Notice published pursuant to Article 27(4), Chapter II of Protocol 4 to the Agreement between the EFTA States on the establishment of a Surveillance Authority and a Court of Justice (the Surveillance and Court Agreement ) in Case 61114 — Liechtensteinische Kraftwerke Anstalt and Telecom Liechtenstein AG
Date: 2008-05-15
Institutions: EFTA Surveillance Authority
Subjects: EFTA, Liechtenstein, electricity supply, merger control, public sector, restriction on competition, telecommunications

15.5.2008

EN

Official Journal of the European Union

C 118/31

Notice published pursuant to Article 27(4), Chapter II of Protocol 4 to the Agreement between the
EFTA States on the establishment of a Surveillance Authority and a Court of
Justice (the
‘Surveillance and Court Agreement’) in Case 61114 — Liechtensteinische Kraftwerke Anstalt and
Telecom Liechtenstein AG

(2008/C 118/13)

1. INTRODUCTION

1. The EFTA Surveillance Authority (the ‘Authority’) has received a set of commitments formally endorsed
by Liechtensteinische Kraftwerke Anstalt (‘LKW’) and Telecom Liechtenstein AG (‘Telecom Liechtenstein’)
formerly Liechtenstein TeleNet AG, in the course of an investigation pursuant to Article 53 of the
EEA Agreement into the telecommunications markets of the Principality of Liechtenstein.

2. By publishing this notice the Authority intends to market test the proposal of LKW and Telecom
Liechtenstein for commitments, which are designed to address the Authority's competition concerns
expressed in its preliminary assessment in this case. Subject to the results of this market test, the
Authority intends to adopt a decision pursuant to Article 9(1) of Chapter II, Protocol 4 to the Surveil-
lance and Court Agreement on the implementation of the rules on competition laid down in Articles 53
and 54 of the EEA Agreement. Such a decision would render binding the commitments offered by
LKW and Telecom Liechtenstein. The decision would not conclude whether or not there had been or
still was an infringement.

2. SUMMARY OF THE CASE

3. On 1 December 2006, the Authority received a complaint against LKW, Telecom Liechtenstein and the
Principality of Liechtenstein alleging that an agreement concluded between Telecom Liechtenstein and
LKW on 11 July 2006, aimed at restructuring the telecommunications markets in Liechtenstein (the
‘Consolidation Contract’) had as its object or effect the elimination of all competition between the LKW
and Telecom Liechtenstein.

4.

LKW is a 100 % State-owned electricity and telecommunications undertaking in Liechtenstein. LKW is
established as a public law company. It supplies energy and also provides telecommunications infra-
structure services.

5. Telecom Liechtenstein is a 100 % State-owned telecommunications operator in Liechtenstein which
provides a range of communications and multimedia product offerings at the retail and wholesale level.
Telecom Liechtenstein is established as an incorporated company.

6.

Following the Consolidation Contract, at the infrastructure level LKW wholly owns the network infra-
structure in Liechtenstein (in nine out of eleven municipalities). LKW offers wholesale access to its elec-
tronic communications network infrastructure to Telecom Liechtenstein and third party providers.
Telecom Liechtenstein offers wholesale access to third party service providers using its infrastructure
and retail supply of voice telephony, internet, and audio-visual services.

7. On 19 December 2007, the Authority adopted a preliminary assessment focussing on two elements of
the Consolidation Contract and their effects on competition on the telecommunications markets of
Liechtenstein. This document was a preliminary assessment within the meaning of Article 9(1) of
Chapter II, Protocol 4 to the Surveillance and Court Agreement.

8. The preliminary assessment considered that a so-called strategic alignment provision, which requires the
two companies to discuss network infrastructure development and requires LKW to achieve the
network infrastructure requirements of Telecom Liechtenstein may restrict competition. The preliminary
assessment concluded that this provision may operate as an obstacle or foreclose existing competitors
or new entrants by making access to the markets more difficult. The preliminary assessment also
expressed the concern that provisions in the Consolidation Contract pursuant to which LKW and
Telecom Liechtenstein commit not to compete with each other for an unlimited time (‘non-competition
clause’) restricted competition on the telecommunications markets in Liechtenstein.

C 118/32

EN

Official Journal of the European Union

15.5.2008

9.

LKW and Telecom Liechtenstein replied to the preliminary assessment of the Authority and offered to
abide by a set of commitments, which are designed to address the Authority's concerns. These commit-
ments are briefly summarised below and are published in German on the website of the Authority at:

3. COMMITMENTS

http://www.eftasurv.int/fieldsofwork/fieldcompetition/

10. The key elements of the commitments are as follows.

— LKW and Telecom Liechtenstein shall remove the clause in the Consolidation Contract setting forth

the terms of their strategic alignment.

— With regard to network development planning, LKW commits to regularly (at least once annually)

ascertain the requirements of all service providers as regards network infrastructure.

— LKW commits to consolidate the requirements of all market participants (which shall not be
binding upon LKW) in a network plan which shall have the aim of providing non-discriminatory
access to all market participants.

— LKW and Telecom Liechtenstein shall remove the non-competition clause.

4. INVITATION TO COMMENT

11. The Authority intends, subject to the outcome of this market test, to adopt a decision under Article 9(1)
of Chapter II, Protocol 4 to the Surveillance And Court Agreement declaring the proposed commit-
ments to be binding on LKW and Telecom Liechtenstein. To this end it invites interested third parties to
submit any comments on the proposed commitments within one month of the publication of this
notice.

12. Interested third parties are also requested to submit a non-confidential version of their comments, in
which business secrets and other confidential passages are replaced by a non-confidential summary or
by the words ‘(business secret)’ or ‘(confidential)’. LKW and Telecom Liechtenstein may be granted access
to the non-confidential versions of the comments received or of a summary thereof.

13. Comments should be sent

to the following address, mentioning the reference ‘Case 61114 —

LKW/Telecom Liechtenstein’: e-mail to: registry@eftasurv.int or letter/fax to:

Competition and State Aid Directorate
EFTA Surveillance Authority
Rue Belliard 35
B-1040 Brussels
Fax (32-2) 286 18 00