WRITTEN QUESTION E-0876/02

by Jonas Sjöstedt (GUE/NGL) to the Commission

(2 April 2002)

Subject: Commission's investigation of Telia's broadband tariffs

It was reported in November 1999 that the Commission had launched an investigation into Telia's tariffs for broadband services following a complaint from its Swedish competitor Bredbandsbolaget to the Commission's competition authority. Bredbandsbolaget reported Telia to the Commission after Telia had won an order to install broadband and supply broadband services to 34 000 flats in Malmö. Bredbandsbolaget considered that Telia is subsidising its broadband development with income from other services.

What was the outcome of the Commission's investigation into this matter?

Answer given by Mr Monti on behalf of the Commission

(28 May 2002)

The press report referred to by the Honourable Member concerns an ongoing investigation of a complaint filed by Bredbandsbolaget AB on 11 October 1999 against Telia AB concerning the provision of broadband services.

During the course of the investigation, the Commission has acquired information indicating that Telia may have engaged in predatory pricing, discriminatory pricing practices and so-called bundling of different services. It is alleged that Telia combines offers for fixed telephony a market in which Telia is the dominant Swedish operator with offers for its broadband services in order to gain competitive advantages in the latter, emerging market. Such potentially abusive behaviour by a dominant market operator may infringe Article 82 of the EC Treaty.

In Sweden, the large majority of communal housing (i.e. blocks-of-flats) are either owned by the municipalities or by co-operative housing associations.

The complaint filed by Bredbandsbolaget concerns the procurement by the so-called HSB-housing associations of:

1. the construction and installation of household group-access to high-capacity broadband networks (so-called fibre-LANs) and

2. the provision of broadband content services to households. Bredbandsbolaget is particularly concerned about HSB Malmö's decision to award Telia with an exclusive contract for these services. HSB-Malmö with approximately 34 000 associated households is the second largest regional housing association in Sweden and therefore an important counterpart when introducing new services to households.

In order to investigate the above-mentioned allegations, the Commission after consulting the Member State concerned adopted on 23 June 2000 a Decision to undertake surprise inspections at the premises of Telia and its subsidiaries pursuant to Article 14(3) of the EEC Council Regulation No 17: First Regulation implementing Articles 85 and 86 of the Treaty(1).

On 29 and 30 June 2000 the Commission assisted by officials from the Swedish Competition Authority and the Swedish Enforcement Services carried out simultaneous unannounced inspections at Telia AB, Telia Nät (a division of Telia AB at the time), Telia MegaCom AB, Telia Nära AB and Com Hem AB. In January 2001, the Commission sent requests for information pursuant to Article 11 of Regulation No 17 to 31 regional HSB housing associations.

Subsequently my services have committed significant resources to catalogue and analyse the extensive information gathered during the investigation, which is still pending. We expect to conclude the preliminary part of the investigation later this year.

(1) OJ P 13, 21.2.1962.