The European Commission has opened an in-depth investigation into the Portuguese telecoms regulator's (ANACOM's) plans to refrain from granting regulated local or central access to the fibre lines of MEO (Portugal's incumbent telecoms operator), in parts of the country where there is little prospect of alternative infrastructure deployment. In particular, the Commission has concerns that, if implemented, ANACOM's proposal could impede sustainable competition in the broadband markets.

In its draft decision, ANACOM conducted an analysis of the retail and wholesale markets for broadband services. It found that MEO has significant market power (SMP) on both the local and the central wholesale access markets for broadband (covering all technologies: copper, fibre and cable)

Under the EU Framework and Access Directives, telecoms regulators can decide to impose specific remedies on operators with SMP to allow alternative operators to more easily deploy their own infrastructure and to compete more effectively with them for consumers. These remedies typically include the obligation to provide proportionate access for alternative operators to specific elements of the network.

ANACOM found that the Portuguese territory can be split into two separate geographic retail markets: "competitive" parishes (mostly urban areas where alternative operators are present with significant coverage of next generation networks and/or a limited market share by MEO) and "non-competitive" parishes (mostly rural, where MEO is by far the strongest provider of broadband services).

ANACOM proposes to impose on a national basis access to MEO's copper loop, ducts and poles and subsidiary access to dark fibre (where there is no space in ducts and poles). It also proposes to impose upon MEO the provision of bitstream services over its copper network in the non-competitive areas. However, despite the growing competitive significance of fibre (30% of Portuguese subscribers have tariff plans providing 100 Mbps or more), ANACOM proposes not to regulate access to MEO's fibre network.

The Commission acknowledges that in the more competitive urban areas, the regulated access to MEO's ducts has greatly facilitated the deployment of alternative fibre networks, and thus also indirectly favoured efficient co-investment by alternative operators with MEO. The Commission has not criticised the non-regulation of MEO's fibre in these areas. On the other hand, the Commission believes that ANACOM's intention not to regulate access to MEO's fibre network in the "non-competitive" areas is contrary to the provisions of EU telecoms rules. Despite the very limited economic prospects that alternative operators could independently deploy their own fibre in less densely populated areas in the short or medium term, ANACOM has not provided a sufficiently substantiated justification as to why not regulating fibre access would foster a sustainable competitive market at retail level and represent an acceptable balance between the objectives of competition and efficient investment in end-users' interest. Nor has ANACOM explained how the commercial wholesale fibre access offer by MEO could be considered sufficient to enable sustainable competition.

The Commission now has three months to discuss the case with ANACOM, in close cooperation with the body of European regulators (BEREC), in order to remove any elements giving rise to serious doubts as to compliance with EU law. The Commission may, at the end of the investigation period, either lift its reservations or issue a Recommendation under Article 7a of the Framework Directive, which will require ANACOM to amend or withdraw its draft measure. If ANACOM does not amend or withdraw its draft measure accordingly, in the absence of a valid reasoned justification, the Commission could reserve its right to assess whether to consider other legal measures available.

Find more information on article 7 procedures.

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