On 22 July 2010 the Competition Council dismissed Mobistar’s request for a specific type of access to the wholesale network operated by Belgacom to provide “Naked DSL” services. A “Naked DSL” service is broadband access to the Internet provided on a wired connection without voice services being offered, meaning that the end-user is not required to subscribe to a fixed line. Mobistar began to offer such products in October 2005 followed by Belgacom in March 2007.
Belgacom’s first argument was that the Council was lacking competence in this case because the dispute concerned contracts already concluded between the parties and such contractual disputes should be decided by a civil court. Belgacom also challenged the division of powers between the Competition Council and the BIPT. The Council rejected Belgacom’s arguments since the present case concerned a refusal to grant access to the local loop, as defined in the national law transposing the EU directive of 7 March 2002 defining a common regulatory framework in the electronic communications sector. Moreover, the decision reiterated that the Competition Council has the authority to act as a regulatory authority and issue binding decisions according to article 4 of the national law of 17 January 2003 on proceedings and litigation in conjunction with the law of 17 January 2003 relative to the status of the regulator of the Belgian postal and telecommunications sector. At the same time, the BIPT is competent as a national regulatory authority designated by law with the power to take temporary measures and to make proposals aimed at parties to a dispute reaching an amicable settlement.
In addition, the Council held that Mobistar’s request differed from existing wholesale access to the local loop from a technical point of view. In order to offer a “Naked DSL” product, DSL operators need wholesale access to the high end of the frequency spectrum of Belgacom’s copper wire network. The Council found that, under the existing system, access to the higher frequencies alone is only possible on lines that are already activated, i.e. lines on which the consumer subscribed to a fixed line and where Belgacom and another operator share the use of the line. Mobistar asked however for access to the high frequency of lines which had not been activated for voice services and the product under scrutiny was therefore new to the Council.
Mobistar asked Belgacom to apply a non-discriminatory and sufficiently unbundled tariff on the wholesale market of the high speed network that would still guarantee a reasonable profit margin. The Council rejected this request on the following grounds.
First, given Belgacom’s regulatory obligations as the incumbent operator having market power, the Council found Mobistar’s request unreasonable. The Council explained that, from a technical point of view, Mobistar already had the possibility to provide “Naked DSL” services on the retail market with its existing wholesale access. Moreover, with regard to pricing issues, the Council found that the tariff to access the existing wholesale network was sufficiently unbundled and that the tariff, which had been approved by the BIPT on an annual basis, respected the obligation of cost orientation. The main cost issue arises when a final consumer terminates its subscription to a fixed line leaving the low frequencies of the copper wire unused while the overall cost of the frequency spectrum remains the same. Therefore Mobistar’s request to benefit from an unbundled tariff to access only the high frequency at a price that would be lower than the price for access to the whole frequency spectrum on the same line was unreasonable since it would leave Belgacom with disproportional costs.
Secondly, the Council’s analysis of the cost structure, end-users’ behaviour and the two operators’ retail offers led to the conclusion that Belgacom was not discriminating against other DSL operators when fixing the price of wholesale access to the high frequency spectrum of its copper wire network.