying nondiscrimination whereby same offer needs to be 5 Undue requirements by AMM/overinvestment, for instance requiring entrants to interconnect in a certain way and then change these conditions (Rent-a-Switch); for instance requiring bank guarantee; for instance require billing for 800/900 or 06760 Quality discrimination Strategic design made to non-AMM parties; accounting separation Undue requirements/ overinvestment to be reviewed in RO consultation, prohibit undue requirement/ overinvestment National (geo, NGN) incl. transit KPN KPN 8 Undue use of information for example CPS customers to receive offer from AMM 800/900 different conditions for buying originating services between KPN/SNT (no transit payment) and OLO’s Wholesale 06760 origination in collecting model: so-called retention for origination and billing and incasso is excessive Denial of access RO incl. SLA RO conditions to be reviewed in open market consultation whereby NRA answers to all comments by interested parties Undue use of information, burden of proof on AMM Non-discrimination Cost-oriented retention   Access + to include necessary facilities to interconnect i.e. ports, carrier systems, colocation (conditions & pricing), Reference Offer plus Currently no max to the KPN retention  excessive and unpredictable  Current CPS obligations to continue  more focus on transparent procedures in CLI provisioning 6 Price discrimination, excessive pricing, retention not costoriented Withholding information procedure to update RO to be speedy and to include check of conditions and tariffs through the year;  non-discrimination.  incl. billing and incasso essential functionality in 06760 (terminating model) and 800/900 Cost-orientation  Reference Offer (conditions, tariffs, necessary facilities, SLA) plus procedure to update RO to be speedy and to include check of conditions and tariffs.  Before AMM to offer retail services, absolute necessity to have RO wholesale services completely reviewed and ready for delivery.  Procedure to require AMM to provide information. If OPTA were to find national market competitive, still necessity for national tariffs of AMM party of regional services, process (denial of KPN to provision CPS for certain CLI’s, loss of CPS on certain CLI’s) Wholesale price squeeze – absence of minimum national tariffs 7 Delaying tactics Bundling/tying of regulated and not regulated services (for instance Rent-a-Switch) Undue requirements by AMM/overinvestment, for instance requiring entrants to interconnect in a certain way and then change these conditions (Rent-a-Switch); for instance requiring bank guarantee; for instance require billing for 800/900 or 06760 Quality discrimination since AMM party needs to be prohibited from offering national services at below cost  still set a national tariff RO with SLA, investigation possibilities, AMM party to answer to requests for information within x working days, AMM party to offer retail services as wholesale services RO review is ready and service ready for delivery  Prohibit price squeeze by requiring RO and publication by AMM of such offers, at least to the NRA;  depending on the case implying nondiscrimination whereby same offer needs to be made to non-AMM parties; accounting separation Undue requirements/ overinvestment to be reviewed in RO consultation, prohibit undue requirement/ overinvestment RO incl. SLA 8 Strategic design Undue use of information for example CPS customers to receive offer from AMM 800/900 different conditions for buying originating services between KPN/SNT (no transit payment) and OLO’s Call Termination Local Regional incl. Transit KPN KPN KPN KPN 9 9, 10 Denial of access RO conditions to be reviewed in open market consultation whereby NRA answers to all comments by interested parties Undue use of information, burden of proof on AMM Non-discrimination  Price discrimination, excessive pricing, retention not costoriented Withholding information Access + to include necessary facilities to interconnect i.e. ports, carrier systems, colocation (conditions & pricing),  Reference Offer plus procedure to update RO to be speedy and to include check of conditions and tariffs through the year;  non-discrimination.  incl. billing and incasso essential functionality in 06760 (terminating model) and 800/900 Cost-orientation  Reference Offer (conditions, tariffs,   Current CPS obligations to continue more focus on transparent procedures in CLI provisioning process (denial of KPN to provision CPS for certain CLI’s, loss of CPS on certain CLI’s) 9 Wholesale price squeeze – absence of minimum national tariffs Delaying tactics Bundling/tying of regulated necessary facilities, SLA) plus procedure to update RO to be speedy and to include check of conditions and tariffs.  Before AMM to offer retail services, absolute necessity to have RO wholesale services completely reviewed and ready for delivery.  Procedure to require AMM to provide information. If OPTA were to find national market competitive, still necessity for national tariffs of AMM party of regional services, since AMM party needs to be prohibited from offering national services at below cost  still set a national tariff RO with SLA, investigation possibilities, AMM party to answer to requests for information within x working days, AMM party to offer retail services as wholesale services RO review is ready and service ready for delivery  Prohibit price squeeze 10 and not regulated services (for instance Rent-a-Switch) Undue requirements by AMM/overinvestment, for instance requiring entrants to interconnect in a certain way and then change these conditions (Rent-a-Switch); for instance requiring bank guarantee; for instance require billing for 800/900 or 06760 Quality discrimination Strategic design by requiring RO and publication by AMM of such offers, at least to the NRA;  depending on the case implying nondiscrimination whereby same offer needs to be made to non-AMM parties; accounting separation Undue requirements/ overinvestment to be reviewed in RO consultation, prohibit undue requirement/ overinvestment Undue use of information for example CPS customers to receive offer from AMM 800/900 different conditions for buying originating services between KPN/SNT (no transit payment) and OLO’s Wholesale 06760 origination in collecting model: so-called retention for origination and RO incl. SLA RO conditions to be reviewed in open market consultation whereby NRA answers to all comments by interested parties Undue use of information, burden of proof on AMM Non-discrimination Cost-oriented retention Currently no max to the KPN retention  excessive and 11 National incl. transit KPN KPN 9, 10 billing and incasso is excessive Denial of access  Price discrimination, excessive pricing, retention not costoriented Withholding information Access + to include necessary facilities to interconnect i.e. ports, carrier systems, colocation (conditions & pricing),  Reference Offer plus procedure to update RO to be speedy and to include check of conditions and tariffs through the year;  non-discrimination.  incl. billing and incasso essential functionality in 06760 (terminating model) and 800/900 Cost-orientation  Reference Offer (conditions, tariffs, necessary facilities, SLA) plus procedure to update RO to be speedy and to include check of conditions and tariffs. Before AMM to offer retail services, absolute necessity to have RO wholesale services completely reviewed and ready for delivery. unpredictable  Current CPS obligations to continue  more focus on transparent procedures in CLI provisioning process (denial of KPN to provision CPS for certain CLI’s, loss of CPS on certain CLI’s)  12  Wholesale price squeeze – absence of minimum national tariffs Delaying tactics Bundling/tying of regulated and not regulated services (for instance Rent-a-Switch) Undue requirements by AMM/overinvestment, for Procedure to require AMM to provide information. If OPTA were to find national market competitive, still necessity for national tariffs of AMM party of regional services, since AMM party needs to be prohibited from offering national services at below cost  still set a national tariff RO with SLA, investigation possibilities, AMM party to answer to requests for information within x working days, AMM party to offer retail services as wholesale services RO review is ready and service ready for delivery  Prohibit price squeeze by requiring RO and publication by AMM of such offers, at least to the NRA;  depending on the case implying nondiscrimination whereby same offer needs to be made to non-AMM parties; accounting separation Undue requirements/ overinvestment to be 13 instance requiring entrants to interconnect in a certain way and then change these conditions (Rent-a-Switch); for instance requiring bank guarantee; for instance require billing for 800/900 or 06760 Quality discrimination Strategic design reviewed in RO consultation, prohibit undue requirement/ overinvestment Undue use of information for example CPS customers to receive offer from AMM 800/900 different conditions for buying originating services between KPN/SNT (no transit payment) and OLO’s NGN 06760 in “termination model” Telco’s Telco’s 9 9 RO incl. SLA RO conditions to be reviewed in open market consultation whereby NRA answers to all comments by interested parties Undue use of information, burden of proof on AMM Non-discrimination 14 Relevante markt (richtsnoeren commissie voor de marktanalyse en beoordeling van amm) Substitutie vraagzijde Substitutie aanbodzijde Geografische markt Aanmerkelijke marktmacht (richtsnoeren commissie voor de marktanalyse en beoordeling van amm) Marktaandeel Totale omvang onderneming Controle over niet gemakkelijk te dupliceren infrastructuur Technologische voorsprong of superioriteit Ontbreken van kopersmarkt als tegenwicht Gemakkelijke toegang tot financiele middelen Product/dienstdiversificatie (bijv. bundeling) Schaalvoordelen Breedtevoordelen Verticale integratie Sterk ontwikkeld distributie-en verkoopnetwerk Ontbreken van potentiele concurrentie Competition problems (ERG Common Position) Refusal to deal/denial of access Discriminatory use or withholding information Delaying tactics Bundling/tying Undue requirements Quality discrimination Undue use of information about competitors Price discrimination Cross-subsidisation Predatory pricing Strategic design of product (to raise consumers’switching costs) Contract terms to raise consumers’switch cost Exclusive dealing Over-investment Excessive pricing 15 Lack of investment Excessive costs/inefficiency Low quality Tacit collusion Effects First mover advantage Margin squeeze Raising rival’s costs Restriction of competition sales Foreclosure Remedies Transparency – RO, obligation to have any new service reviewed (conditions and pricing) and consulted/published Non-discrimination Accounting separation Access Price control and cost accounting … General: burden of proof on AMM Proportionality: least burdensome effective remedy A second principle is that, where infrastructure competition is not likely or feasible, due to the persistant presence of bottlenecks associated with significant economies of scale or scope or other restrictions, NRA’s will need to ensure that there is sufficient access to wholesale inputs….