The TKK continues its gradual removal of obligations for Ethernet and dark fibre, following complete deregulation in the consumer broadband market
Half of all municipalities fall into the competitive area: In June 2023, Austria’s Telekom-Control-Commission (TKK) completed its sixth-round analysis of the market for wholesale high-quality access at fixed locations – a market encompassing terminating segments of Ethernet services with guaranteed bandwidths and terminating segments of dark fibre infrastructure. The regulator ran a month-long public consultation prior to this, which saw responses from former incumbent A1 Telekom, utility company Salzburg AG and the Association of Alternative Telecom Network Operators (VAT). In that consultation, the TKK identified a geographic submarket of 1,087 municipalities (‘Market 1’), representing over half of all municipalities in Austria and almost three-quarters of its population. Using a higher market share threshold for A1 Telekom than in the past, it proposed – and then determined – that Market 1 no longer requires regulation and to cancel existing obligations.
The EC supported the market analysis and remedies: For the remaining part of the country (‘Market 2’), the TKK found that A1 has a high and stable overall market share of 70%, and that barriers to entry remain high and persistent due to economies of scale and sunk costs. The regulator decided that A1 Telekom has significant market power and to impose a number of remedies, including:
Access to Ethernet services and dark fibre;
A charge control with cost-oriented prices;
Non-discrimination; and
Transparency through the publication of reference offers and quarterly key performance indicators.
The TKK subsequently notified its draft decision to the EC, which was broadly supportive but made some recommendations, such as the regulator updates wholesale prices annually and considers whether mobile backhaul should be included in the market definition. Following closure of the notification procedure, the TKK was able to adopt a final decision that takes utmost account of the EC’s opinion.
Wholesale broadband access obligations have also been lifted: The TKK has taken a similar deregulatory approach in the previous two market analyses (2014 and 2018), which have seen more municipalities become part of the area deemed competitive – i.e. Market 1. Its decision follows the recent withdrawal of regional and local wholesale fixed broadband access obligations on A1 Telekom. In that review, the TKK’s analysis found that A1 Telekom no longer has a dominant position in the consumer market in large parts of Austria and that the operator had signed private contracts with 19 access seekers covering the next five years at least. A1 Telekom had also agreed to offer other alternative providers access to its network on the same conditions during a transitional period. While underlining that it would keep a watchful eye on the state of competition, the TKK determined that the market therefore no longer warrants sector-specific regulation.
