COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 10.12.1996 
COM(96) 649 final 
DRAFT 
COMMUNICATION FROM THE COMMISSION 
ON THE APPLICATION OF THE COMPETITION RULES 
TO ACCESS AGREEMENTS 
IN THE TELECOMMUNICATIONS SECTOR 
Framework, Relevant Markets and Principles 

Notice by the Commission concerning a draft Notice on the application of the 
competition rules to access agreements in the telecommunications sector 
The Commission approved a draft Notice on the application of the competition rules to 
access agreements in the telecommunications sector. 
The Commission intends to adopt the Notice after having heard any comments from 
interested parties. 
The Commission invites interested parties to submit their possible observations they may 
have on the draft Notice published hereunder. 
Observations must reach the Commission not later than two months following the date 
of this publication. Observations may be sent to the Commission by fax (No (32 2) 296 
98 19) or by mail to the following address: 
European Commission 
Directorate-General for Competition (DG IV) 
Directorate C 
Office 3/48 
150 Avenue de Cortenberg/Kortenberglaan 150 
B-1049 Brussels 
email: access.notice@dg4.cec.be 
Draft 
TABLE OF CONTENTS 
INTRODUCTION 1 
PART I : FRAMEWORK 4 
1. Competition Rules and Sector Specific Regulation 4 
2 Commission Action in Relation to Access Agreements 8 
3. Complaints 8 
3.1 Use of national and ONP procedures 
3.2 Safeguarding complainant's rights 
3.3 Interim measures 
4. Own-Initiative Investigation and Sector Inquiries 11 
5. Fines 11 
Part II: Relevant Markets 13 
1. Relevant product market 13 
1.1. Services market 
1.2 Access to facilities 
2. Relevant geographic market 15 
Part III: Principles 17 
1. Dominance (Article 86) 18 
1.1. Services market 
1.2 Access to facilities 
1.3 Joint dominance 
2. Abuses of Dominance 23 
2.1 Refusal to grant access to essential facilities and application of 
unfavourable terms 
2.2 Other forms of abuse 
2.3 Abuses of joint dominance 
3. Access agreements (Article 85) 31 
4. Effect on trade between Member States 34 
Conclusions 35 
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INTRODUCTION 
1. The timetable for full liberalization in the telecommunications sector has now been 
established, and Member States are to remove the last barriers to the provision of 
telecommunications services in a competitive environment to consumers by 1 January 
19981. As a result of this liberalization a second set of related products or services 
will emerge as well as the need for access to facilities necessary to provide these 
services. In this sector, interconnection to the public switched telecommunications 
network is a typical example of such access. The Commission has stated that it will 
define the treatment of access agreements under the competition rules". This Notice, 
therefore, addresses the issue of how competition rules and procedures apply to access 
agreements in the context of harmonised EU and national regulation in the 
telecommunications sector. 
2. The regulatory framework for the liberalization of telecommunications consists of the 
liberalization directives issued under Article 90 EC and the Open Network Provision 
(ONP) framework. The ONP framework provides harmonised rules for access and 
interconnection to the telecommunications networks and the voice telephony services. 
The legal framework provided by the liberalization and harmonization legislation is 
the background to any action taken by the Commission in its application of the 
competition rules. Both the liberalization legislation and the harmonization 
legislation are aimed at ensuring the attainment of the objectives of the Community 
According to Directive 96/19/EC and 96/2/EC, certain Member States may request a derogation 
from full liberalisation for certain limited periods. See: Commission Decision of 27 November 
1996 concerning the additional implementation periods requested by Ireland for the 
implementation of Commission Directives 90/388/EEC and 96/2/EC as regards full competition 
in the telecommunications markets. This Notice is without prejudice to such derogations, and 
the Commission will take account of the existence of any such derogation when applying the 
competition rules to access agreements, as described in this Notice. 
Communication by the Commission to the European Parliament and the Council, 
Consultation on the Green Paper on the liberalisation of telecommunications 
infrastructure and cable television networks, COM (95) 158 final, 3 May 1995. 
Commission Directive 88/301/EEC, on competition in the markets in 
telecommunications terminal equipment, OJ L131/73 (1988); 
Commission Directive 90/388/EEC, on competition in the markets for 
telecommunications services, OJ L 192/10 (1990); 
Commission Directive 94/46/EC, amending Directive 88/301/EEC and Directive 
90/388/EEC in particular with regard to satellite communications, OJ L 268/15 (1994); 
Commission Directive 95/51/EC, amending Directive 90/388/EEC with regard to the 
abolition of the restrictions on the use of cable television networks for the provision of 
already liberalised telecommunications services, OJ L 256/49 (1995); 
Commission Directive 96/2/EC, amending Directive 90/388/EEC with regard to mobile 
and personal communications, OJ L 20/59 (1996); 
Commission Directive 96/19/EC, amending Directive 90/388/EEC with regard to the 
implementation of full competition in the telecommunications markets, OJ L 74/13 
(1996). 
Interconnection agreements are the most significant form of access agreement in the 
(continued...) 
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as laid out in Article 3 EC, and specifically, the establishment of "a system ensuring 
that competition in the internal market is not distorted" and "an internal market 
characterised by the abolition, as between Member States, of obstacles to the free 
movement of goods, persons, services and capital". 
The Commission has published Guidelines on the application of EEC competition 
rules in the telecommunications sector, OJ C 233/2 (1991). The present Notice is 
intended to build on those Guidelines, which do not deal explicitly with access issues. 
In the telecommunications sector, liberalization and harmonization legislation permit 
and simplify the task of Community firms in embarking on new activities in new 
markets and consequently allow users to benefit from increased competition. These 
advantages must not be jeopardised by restrictive or abusive practices of undertakings: 
the Community's competition rules are therefore essential to ensure the completion of 
this development. New entrants must in the initial stages be ensured the right to have 
access to the networks of incumbent telecommunications operators (TOs). Several 
authorities, at the regional, national and Community levels, have a role in regulating 
this sector. If the competition process is to work well in the Internal Market, effective 
coordination between these institutions must be ensured. 
Part I of the Notice sets out the legal framework and details how the Commission 
intends to achieve its intention of avoiding unnecessary duplication of procedures 
while safeguarding the rights of undertakings and users under the competition rules. 
In this context, the Commission's efforts to encourage decentralised application of the 
competition rules by national courts and national authorities aim at achieving remedies 
at a national level, unless a significant Community interest is involved in a particular 
case. In the telecommunications sector, specific procedures in the ONP framework 
likewise aim at resolving access problems in the first place at a decentralised, national 
level, with a further possibility for conciliation at Community level. Part II defines the 
Commission's approach to market definition in this sector. Part III details the 
principles that the Commission will follow in the application of the competition rules: 
(...continued) 
telecommunications sector. A basic framework for interconnection agreements is set 
up by the rules on Open Network Provision (ONP), and the application of competition 
rules must be seen against this background: 
Council Directive 90/387/EEC, on the establishment of the internal market for 
telecommunications services through the implementation of open network provision, 
OJ L 192/1 (1990) 
Council Directive 92/44/EEC, on the application of open network provision to leased 
lines, OJL 165/27(1992); 
European Parliament and Council Directive 95/62/EC, on the application of open 
network provision to voice telephony, OJ L 321/6 (1995); 
Common Position for a European Parliament and Council Directive on interconnection 
in telecommunications with regard to ensuring universal service and interoperability 
through application of the principles of open network provision (ONP), OJ C220/13, 29 
July 1996. 
Proposal for a European Parliament and Council Directive amending Council Directives 
90/387/EEC and 92/44/EEC for the purpose of adaptation to a competitive environment 
in telecommunications, Com(95) 543 final, 14.11.1995. 
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it aims to help telecommunications market participants shape their access agreements 
by explaining the competition law requirements. 
6. The Notice is based on the Commission's experience in several cases,5 and certain 
studies into this area carried out on behalf of the Commission . 
7. This Notice does not in any way restrict the rights conferred on individuals or 
undertakings by Community law, and is without prejudice to any interpretation of the 
Community competition rules that may be given by the Court of First Instance or the 
European Court of Justice. 
In the telecommunications area, notably Commission decision of 18 October 1991, 
Eirpaqe, OJ L 306/22 (1991), and Commission decisions of 17 July 1996, Atlas and 
Phoenix, OJ L 239/23 and 57 (1996). There are also a number of pending cases 
involving access issues. 
Competition aspects of interconnection agreements in the telecommunications sector, 
June 1995; Competition aspects of access by service providers to the resources of 
telecommunications operators, December 1995. See also Competition Aspects of 
Access Pricing, December 1995. 
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PART I : FRAMEWORK 
1. Competition Rules and Sector Specific Regulation 
Access problems in the broadest sense of the word (e.g. provision of leased lines, 
interconnection to networks, access to data concerning subscribers to voice telephone 
services) can be dealt with at different levels and on the basis of a range of legislative 
provisions, of both national and Community origin. A service provider faced with an 
access problem such as a TO's unjustified refusal to supply (or on reasonable terms) 
a leased line needed by the applicant to provide services to its customers could 
therefore contemplate a number of routes to seek a remedy. Generally speaking, 
aggrieved parties will experience a number of benefits, at least in an initial stage, in 
seeking redress at a national level. At a national level, the applicant has two main 
choices, namely (1) specific national regulatory procedures now established in 
accordance with Community law and harmonised under Open Network Provision (see 
footnote 4) and (2) an action under national and/or Community law before a national 
court or national competition authority . 
Complaints made to the Commission under the competition rules in the place of or in 
addition to national courts, national competition authorities and/or to national 
regulatory authorities under ONP procedures will be dealt with according to the 
priority which they deserve in view of the urgency, novelty and transnational nature 
of the problem involved and taking into account the need to avoid duplicate 
proceeding (see below, points 13 et seq.). 
In the case of the ONP leased line directive, ONP foresees the first stage which allows 
the aggrieved user to appeal to the National Regulatory Authority. This can offer a 
number of advantages. In the telecommunications areas where experience has shown 
that companies are often hesitant to be seen as complainants against the TO on 
which they heavily depend not only with respect to the specific point of conflict but also 
a much broader and far-reaching sense, the procedures foreseen under ONP are an 
attractive option. ONP procedures furthermore can cover a broader range of access 
problems than could be approached on the basis of the competition rules. Finally, 
these procedures can offer users the advantage of proximity and familiarity with 
national administrative procedures; language is also a factor to be taken into account. 
Under ONP procedures, if matters cannot be resolved at the national level, a second 
stage is organised at the European level (conciliation procedure). Pursuant to the ONP 
leased line directive, an agreement between the parties involved must then be reached 
within two months, with a possible extension of one month if the parties agree. 
It should be noted that in the Proposed ONP interconnection directive, as opposed to 
the leased line directive, a conciliation procedure is foreseen for transfrontier cases 
only, that is interconnection disputes in which more than one National Regulatory 
Authority is involved. If the National Regulatory Authorities dealing with an 
interconnection problem do not reach a solution to the problem, then one of them may 
notify the Commission thereof and invoke the conciliation procedure (Article 17 of the 
Proposed directive). 
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9. The Commission recognises that National Regulatory Authorities have different tasks, 
and operate in a different legal framework to the Commission. First, the NRAs 
operate under national law, albeit often implementing European law. Secondly, that 
law, based as it is on considerations of telecommunications policy has objectives 
different to, but consistent with, the objectives of Community competition policy. The 
Commission cooperates as far as possible with the National Regulatory Authorities, 
and invites the National Regulatory Authorities to cooperate as far as possible between 
themselves. Under Community law, national authorities, including regulatory 
authorities and competition authorities, have a duty not to approve a practice or 
agreement contrary to Community competition law. 
10. Community competition rules are not sufficient to remedy the various problems in the 
telecommunications sector. NRAs therefore have a significantly wider ambit and a 
significant and far-reaching role in the regulation of the sector. It should also be 
noted that as a matter of Community law, the NRAs must be independent. 
11. It is also important to note that the ONP framework imposes certain obligations on 
national telecommunications operators that go beyond those that would normally be 
imposed by Article 86 EC. NRAs may require strict standards relating to 
transparency, obligations to supply and pricing practices. These obligations can be 
enforced by the National Regulatory Authorities, which also have jurisdiction to take 
steps to ensure effective competition °. 
12. This Notice is written, for convenience, in most respects as if the law was conceived 
with only one telecommunications operator controlling the only nation-wide public 
switched telecommunications network in each Member States. This will not 
necessarily be the case: new telecommunications networks offering increasingly wide 
coverage will develop progressively. These alternative telecommunications networks 
may ultimately be large and extensive enough to be partly or even wholly substitutable 
for the existing national networks, and this should be kept in mind. 
13. Given the Commission's responsibility for the Community's competition policy, the 
Commission must serve the Community's general interest. The administrative 
resources at the Commission's disposal to perform its task are necessarily limited and 
cannot be used to deal with all the cases brought to its attention. The Commission 
National Regulatory Authority is a sector specific national telecommunications 
regulatory created by a Member State in the context of the services directive as 
amended, and the ONP framework. 
Article 7 of the services directive (Commission Directive 90/388/EEC, referred to above 
in footnote 3), and the Commission's Communication 95/C 275/02 to the European 
Parliament and the Council on the status and implementation of Directive 90/388/EEC 
on competition in the markets for telecommunications services, OJ C 275, 20.10.1995, 
at p. 9 et seq. See also Case C-91/94, Thierry Tranchant and Telephones Stores 
SARL, Judgment of the Court of Justice, 9 November 1995, not yet reported. 
Proposed ONP interconnection Directive cited in footnote 4, Article 9(3). 
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is therefore obliged, in general, to take all organisational measures necessary for the 
performance of its task and, in particular, to establish priorities". 
14. The Commission has therefore indicated that it intends, in using its decision-making 
powers, to concentrate on notifications, complaints and own-initiative proceedings 
having particular political, economic or legal significance for the Community . 
Where these features are absent in a particular case, notifications will not normally be 
dealt with by means of a formal decision, but rather a comfort letter (subject to the 
consent of the parties), and complaints should, as a rule, be handled by national courts 
or other relevant authorities. In this context, it should be noted that the competition 
rules are directly effective' ' so that EC competition law is enforceable in the national 
courts. Even where other Community legislation has been respected, this does not 
remove the need to comply with the Community competition rules. 
15. Other national authorities, in particular National Regulatory Authorities acting within 
the ONP framework, have jurisdiction over certain access agreements (which must be 
notified to them). However, notification of an agreement to an NRA does not make 
notification of an agreement to the Commission unnecessary. The National Regulation 
Authorities must ensure that actions taken by them are consistent with EC competition 
law15, this duty requires them to refrain from action that would undermine the 
effective protection of Community law rights under the competition rules . 
Therefore, they may not approve arrangements which are contrary to the competition 
rules 7. If the national authorities act so as to undermine those rights, the Member 
11 Case T-24/90, Automec v Commission, 1992 ECR II-2223, at paragraph 77; and Case 
T-114/92, BEMIM v Commission, 1995 ECR II 147. 
12 Notice on cooperation between national courts and the Commission in applying Articles 
85 and 86 of the EEC Treaty, OJ C 39/6 (1993), at paragraph 14. 
Draft Notice on cooperation between national competition authorities and the 
Commission, OJ C 262/5, 10 September 1996. 
13 Case 127/73, BRT v SABAM, 1974 ECR 51. 
14 Case 66/86, Ahmed Saeed, 1989 ECR 838. 
15 They must not, for example, encourage or reinforce or approve the results of anti­
competitive behaviour: Ahmed Saeed, above at footnote 14; Case 153/93, Federal 
Republic of Germany v Delta Schiffahrts, 1994 ECR-I 2517; Case 267/86, Van Eycke, 
1988 ECR 4769. 
16 Case 13/77, GB-lnno-BM/ATAB, 1977 ECR 2115, at paragraph 33: "while it is true that 
Article 86 is directed at undertakings, nonetheless it is also true that the Treaty 
imposes a duty on Member States not to adopt or maintain in force any measure which 
could deprive the provision of its effectiveness." 
17 For further duties of national authorities see Case 103/88, Fratelli Costanzo SpA, 1989 
ECR 1839. 
See Ahmed Saeed, above at footnote 14: "Articles 5 and 90 of the EEC Treaty must 
be interpreted as ( i ) prohibiting the national authorities from encouraging the 
conclusion of agreements on tariffs contrary to Article 85(1 ) or Article 86 of the Treaty, 
(continued...) 
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Draft 
State may itself be liable in damages to those harmed by this action18. In addition, 
National Regulatory Authorities have jurisdiction under the ONP directives to take 
steps to ensure effective competition. ' 
16. Access agreements in principle regulate the provision of certain services between 
independent undertakings and do not result in the creation of an autonomous entity 
which would be distinct from the parties to the agreements. Access agreements are 
thus generally outside the scope of the Merger Regulation" . 
17. Under Regulation 17" , the Commission could be seised of an issue relating to access 
agreements by way of a notification of an access agreement by one or more of the 
parties involved", by way of a complaint against a restrictive access agreement or 
against the behaviour of a dominant company in granting or refusing access""5, by way 
of a Commission own-initiative procedure into such a grant or refusal, or by way of 
a sector inquiry" . In addition, a complainant may request that the Commission take 
interim measures in circumstances where there is an urgent risk of serious and 
irreparable harm to the complainant or to the public interest". It should however, be 
noted in cases of great urgency that procedures before national courts can usually 
result more quickly in an order to end the infringements than procedures before the 
Commission.26 
18 17(...continued) 
as the case may be; ( ii) precluding the approval by those authorities of tariffs resulting 
from such agreements" 
Joined Cases C-6 and 9/90, Francovich, 1990-1 ECR 5357; Joined Cases C-46/93, 
Brasserie de Pêcheur SA v Germany and Case C-48/93, R v Secretary of State for 
Transport ex parte Factortame Ltd and others, judgment of 5 March 1996, not yet 
reported. 
For example, recital 18 of the leased line directive referred to in footnote 4 and Article 
9(3) of the draft ONP interconnection directive. 
Council Regulation No 4064/89 of 21 December 1989 on the control of concentrations 
between undertakings, OJ L 395/1 (1989). 
Council Regulation No 17 of 6 February 1962, first Regulation implementing Articles 
85 and 86 of the Treaty, OJ 13/204 (1962), as amended. 
Articles 2 and 4(1) of Regulation 17. 
Article 3 of Regulation 17. 
Articles 3 and 12 of Regulation 17. 
25 Case 792/79R, Camera Care v Commission, 1980 ECR 119. 
See also Case T-44/90, La Cinq v Commission, 1992 ECR 11-1. 
26 See point 16 of the Notice on cooperation between national courts and the 
Commission cited above in footnote 12. 
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20 
21 
22 
23 
24 
Draft 
: 8. There are a number of areas w here agreements will be subject to both the competition 
rules and national or European sector specific regulation, most notably Internal Market 
regulation. In the telecommunications sector, the ONP Directives aims at establishing 
a regulatory regime for access agreements. Given the detailed nature of ONP rules 
and the fact that the}' may go beyond the requirements of Article 86, undertakings 
operating in the telecommunications sector should be aware that compliance with the 
Community competition rules does not absolve them of their duty to abide by 
obligations imposed in the ONP context, and vice versa. 
27 Commission Action in Relation to Access Agreements 
19. Access agreements taken as a whole are of great significance, and it is therefore 
appropriate for the Commission to spell out as clearly as possible the Community 
legal framework within which these agreements should be concluded. Access 
agreements having restrictive clauses will involve issues under Article 85. 
Agreements which involve dominant, or monopolist, undertakings involve Article 86 
issues: concerns arising from the dominance of one or more of the parties will 
generally be of greater significance in the context of a particular agreement than those 
under Article 85. 
20. In applying the competition rules, the Commission will build on the ONP framework, 
and the National Regulatory Authorities acts within that framework. Where 
agreements fall within Article 85(1). they must be notified to the Commis^Scft. if they 
are to benefit from an exemption under Article 85(3). Where agreements are notified, 
the Commission intends to deal with one or more notifications by way of formal 
decisions, following appropriate publicity in the Official Journal, and in accordance 
with the principles set out below. Once the legal principles have been clearly 
established, the Commission then proposes to deal by way of comfort letter with other 
notifications raising the same issues. 
3. Complaints 
21. Natural or legal persons with a legitimate interest may, under certain circumstances, 
submit a complaint to the Commission, requesting that the Commission by decision 
require that an infringement of Article 85 or Article 86 EC be brought to an end. A 
complainant may additionally request that the Commission take interim measures 
where there is an urgent risk of serious and irreparable harm"1'. A prospective 
complainant has other equally or even more effective options, such as an action before 
a national court. In this context, it should be noted that procedures before the national 
27 Article 2 or 4(1) of Regulation 17. 
28 Article 3(2) of Regulation 17. 
29 Camera Care and La Cinq, referred to above at footnote 25. 
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courts can offer considerable advantages for individuals and companies, such as in 
particular "": 
national courts can deal with and award a claim for damages resulting from an 
infringement of the competition rules; 
national courts can usually adopt interim measures and order the termination 
of an infringement more quickly than the Commission is able to do; 
before national courts, it is possible to combine a claim under Community law 
will a claim under national law; 
legal costs can be awarded to the successful applicant before a national court 
Furthermore, the specific national regulatory principles as harmonized under ONP 
principles can offer recourse both at the national and if necessary at Community level. 
3.1 Use of national and ONP procedures 
22. As referred to above' the Commission will take into account the Community interest 
of each case brought to its attention. In evaluating the Community interest, the 
Commission examines: 
"...the significance of the alleged infringement as regards the functioning of the 
common market, the probability of establishing the existence of the 
infringement and the scope of the investigation required in order to fulfil, 
under the best possible conditions, its task of ensuring that Articles 85 and 86 
are complied with... "''" 
Another essential element in this evaluation is the extent to which a national judge is 
in a position to provide an effective remedy for an infringement of Article 85 or 86. 
This may prove difficult, for example, in cases involving extra-territorial elements. 
23. Article 85(1) and Article 86 EC produce direct effects in relations between individuals 
which must be safeguarded by national courts . As regards actions before the 
National Regulatory Authority, the ONP Directive provides that such an authority has 
power to intervene and order changes in relation to both the existence and content of 
access agreements. National Regulatory Authorities must take into account, "the need 
to stimulate a competitive marker and may impose conditions on one or more parties, 
inter alia, "to ensure effective competition"" . 
30 
Notice on cooperation between national courts and the Commission cited above in 
footnote 12, point 16. 
31 At paragraph 14. 
32 See Automec, footnote 11 above, paragraph 86. 
33 BRT v SABAM, footnote 13 above. 
34 Articles 9(1) and 9(3) of the Proposed ONP interconnection Directive. 
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24. The Commission may itself be seized of a dispute either pursuant to the competition 
rules, or pursuant to an ONP Conciliation Procedure. Multiple simultaneous 
proceedings might lead to unnecessary duplication of investigative efforts by the 
Commission and the national authorities. Where complaints are lodged with the 
Commission under Article 3 of Regulation 17 while there are related actions before 
a relevant national or European authority or court, the Directorate-General for 
Competition will generally not initially pursue any investigation as to the existence of 
an infringement under Article 85 or 86 of the EC Treaty. This is subject, however, 
to the following points. 
3.2 Safeguarding complainant's rights 
25. Undertakings are entitled to effective protection of their Community law rightsJ". 
These rights would be undermined if national proceedings were allowed to lead to an 
excessive delay of the Commission's action, without a satisfactory resolution of the 
matter at a national level. In the telecommunications sector, innovation cycles are 
relatively short, and any substantial delay in resolving an access dispute would in 
practice be equivalent to a refusal of access, thus prejudging the proper determination 
of the case. 
26. The Commission therefore takes the view that an access dispute before a National 
Regulatory Authority should be resolved within a reasonable period of time, normally 
speaking not extending beyond six months of the matter first being drawn to the 
attention of that authority or after initiation of ONP procedures, including the 
conciliation procedures 6. This resolution could take the form of either a final 
determination of the action or another form of relief which would safeguard the rights 
of the complainant. If the matter has not reached such a resolution then, prima facie, 
the rights of the parties are not being effectively protected, and the Commission would 
in principle, upon request by the complainant, begin its investigations into the case in 
accordance with its normal procedures, after consultation and in cooperation with the 
national authority in question. 
3.3 Interim measures 
27. As regards any request for interim measures, the existence of national proceedings is 
relevant to the question of whether there is a risk of serious and irreparable harm. 
Such proceedings should, prima facie, remove the risk of such harm and it would 
therefore not be appropriate for the Commission to grant interim measures in the 
absence of evidence that the risk would nevertheless remain. 
28. The availability of and criteria for injunctive relief is an important factor which the 
Commission must take into account in reaching this prima facie conclusion. If 
injunctive relief were not available, or if such relief was not likely adequately to take 
into account the complainant's rights under Community law, the Commission would 
35 Case 14/83, Von Colson, 1984 ECR 1891. 
36 Telecommunications: Open network provision (ONP) for leased lines; Conciliation 
procedure; 94/C 214/04, OJ C 214/4 (1994). 
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consider that the national proceedings did not remove the risk of harm, and would 
therefore commence its investigation of the case. 
4. Own-Initiative Investigation and Sector Inquiries 
29. If it appears necessary, the Commission will open an own-initiative investigation. It 
can also launch a sector inquiry, subject to consultation of the Advisory Committee 
of Member State competition authorities. 
5. Fines 
30. The Commission may impose fines of up to 10% of the annual worldwide turnover 
of undertakings which intentionally or negligently breach Article 85(1) or Article 86J . 
Where agreements have been notified pursuant to Regulation 17 for an exemption 
under Article 85(3), no fine may be levied by the Commission in respect of activities 
described in the notification'' for the period following notification. However, the 
Commission may withdraw the immunity from fines by informing the undertakings 
concerned that, after preliminary examination, it is of the opinion that Article 85(1) 
of the Treaty applies and that application of Article 85(3) is not justified . 
31. The ONP interconnection Directive has two particular provisions which should be 
taken into account with respect to the question of fines under the competition rules. 
First, it provides that interconnection agreements must be communicated to the 
relevant National Regulatory Authorities and made available to interested third parties, 
with the exception of those parts which deal with the commercial strategy of the 
parties411. Secondly, it provides that the National Regulatory Authority must have a 
number of powers which it can use to influence or amend the interconnection 
agreements . These provisions ensure that appropriate publicity is given to the 
agreements, and provide the National Regulatory Authority with the opportunity to 
take steps, where appropriate, to ensure effective competition on the market. 
32. Where an agreement has been notified to a National Regulatory Authority, but has not 
been notified to the Commission, the Commission does not consider it would be 
generally appropriate as a matter of policy to impose a fine in respect of the 
agreement, even if the agreement ultimately proves to contain conditions in breach of 
Article 85. A fine would, however, be appropriate in some cases, for example where: 
Article 15(2) of Regulation 17. 
Article 15(5) of Regulation 17. 
Article 15(6) of Regulation 17. 
Article 6(c) of the Proposed ONP interconnection Directive. 
Inter alia, at Article 9 of the Proposed ONP interconnection Directive. 
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Draft 
a. the agreement proves to contain provisions in breach of Article 86; and / or 
b. the breach of Article 85 is particularly serious. 
The size of the fine will depend on the gravity and duration of the infringement. 
Notification to the NRA is not a substitute for a notification to the Commission and 
does not limit the possibility for interested parties to submit a complaint to the 
Commission, or for the Commission to begin an own-initiative investigation into 
access agreements. Nor does such notification limit the rights of a party to seek 
damages before a national court for harm caused by anti-competitive agreements ". 
42 See footnote 18 above. 
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Part II: Relevant Markets 
34. In the course of investigating cases within the framework set out in Part I above, the 
Commission will base itself on the following approach to the definition of relevant 
markets in this sector. 
35. Firms are subject to three main sources of competitive constraints; demand 
substitutability, supply substitutability and potential competition, with the first 
constituting the most immediate and effective disciplinary force on the suppliers of a 
given product or service. Demand substitutability is therefore the main tool used to 
define the relevant product market on which restrictions of competition for the 
purposes of Articles 85(1) and 86 can be identified. 
36. Supply substitutability is generally not used to define relevant markets. In practice 
it cannot be clearly distinguished from potential competition. Supply side 
substitutability and potential competition are used for the purpose of determining 
whether the undertaking has a dominant position or whether the restriction of 
competition is significant within the meaning of Article 85, or whether there is 
elimination of competition. 
37. In assessing relevant markets it is necessary to look at developments in the market in 
the short term. 
1. Relevant product market 
38. Section 6 of form A/B defines the relevant product market as follows: 
"A relevant product market comprises all those products and / or services 
which are regarded as interchangeable or substitutable by the consumer, by 
reason of the products' characteristics, their prices and their intended use". 
39. The ending of the legal monopolies in the telecommunications sector, whereby third 
parties can provide services to end-users, will lead to the emergence of a second type 
of market, related to the market for provision of services, that of access to facilities 
which are currently necessary to provide these services. In this sector, interconnection 
to the public switched telecommunications network would be a typical example of 
such access. Without interconnection, it will not be commercially possible for third 
parties to provide, for example, comprehensive voice telephony services. 
40. It is clear, therefore, that in the telecommunications sector there are at least two types 
of relevant product markets to consider - that of a service to be provided to end users 
and that of access to those facilities necessary to provide that service to end users 
(information, physical network, etc.). In the context of any particular case, it will be 
necessary to define the relevant access and services markets, such as interconnection 
Wdr-cons.wpd ] 3 
Draft 
to the public telecommunications network, and provision of public voice telephony 
services, respectively. 
41. When appropriate, the Commission will use the test of a relevant market which is 
made by asking whether, if all the suppliers of the services in question raised their 
prices by 5-10%, their collective profits would rise. According to this test, if their 
profits would rise, the market considered is a separate relevant market. 
42. The Commission considers that the principles under competition law governing these 
markets remain the same regardless of the particular market in question. Given the 
pace of technological change in this sector, any attempt to define particular product 
markets in this Notice would run the risk of rapidly becoming inaccurate or irrelevant. 
The definition of particular product markets is best done in the light of a detailed 
examination of an individual case. 
/. /. Services market 
43. This can be broadly defined as the provision of any telecommunications service to a 
user. Different telecommunications services will be considered substitutable if they 
show a sufficient degree of interchangeability for the end-user, which would mean that 
effective competition can take place between the different providers of these services. 
1.2 Access to facilities 
44. For a service provider to provide services to end-users it will often require access to 
one or more (upstream or downstream) facilities. For example, to deliver physically 
the service to end-users, it needs access to the termination points of the 
telecommunications network to which these end-users are connected. This access can 
be achieved at the physical level through dedicated or shared local infrastructure, 
either self provided or leased from a local infrastructure provider. It can also be 
achieved either through a service provider who already has these end-users as 
subscribers, or through an interconnection provider who has access directly or 
indirectly to the relevant termination points. 
45. In addition to physical access, a service provider may need access to other facilities 
to enable it to market its service to end users: for example, a service provider must 
be able to make end users aware of its services. Where, as is often the case, for 
example, with directory information, the facility can only be obtained from the 
telecommunications operator, similar concerns arise as with physical access issues. 
46. In many cases, the Commission will be concerned with physical access issues, where 
what is necessary is interconnection to the network of the telecommunications operator \ 
4,1 Interconnection is defined in Directive 96/19/EC as: 
"... the physical and logical linking of the telecommunications facilities of organisations 
providing telecommunications networks and/or telecommunications services, in order 
to allow the users of one organisation to communicate with the users of the same or 
another organisation or to access services provided by third organisations." 
(continued...) 
Wdr-cons.wpd 14 
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47. Some incumbent telecommunications operators may be tempted to resist providing 
access to third party service providers or other network operators, particularly in areas 
where the proposed service will be in competition with a service provided by the 
telecommunications operator itself. This resistance will often manifest itself as a 
reluctance to allow access or a willingness to allow it only under disadvantageous 
conditions. It is the role of the competition rules to ensure that these prospective 
access markets are allowed to develop, and that incumbent operators are not permitted 
to use their control over access to stifle developments on the services markets. 
It should be stressed that in the telecommunications sector, liberalisation can be 
expected to lead to the development of new, alternative networks which will ultimately 
have an impact on access market definition involving the incumbent 
telecommunications operator. 
2. Relevant geographic market 
48. Relevant geographic markets are defined in Form A/B as follows: 
"The relevant geographic market comprises the area in which the undertakings 
concerned are involved in the supply and demand of products or services, in 
which the conditions of competition are sufficiently homogeneous and which 
can be distinguished from neighbouring areas because the conditions of 
competition are appreciably different in those areas."' 
49. As regards the provision of telecommunication services and access markets, the 
relevant geographic market will be the area in which the objective conditions of 
competition applying to service providers are similar. It will therefore be necessary 
to examine the possibility for these service providers to access an end-user in any part 
of this area, under equivalent and economically viable conditions. Regulatory 
conditions such as the terms of licences, and any exclusive or special rights owned by 
competing local access providers are particularly relevant . 
..continued) 
In the full liberalization Directive and ONP Directives, telecommunications services are 
defined as: 
"services, whose provision consists wholly or partly in the transmission and/or routing 
of signals on a telecommunications network." 
It therefore includes the transmission of broadcasting signals and CATV networks. 
A telecommunications network is itself defined as: 
"... the transmission equipment and, where applicable, switching equipment and other 
resources which permit the conveyance of signals between defined termination points 
by wire, by radio, by optical or by other electromagnetic means". 
44 Eurotunnel, OJ L 354/66 (1994). 
Wdr-cons.wpd 15 
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Part III: Principles 
50. The Commission will apply the following principles in cases before it. 
51. The Commission has recognised that: 
"Articles 85 and 86 ... constitute law in force and enforceable throughout the 
Community. Conflicts should not arise with other Community rules because 
Community law forms a coherent regulatory framework... it is obvious that 
Community acts adopted in the telecommunications sector are to be interpreted in a 
way consistent with competition rules, so as to ensure the best possible implementation 
of all aspects of the Community telecommunications policy... This applies, inter alia, 
to the relationship between competition rules applicable to undertakings and the ONP 
rules."' 
52. Thus, competition rules continue to apply in circumstances where other Treaty 
provisions or secondary legislation are applicable. In the context of access agreements 
the Internal Market and competition provisions of Community law are both important 
and mutually reinforcing for the proper functioning of the sector. Therefore in making 
an assessment under the competition rules, the Commission will seek to build as far 
as possible on the principles established in the harmonization legislation. It should 
also be borne in mind that a number of the competition law principles set out below 
are also covered by specific rules in the context of the ONP framework. Proper 
application of these rules should often avoid the need for the application of the 
competition rules. 
53. As regards the telecommunications sector, attention should be paid to the cost of 
universal service obligations. Article 90(2) EC may justify exceptions to the 
principles of Articles 85 and 86 EC. The details of universal service obligations are 
a regulatory matter. The field of application of Article 90(2) has been specified in the 
Article 90 Directives in the telecommunications sector, and the Commission will apply 
the competition rules in this context. 
54. Articles 85 and 86 EC apply in the normal manner to agreements or practices which 
have been approved or authorised by a national authority (\ or where the national 
authority has required the inclusion of terms in an agreement at the request of one or 
more of the parties involved. 
55. However, if a national regulatory authority were to require terms which were contrary 
to the competition rules, the undertakings involved would in practice not be fined, 
although the Member State itself would be in breach of Articles 3(g) and 5 EC and 
therefore subject to challenge by the Commission under Article 169 EC. Additionally, 
Guidelines on the application of the competition rules in the telecommunications sector, 
see point 3 above, at paragraphs 15 and 16. 
46 Commission Decision, BNIC/AROW, 82/896/EEC, OJ L 379/1 (1982). 
47 See footnote 15 above. 
Wdr-cons.wpd 16 
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if an undertaking having special or exclusive rights within the meaning of Article 90, 
or a state-owned undertaking, were required or authorised by a national regulator to 
engage in behaviour constituting an abuse of its dominant position, the Member State 
would also be in breach of Article 90( 1 ) and the Commission could adopt a decision 
requiring termination of the infraction48. 
56. National Regulatory Authorities may require strict standards of transparency, 
obligations to supply and pricing practices on the market, particularly where this is 
necessary in the early stages of liberalization. When appropriate, legislation such as 
the ONP framework will be used as an aid in the interpretation of the competition 
rules49. Given the duty resting on National Regulatory Authorities to ensure that 
effective competition is possible, application of the competition rules is likewise 
required for an appropriate interpretation of the ONP principles. It should also be 
noted that many of the issues set out below are also covered by rules under the Full 
Competition Directive and the existing and proposed ONP, licensing and data 
protection Directives: effective enforcement of this regulatory framework should 
prevent many of the competition issues set out below from arising. 
1. Dominance (Article 86) 
57. In order for an undertaking to provide services in the telecommunications services 
market, it will need to obtain access to various facilities. For the provision of 
telecommunications services, for example, interconnection to the public switched 
telecommunications network will usually be necessary. Access to this network will 
almost always be in the hands of a dominant telecommunications operator. As regards 
access agreements, dominance stemming from control on facilities will be the most 
relevant to the Commission's appraisal. 
58. Whether or not a company is dominant does not depend only on the legal rights 
granted to that company. The mere ending of legal monopolies does not put an end 
to dominance. Indeed, notwithstanding the liberalization Directives, the development 
of effective competition from alternative network providers with adequate capacity and 
geographic reach will take time. 
59. In the telecommunications sector, the concept of "essential facilities" will in many 
cases be of direct relevance in determining the duties of dominant telecommunications 
operators. The phrase essential facility is used to describe a facility or infrastructure 
4X 
Joined Cases C-48 and 66/90, Netherlands and others v Commission, 1992 ECR I-
565. 
49 See Ahmed Saeed, footnote 14 above, where internal market legislation relating to 
pricing was used as an aid in determining what level of prices should be regarded as 
unfair for the purposes of Article 86. 
Wdr-cons.wpd 17 
Draft 
which is essential for reaching customers and/or enabling competitors to carry on their 
business, and which cannot be replicated by any reasonable means. 
A company controlling the access to an essential facility enjoys a dominant position 
within the meaning of Article 86. Conversely, a company may enjoy a dominant 
position pursuant to Article 86 without controlling an essential facility. 
The following facilities could at present be expected to constitute essential facilities 
in the telecommunications sector: for example, the public telecommunications 
networks for voice and/or data services, leased circuit or and related network 
terminating equipment, basic data regarding subscribers to the public voice telephony 
service, numbering schemes and other customer or technical information. 
/. /. Services market 
60. One of the factors used to measure the market power of an undertaking are the sales 
attributable to that undertaking, expressed as a percentage of total sales in the market 
for substitutable services in the relevant geographic area. As regards the services 
market, the Commission will assess, inter alia, the turnover generated by the sale of 
substitutable services, excluding the sale or internal usage of interconnection services 
and the sale or internal usage of local infrastructure51, taking into consideration the 
competitive conditions and the structure of supply and demand on the market. 
1.2 Access to facilities 
61. The concept of "access" as referred to above in point 45 can relate to a range of 
situations, including the availability of leased lines enabling a service provider to build 
up its own network, and interconnection problem in the strict sense, i.e. 
interconnecting two telecommunication networks, e.g. mobile and fixed. In relation to 
access, incumbent operators often occupy a monopoly position, and even in areas 
where liberalization of the legal framework has begun, it is probable that the 
incumbent will remain dominant in the future. The incumbent operator, which 
controls the facilities, is often also the largest service provider, and they have in the 
past not needed to distinguish between the conveyance of telecommunications services 
and the provision of these services to end-users. Today, an operator who is also a 
service provider does not require its downstream operating arm to pay for access, and 
therefore it is not easy to calculate the revenue to be allocated to the facility. In a 
50 See also the definition included in the "Additional commitment on regulatory principles 
by the European Communities and their Member States "used by the Group on basic 
telecommunications in the context of the World Trade Organisation (WTO) negotiations 
"Essential facilities mean facilitiesof a public telecommunications transport network and 
service that 
(a) are exclusively or predominantly provided by a single or limited number of 
suppliers; and 
(b) cannot feasibly be economically or technically substituted in order to provide 
a service." 
51 Case 6/72 Continental Can, 1973 ECR 215. 
Wdr-cons.wpd 18 
Draft 
case where an operator is providing both access and services it is necessary to separate 
so far as possible the revenues for the two markets before using revenues as the basis 
for the calculation of the company's share of whichever market is involved. Article 
8(2) of the proposed Interconnection Directive should be helpful in this context as it 
calls for separate accounting for "activities related to interconnection - covering both 
interconnection services provided internally and interconnection services provided to 
others - and other activities". 
62. The economic significance of obtaining access also depends on the coverage of the 
network with which interconnection is sought. Therefore, in addition to using 
turnover figures, the Commission will, where this is possible, also take into account 
the number of customers who have subscribed to services comparable with those 
which the service provider requesting access intends to provide. Accordingly, market 
power for a given undertaking will be measured partly by the number of subscribers 
who are connected to termination points of the telecommunications network of that 
undertaking expressed as a percentage of the total number of subscribers connected 
to termination points in the relevant geographic area. 
Supply-side substitutability 
63. As stated above (see point 37), supply-side substitutability is also relevant to the 
question of dominance. A market share of over 50% " is usually sufficient to 
demonstrate dominance although other factors will be examined. For example, the 
Commission will examine the existence of other network providers, if any, in the 
relevant geographic area to determine whether such alternative infrastructures are 
sufficiently dense to provide competition to the incumbent's network and the extent 
to which it would be possible for new access providers to enter the market. 
Other relevant factors 
64. In addition to market share data, and supply-side substitutability, in determining 
whether an operator is dominant the Commission will also examine whether the 
operator has privileged access to facilities which cannot be duplicated, either for legal 
reasons or because it would cost too much. 
65. As competing access providers appear and challenge the dominance of the incumbent, 
the scope of the rights they receive from Member States' authorities, and notably their 
territorial reach, will play an important part in the determination of market power. 
The Commission will closely follow market evolution in relation to these issues and 
52 It should be noted in this context that under the ONP framework an organisation may 
be notified as having significant market power. The determination of whether an 
organisation does or does not have significant market power depends on a number of 
factors, but the starting presumption is that an organisation with a market share of 
more than 25% will normally be considered to have significant market power. The 
Commission will take account of whether an undertaking has been notified as having 
significant market power under the ONP rules in its appraisal under the competition 
rules. 
Wdr-cons.wpd 19 
Draft 
will take account of any altered market conditions in its assessment of access issues 
under the competition rules. 
1.3 Joint dominance 
66. The wording of Article 86 makes it clear that the Article applies when more than one 
company shares a dominant position. The circumstances in which a joint dominant 
position exists, and in which it is abused, have not yet been fully clarified by the case 
law of the Community Courts or the practice of the Commission, and the law is still 
developing. 
67. The words of Article 86 ("abuse by one or more undertakings") describe something 
different from the prohibition on anti-competitive agreements or concerted practices 
in Article 85. To hold otherwise would be contrary to the usual principles of 
interpretation of the Treaty, and would render the words pointless and without 
practical effect. This does not, however, exclude the parallel application of Articles 
85 and 86 to the same agreement or practice, which has been upheld by the 
Commission and the Court in a number of cases , nor is there anything to prevent the 
Commission from taking action only under one of the provisions, when both apply. 
68. Two companies, each dominant in a separate national market, are not the same as two 
jointly dominant companies. National public voice telephony telecommunications 
operators are not likely to become jointly dominant until after liberalization in the 
Community. For two or more companies to be in a joint dominant position, they must 
together have substantially the same position vis-à-vis their customers and competitors 
as a single company has if it is in a dominant position. With specific reference to the 
telecommunications sector, joint dominance could be attained by two 
telecommunications infrastructure operators covering the same geographic market. 
69. In addition, for two or more companies to be jointly dominant it is necessary, but not 
sufficient, for there to be no effective competition between the companies on the 
relevant market. This lack of competition may in practice be due to the fact that the 
companies have links such as agreements for cooperation, interconnection or roaming 
agreements. The Commission does not, however, consider that either economic theory 
or Community law implies that such links are legally necessary for a joint dominant 
position to exist54. It is a sufficient economic link if there is the kind of 
interdependence which often comes about in oligopolistic situations. There does not 
seem to be any reason in law or in economic theory to require any other economic 
link between those companies. This having been said, in practice such links will 
often exist in the telecommunications sector where national telecommunication 
operators nearly inevitably have links of various kinds with one another. 
70. To take as an example access to the local loop, in some Member States this could 
well be controlled in the near future by two operators - the incumbent 
53 
54 Case 85/76 Hoffmann La Roche, 1979 ECR 461, 
Racal Decca, Commission Decision of 21 December 1988, OJ L 43/27 (1989). 
Nestlé / Perrier, Commission Decision of 22 July 1992, OJ L 356/1 (1992). 
Wdr-cons.wpd 20 
Draft 
telecommunications operator and a cable operator. In order to provide particular 
services to consumers, access to the local loop of either the telecommunications 
operator or the cable television operator is necessary. Depending on the circumstances 
of the case and in particular on the relationship between them, neither operator may 
hold a dominant position: together, however, they may hold a joint monopoly of 
access to these facilities. 
Wdr-cons.wpd 21 
Draft 
2. Abuses of Dominance 
2.1 Refusal to grant access to essential facilities and application of 
unfavourable terms 
71. A refusal to give access may be prohibited under Article 86 if the refusal is made by 
a company which is dominant because of its control of facilities , as incumbent 
telecommunications operators will usually be for the foreseeable future. A refusal 
may have: 
"the effect of hindering the maintenance of the degree of competition still 
existing in the market or the growth of that competition" . 
A refusal will only be abusive if it affects competition. Service markets in the 
telecommunications sector will initially have few competitive players and refusals will 
therefore generally affect competition on those markets. In all cases of refusal, any 
justification will be closely examined to determine whether it is objective. 
72. Broadly there are three relevant scenarios: 
a. a refusal to grant access for the purposes of a service where another operator 
has been given access by the access provider to operate on that services 
market; 
b. a refusal to grant access for the purposes of a service where no other operator 
has been given access by the access provider to operate on that services 
market; 
c. a withdrawal of supply of access from an existing customer. 
73. As to the first of the above scenarios, it is clear that a refusal to supply a new 
customer in circumstances where a dominant facilities owner is already supplying one 
or more customers operating in the same downstream market would constitute 
discriminatory treatment which, if it would restrict competition on that downstream 
market, would be an abuse. Where network operators offer the same, or similar, retail 
services as the party requesting access, they may have both the incentive and the 
opportunity to restrict competition and abuse their dominant position in this way. 
There may, of course, be justifications for such refusal - for example, vis-à-vis 
applicants which represent a potential credit risk. In the absence of any objective 
justifications, a refusal would usually be an abuse of the dominant position on the 
access market. 
74. In general terms, the dominant company's duty is to provide access in such a way that 
the goods and services offered to downstream companies are available on terms no 
55 Case 85/76 Hoffmann La Roche, 1979 ECR 461 
Wdr-cons.wpd 22 
Draft 
less favourable than those given to other parties, including its own corresponding 
downstream operations. 
75. As to the second of the above situations, the question arises as to whether the access 
provider should be obliged to contract with the service provider in order to allow the 
service provider to operate on a new service market. Where capacity constraints are 
not an issue and where the company refusing to provide access to its facility has not 
provided access to that facility, either to its downstream arm or to any other company 
operating on that services market, then it is not clear what other objective justification 
there could be. 
76. If there were no commercially feasible alternatives to the access being requested, then 
unless access is granted, the party requesting access would not be able to operate on 
the service market. Refusal in this case would therefore limit the development of new 
markets, or new products on those markets, contrary to Article 86(b). In the transport 
field'6, the Commission ruled that a firm controlling an essential facility must give 
access in certain circumstances . The same principles apply to the 
telecommunications sector. 
77. The principle obliging dominant companies to contract in certain circumstances will 
often be relevant in the telecommunications sector. Currently, there are monopolies 
or virtual monopolies in the provision of network infrastructure for most telecom 
services in the EU. Even where restrictions have already been, or will soon be, lifted, 
competition in downstream markets will continue to depend upon the pricing and 
conditions of access to upstream network services that will only gradually reflect 
competitive market forces. Given the pace of technological change in the 
telecommunications sector, it is possible to envisage situations where companies would 
seek to offer new products or services which are not in competition with products or 
services already offered by the dominant access operator, but for which this operator 
is reluctant to provide access. 
56 Commission decision, Sea Containers v Stena Sealink, 94/19/EC, OJ L15/8 (1994); 
Commission decision, Re Access to Facilities of Port Rodby, 94/119/EC, OJ L55/52 
(1994) 
57 See also (among others): 
Judgments of the Court -
Cases 6 and 7/73, Commercial Solvents v. Commission, 1974 ECR 223; 
Case 311/84, Télémarketing, 1985 ECR 3261; 
Case C-18/88 RTT v. GB-lnno, 1991 ECR 1-5941; 
Case C-260/89, Elliniki Radiophonia Teleorassi, 1991 ECR I-2925; 
Cases T-69, T-70 and T-76/89, RTE, BBC and ITP v. Commission, 1991 ECR II-485, 
535, 575; 
Case C-271/90, Spain v Commission, 1992 ECR I-5833; 
Cases C-241 and 242/91P, RTE and ITP Ltd v Commission (Magill), 1995 ECR I-743 
Commission Decisions -
76/185/EEC - National Carbonizing Company, OJ L 35/6 (1976); 
88/589/EEC - London European - Sabena, OJ L 317/47 (1988); 
92/213/EEC - British Midland v. Aer Lingus, OJ L 96/34 (1992); 
B& I v. Sealink, (1992) 5 CMLR 255; EC Bulletin, No 6 - 1992, point 1.3.30. 
Wdr-cons.wpd 23 
Draft 
78. The Commission must ensure that the control over facilities enjoyed by incumbent 
operators is not used to hamper the development of a competitive telecommunications 
environment. A company which is dominant on a market for services and which 
commits an abuse contrary to Article 86 on that market may be required, in order to 
put an end to the abuse, to supply access to its facility to one or more competitors on 
that market. In particular, a company may abuse its dominant position if by its 
actions it prevents the emergence of a new product or service. 
79. The starting point for the Commission's analysis will be the identification of an 
existing or potential market for which access is being requested. In order to 
determine whether access should be ordered under the competition rules, account will 
be taken of a breach by the dominant company of its duty not to discriminate (see 
below) or of the following elements, taken cumulatively: 
a. access to the facility in question is generally essential in order for companies 
to compete on that related market'' ; 
The key issue here is therefore what is essential. It will not be sufficient that 
the position of the company requesting access would be more advantageous if 
access were granted - but refusal of access must lead to the proposed activities 
being made either impossible or seriously and unavoidably uneconomic. 
Although, for example, alternative infrastructure may as from 1 July 1996 be 
used for liberalised services, it will be some time before this is in many cases 
a satisfactory alternative to the facilities of the incumbent operator. Such 
alternative infrastructure does not at present offer the same dense geographic 
coverage as that of the incumbent telecommunications operator's network. 
b. there is sufficient capacity available to provide access. 
the facility owner fails to satisfy demand on an existing service or product 
market, blocks the emergence of a potential new service or product, or 
impedes competition on an existing or potential service or product market; 
d. the company seeking access is prepared to pay the reasonable and non-discriminatory 
price and will otherwise in all respects accept non-discriminatory access terms and 
conditions. 
e. there is no objective justification for refusing to provide access. 
58 Community law protects competition and not competitors, and therefore it would be 
insufficient to demonstrate that one competitor needed access to a facility in order to 
compete in the downstream market. It would be necessary to demonstrate that access 
is necessary for all except exceptional competitors in order for access to be made 
compulsory. 
Wdr-cons.wpd 24 
Draft 
Relevant justifications in this context could include an overriding difficulty of 
providing access to the requesting company, or the need for a facility owner which 
has undertaken investment aimed at the introduction of a new product or service to 
have sufficient time and opportunity to use the facility in order to place that new 
product or service on the market. However, although any justification will have to 
be examined carefully on a case-by-case basis. It is particularly important in the 
telecommunications sector that the benefits to end-users which will arise from a 
competitive environment are not undermined by the actions of the former state 
monopolists in preventing competition from emerging and developing. 
In determining whether an infringement of Article 86 has been committed, account will be 
taken both of the factual situation in that and other geographic areas, and, where relevant 
the relationship between the access requested and the technical configuration of the facility. 
80. The question of objective justification will require particularly close analysis in this area. 
In addition to determining whether difficulties cited in any particular case are serious enough 
to justify the refusal to grant access, the relevant authorities must also decide whether these 
difficulties are sufficient to outweigh the damage done to competition if access is refused 
or made more difficult and the downstream service markets are thus limited. 
81. Three important elements relating to access which could be manipulated by the access 
provider in order, in effect, to refuse to provide access are timing, technical configuration 
and price. 
82. Dominant telecommunications operators have a duty to deal with requests for access 
efficiently: undue and unexplained delays in responding to a request for access may 
constitute an abuse. In particular, however, the Commission will seek to compare the 
response to a request for access with: 
a. the usual time frame and conditions applicable when the responding party grants 
access to its facilities to its own subsidiary or operating branch; 
b. responses to requests for access to similar facilities in other Member States; 
the explanations given for any delay in dealing with requests for access. c. 
83. Issues of technical configuration will similarly be closely examined in order to determine 
whether they are genuine. In principle, competition rules require that the party requesting 
access must be granted access at the most suitable point for the requesting party, provided 
that this point is technically feasible for the access provider. Questions of technical 
feasibility may be objective justifications for refusing to supply - for example, the traffic for 
which access is sought must satisfy the relevant technical standards for the 
Wdr-cons.wpd 25 
Draft 
infrastructure - or questions of capacity restraints, where questions of rationing may 
arise . 
84. Excessive pricing for access, as well as being abusive in itself10, may also amount to 
an effective refusal to grant access. 
85. There are a number of elements of these tests which require careful assessment. 
Pricing questions in the telecommunications sector will be facilitated by the 
obligations un ONP Directives to have transparent cost-accounting systems. 
86. As to the third of the situations referred to in point 72 above, some previous 
Commission decisions and the case law of the Court have been concerned with the 
withdrawal of supply from downstream competitors (the third case, above). In 
Commercial Solvents, the Court held that: 
"an undertaking which has a dominant position on the market in raw materials 
and which, with the object of reserving such raw material for manufacturing 
its own derivatives, refuses to supply a customer, which is itself a 
manufacturer of these derivatives, and therefore risks eliminating all 
competition on the part of this customer, is abusing its dominant position 
within the meaning of Article 86. '° 
87. Although this case dealt with the withdrawal of a product, there is no difference in 
principle between this case and the withdrawal of access. The unilateral termination 
of access agreements raises substantially similar issues to those examined in relation 
to refusals. Withdrawal of access from an existing customer will usually be abusive. 
Again, objective reasons may be provided to justify the termination. Any such 
reasons must be proportionate to the effects on competition of the withdrawal. 
2.2 Other forms of abuse 
88 Refusals to provide access are only one form of possible abuse in this area. Abuses 
may also arise in the context of access having been granted. An abuse may occur 
inter alia where the operator is behaving in a discriminatory manner or the operator's 
actions otherwise limit markets or technical development. The following are non-
exhaustive examples of abuses which can take place. 
Network configuration 
89. Network configuration by a dominant network operator which makes access 
objectively more difficult for service providers6" could constitute an abuse unless it 
59 As noted above at paragraph 80. 
60 See paragraph 91 below. 
61 Case 6 and 7/73, Commercial Solvents, 1974 ECR 223. 
62 ie to use the network to reach their own customers 
Wdr-cons.wpd 26 
Draft 
were objectively justifiable. One objective justification would be where the network 
configuration improves the efficiency of the network generally. 
Tying 
90. This is of particular concern where it involves the tying of services for which the 
telecommunications operator is dominant with those for which it is exposed to 
competition". Where the vertically integrated dominant network operator obliges the 
party requesting access to purchase one or more services64 without adequate 
justifications, this may exclude rivals of the dominant access provider from offering 
these elements of the package independently. This requirement could thus constitute 
an abuse under Article 86. 
63 This is also dealt with under the ONP framework: see Art 7(4) of the Interconnection 
Directive, Art 12(4) of the voice telephony Directive and Annex II of the ONP 
Framework Directive. 
64 ie including those which are superfluous to the latter, or indeed those which may 
constitute services the access requester itself would like to provide for its customers 
Wdr-cons.wpd 27 
Draft 
Pricing 
91. Pricing problems in connection with access for service providers to a dominant 
operator's (essential) facilities will often revolve around excessively high prices6 : in 
the absence of another viable alternative to the facility to which access is being sought 
by service providers, the dominant or monopolistic operator may be inclined to charge 
excessive prices. 
Problem of unfairly low prices could arise in the context of competition between 
different telecommunications infrastructure networks, where a dominant operator may 
tend to charge unfairly low prices for access in order to eliminate competition from 
other (emerging) infrastructure providers, in violation of Article 86(a). In general a 
price is abusive if it is below the dominant company's average variable costs or if it 
is below average total costs and part of an anti-competitive plan'1. 
If a case arises, the ONP rules concerning accounting requirements and transparency 
will help to ensure the effective application of Article 86 in this context. 
92. Where the operator is dominant in the product or services market, the margin between 
the price charged to all competitors on the downstream market (including the 
dominant company's own downstream operations, if any) for access and the price 
which the network operator charges in the downstream market must be large enough 
to allow a reasonably efficient service provider in the downstream market to obtain 
a normal profit unless the dominant company can show that its downstream operation 
is exceptionally efficient.(> If this is not the case, competitors on the downstream 
market are faced by a "price squeeze" which could force them out of the market. 
65 The Commission Communication on Assessment Criteria for National Schemes for the 
Costing and Financing of Universal Service and Guidelines for the Operation of such 
Schemes will be relevant for the determination of the extent to which the universal 
service obligation can be used to justify the prices charged. See also the reference 
to the universal service obligation at paragraph 53 above. 
66 See AKZO, case C-62/86, [1991] ECR-3359 
However, the average variable cost rule cannot be applied in many situations in the 
telecommunications sector, since the variable costs of providing access to an already 
existing network are almost zero. Accordingly, the test which the Commission 
considers should be applied is whether whether a company charges a price for goods 
and services - other than in the context of a new product or service -which, although 
above the average variable cost of providing the specific goods or services for which 
the price in question is paid is so low that the overall revenues for all the goods or 
services in question would be less than its average total costs of providing them if it 
sold the same proportion of its output at the same price on a continuing basis, even 
where no intent to exclude a competitor is proved. 
67 Commission Decision, Brown Napier/British Sugar, 88/518/EEC, OJ L 284/41 (1988): 
the margin between industrial and retail prices was reduced to the point where the 
wholesale purchaser with packaging operations as efficient as those of the wholesale 
supplier could not profitably serve the retail market. See also National Carbonising, 
footnote 57 above. 
Wdr-cons.wpd 28 
Draft 
Discrimination 
93. A dominant access provider may not discriminate between different access agreements 
where such discrimination would restrict competition. Any differentiation based on 
the use which is to be made of the access rather than differences between the 
transactions for the access provider itself, if the discrimination is sufficiently likely to 
restrict or distort actual or potential competition, would be contrary to Article 86. 
This discrimination could take the form of imposing different conditions, including the 
charging of different prices, or otherwise differentiating between access agreements, 
except where such discrimination would be objectively justified, for example on the 
basis of cost or technical considerations or the fact that the users are operating at 
different levels. Such discrimination could be likely to restrict competition in the 
downstream market on which the company requesting access was seeking to operate, 
in that it might limit the possibility for that operator to enter the market or expand its 
operations on that market'1 . 
94. With regard to price discrimination, Article 86(c) prohibits discrimination by a 
dominant firm between customers of that firm1, including discriminating between 
customers on the basis of whether or not they agree to deal exclusively with that 
dominant firm. 
95. Discrimination without objective justification as regards any aspects or condition of 
an access agreement may constitute an abuse. Discrimination may relate to elements 
such as pricing, delays, technical access, routing , numbering, restrictions on network 
use exceeding essential requirements and use of customer network data. However, the 
existence of discrimination can only be determined on a case by case basis. 
Discrimination is contrary to Article 86 whether or not it results from or is apparent 
from the terms of a particular access agreement. 
96. There is, in this context, a general duty on the network operator to treat independent 
customers in the same way as its own subsidiary or downstream service arm. The 
nature of the customer and its demands may play a significant role in determining 
whether transactions are comparable. Different prices for customers at different levels 
(eg wholesale and retail) do not necessarily constitute discrimination. 
97. Discrimination issues may arise in respect of the technical configuration of the access, 
given its importance in the context of access. 
However, when infrastructure capacity is under-utilised, charging a different price for 
access depending on the demand in the different downstream markets may be justified 
to the extent that such differentiation permits a better utilisation of the infrastructure 
and a better development of certain markets, and where such differentiation does not 
restrict or distort competition. In such a case, the Commission will analyse the global 
effects of such price differentiation on all of the downstream markets. 
69 
70 Case C-310/93 P, BPB Industries PLC and British Gypsum Ltd v Commission [1995] 
ECR I-865, 904, applying to discrimination by BPB among customers in the related 
market for dry plaster 
ie to a preferred list of correspondent network operators 
Wdr-cons.wpd 29 
Draft 
The degree of technical sophistication of the access: restrictions on the type or 'level' 
in the network hierarchy of exchange involved in the access or the technical 
capabilities of this exchange are of direct competitive significance. These could be 
the facilities available to support a connection or the type of interface and signalling 
system used to determine the type of service available to the party requesting access 
(e.g. intelligent network facilities). 
The number and/or location of connection points: the requirement to collect and 
distribute traffic for particular areas at the switch which directly serves that area rather 
than at a higher level of the network hierarchy may be important. The party 
requesting access incurs additional expense by either providing links at a greater 
distance from its own switching centre or being liable to pay higher conveyance 
charges. 
lujual access: the possibility for customers of the party requesting access to obtain the 
services provided by the access provider using the same number of dialled digits as 
are used by the customers of the latter is a crucial feature of competitive 
telecommunications. 
Objective justification 
98. These could include factors relating to the actual operation of the network owned by 
the access provider, or licensing restrictions consistent with, for example, the subject 
matter of intellectual property rights. 
2.3 Abuses of joint dominance 
99. In the case of joint dominance (see above, points 65 et seq.) behaviour by one of 
several jointly dominant companies may be abusive even if others are not behaving 
in the same way. 
100. In addition to remedies under the competition rules, if no operator was willing to grant 
access, and if there was no technical or commercial justification for the refusal, one 
would expect that the National Regulatory Authority would resolve the problem by 
ordering one or more of the companies to offer access, under the terms of the ONP 
Directive or under national law. 
3. Access agreements (Article 85) 
Restrictions of competition stemming from access agreements may have two distinct 
effects: to restrict competition between the two parties to the access agreement, or to 
restrict competition from third parties, for example through exclusivity for one or both 
of the parties of the agreement. In addition, where one party is dominant, conditions 
of the access agreement may lead to a strengthening of that dominant position, or to 
an extension of that dominant position to a related market, or may constitute an 
unlawful exploitation of the dominant position through the imposition of unfair terms. 
Wdr-cons.wpd 30 
Draft 
02. Access agreements where access is in principle unlimited are not likely to be 
restrictive of competition within the meaning of Article 85( 1 ). Exclusivity obligations 
in contracts providing access to one company are likely to restrict competition because 
they limit access to infrastructure for other companies. Since most networks have 
more capacity than any single user is likely to need, this will normally be the case in 
the telecommunications sector. 
103. Access agreements can have significant pro-competitive effects as they can improve 
access to the downstream market. Access agreements in the context of interconnection 
are essential to interoperability of services and infrastructure, thus increasing 
competition in the downstream market for services, which is likely to involve higher 
added value than local infrastructure. 
104. There is, however, obvious potential for anti-competitive effects of certain access 
agreements or clauses therein. Access agreements may, for example: 
(a) serve as a means of coordinating prices; 
(b) or market sharing; 
(c) have exclusionary effects on third parties . 
(d) lead to an exchange of commercially sensitive information between the parties. 
105. The risk of price coordination is particularly acute in the telecommunications sector 
since interconnection charges often amount to 50% or more of the total cost of the 
services provided, and where interconnection with a dominant operator will usually 
be necessary. In these circumstances, the scope for price competition is limited and 
the risk (and the seriousness) of price coordination correspondingly greater. 
106. Furthermore, interconnection agreements between network operators may under certain 
circumstances be an instrument of market sharing between the network operator 
providing access and the network operator seeking access, instead of the emergence 
of network competition between them. 
107. In a liberalised telecommunications environment, the above types of restrictions of 
competition will be monitored by the national authorities and the Commission under 
the competition rules. The right of parties who suffer from any type of anti­
competitive behaviour to complain to the Commission is unaffected by national 
regulation. 
Clauses falling within Article 85(1) 
Commission Decision, Night Services, OJ L 259/20 (1994); Commission Decision, 
Eurotunnel, OJ L 354/66 (1994). 
Wdr-cons.wpd 31 
Draft 
108. The Commission has identified certain types of restriction which would potentially 
infringe Article 85(1) \iC and therefore require individual exemption. These clauses 
will most commonly relate to the commercial framework of the access. 
109. In the telecommunications sector, interconnecting parties may wish to exchange, 
customer and traffic information. This exchange is likely to influence the competitive 
behaviour of the undertakings concerned, and could easily be used by the parties for 
collusive practices, such as market sharing ~. Safeguards will therefore be necessary 
to ensure that either confidential information is only disclosed to those parts of the 
companies involved in making the interconnection agreements, or to ensure that the 
information is not used for anti-competitive purposes. 
110. Kxelusivily arrangements, for example where traffic would be conveyed exclusively 
through the telecommunications network of one or both parties rather than to the 
network of other parties which whom access agreements have been concluded will 
similarly require analysis under Article 85(3)- If no justification is provided for such 
routing, such clauses will be prohibited. 
111. Access agreement that have been concluded with an anti-competitive object are 
extremely unlikely to fulfil the criteria for an individual exemption under Article 
85(3). 
112. Furthermore, access agreements may have an impact on the competitive structure of 
the market. Local access charges will often account for a considerable portion of the 
total cost of the services provided to end-users by the party requesting access, thus 
leaving limited scope for price competition. Because of the need to safeguard this 
limited degree of competition, the Commission will therefore pay particular attention 
to scrutinising access agreements in the context of their likely effects on the relevant 
markets in order to ensure that such agreements do not serve as a hidden and indirect 
means for fixing or co-ordinating end-prices for end-users, which constitutes one of 
the most serious infringements of Article 85 FC \ 
In addition, clauses involving collective discrimination leading to the exclusion of 
third parties are similarly restrictive of competition. The most important is 
discrimination with regard to price, quality or other commercially significant aspects 
of the access to the detriment of the party requesting access, which will generally aim 
at unfairly favouring the operations of the access provider. 
Wdr-cons.wpd Case T-34/92, Fiatagri UK Ltd and New Holland Ford Ltd v Commission 
Case T/35/92, John Deere Ltd v Commission 
Both on appeal to the ECJ 
Appealing against Commission decision, UK Agricultural Tractor Registration 
Exchange, OJ L 68/19 (1992). 
Case 8/72 Vereniging van Cementhandelaaren v Commission [1972] ECR 977; 
Case 123/83 Bureau National Interprofessionnel du Cognac v. Clair [1985] ECR 391; 
M 
Draft 
4. Effect on trade between Member States 
114. The application of both Article 85 and Article 86 requires an effect on trade between 
Member States. 
115. In order for an agreement to have an effect on trade between Member States, 
it must be possible for the Commission to: 
"foresee with a sufficient degree of probability on the basis of a set of 
objective factors of law or of fact that the agreement in cpiestion may have an 
influence, direct or indirect, actual or potential, on the pattern of trade 
between Member Stales."" 
It is not necessary for each of the restrictions of competition within the agreement to 
be capable of affecting trade , provided the agreement as a whole does so. 
116. As regards access agreements in the telecommunications sector, the Commission will 
consider not only the direct effect of restrictions of competition on inter-state trade in 
access markets, but also the effects on inter-state trade in downstream 
telecommunications services. The Commission will also consider the potential of 
these agreements to foreclose a given geographic market which could prevent 
undertakings already established in other Member States from competing in this 
geographic market. 
117. Telecommunications access agreements will normally affect trade between Member 
States as services provided over a network are traded throughout the EU and access 
agreements may govern the ability of a service provider or an operator to provide any 
•7/ 
given service . Even where markets are mainly national, as is generally the case at 
present given the stage of development of liberalisation, abuses of dominance will 
normally speaking affect market structure, leading to repercussions on trade between 
Member States. 
118. Cases in this area involving issues under Article 86 will relate either to abusive 
clauses in access agreements, or a refusal to conclude an access agreement on 
appropriate terms or at all. As such, the criteria listed above for determining whether 
an access agreement is capable of affecting trade between Member States would be 
equally relevant here. 
74 Case 56/65, STM, 1966 ECR 235 at 249. 
75 Case 193/83, Windsurfing International Inc v Commission, 1986 ECR 611. 
76 See Telecommunications Guidelines, point 3 above. 
Wdr-cons.wpd 
Draft 
Conclusions 
119. The Commission considers that competition rules and sector specific regulation form 
a coherent set of measures to ensure a liberalised and competitive market environment 
for telecommunications markets in the ED. 
120. In taking action in this sector, the Commission will aim to avoid unnecessary 
duplication of procedures, in particular competition procedures and national / EU 
regulatory procedures as set out under the ONP framework. 
121. Where competition rules are invoked the Commission will consider which markets are 
relevant and will apply Articles 85 and 86 in accordance with the principles set out 
above. 
Wdr-cons.wpd 34 

ISSN 0254-1475 
COM(96) 649 final 
DOCUMENTS 
EN 08 15 10 
Catalogue number : CB-C0-96-712-EN-C 
ISBN 92-78-13837-1 
Office for Official Publications of the European Communities 
L-2985 Luxembourg