UKE, the Polish communications regulator, recently found itself the subject of the EC’s new regulatory powers twice in as many weeks.

 

On November 7, the EC wrote to the UKE to express serious doubts regarding its proposed regulation of mobile number terminations (MTRs). In doing so it exercised for the first time the new powers granted under Article 7a of the 2009 reform of the EU Telecoms Framework Directive. The EC questioned the regulator’s decision not to formally regulate MTRs, and argued that its proposed approach would create uncertainty, result in higher charges, and make a single market even more unreachable.

 

Later that month, the EC intervened again, this time to prevent the UKE setting MTRs for a new mobile network operator (MNO), Aero2, without any formal analysis. On January 12 and 13, the UKE withdrew its notifications concerning the proposed regulation of operators PTC, PTK, Polkomtel, and P4, as well as that of Aero2. The regulator must now develop new draft measures, taking the utmost account of the comments it has received, or face having the EC at its door for a third time.

 

In 2009 the EC gained controversial new powers that gave it oversight of regulatory remedies. Its role had previously been limited to challenging market definition and SMP designation, and the choice of remedies to correct the abuse of dominance had been left entirely up to national regulators. The EC’s expression of serious doubts regarding the UKE’s draft measures followed the amended Article 7 procedure, which came into force in May 2011. When it has such doubts concerning regulatory measures, the EC may now undertake an in-depth review that can last up to three months.

 

It is not surprising that the EC has used these powers for the first time in a market analysis decision relating to mobile termination rates. It is an area that has seen considerable divergence across Europe, and in which national circumstances cannot always explain away the huge variation in fees charged by mobile operators. The UKE is expected to work closely with the EC and BEREC on potential modifications to its draft measures, and on ensuring their full compliance with EU law and objectives.

 

On October 4 the UKE notified the EC of its latest round of market 7 analysis for PTC, PTK, Polkomtel, and P4. In addition to the usual set of remedies, the UKE proposed not imposing a legally binding price control, but instead publishing non-binding (i.e. recommended) MTRs on its website. The UKE intended to allow operators to negotiate MTRs among themselves, and planned to intervene only if no agreement was reached after a 60-day period.