Annex E
Reply to comments from Síminn hf. concerning the final draft of the
market analysis of leased line markets 7, 13, and 14 due to
organisational changes at Síminn hf.
As a result of organisational changes in the Síminn conglomerate, the Post and Telecom Administration (PTA) presented the final draft of its decision on the retail market for the minimum set of leased lines (Market 7), the wholesale market for terminating segments of leased lines (Market 13), and the wholesale market for trunk segments of leased lines (Market 14) to Síminn hf. and Míla ehf. for consultation, with a letter dated 20 June 2007. The draft decision concerning the markets in question, together with annexes, was submitted to the EFTA Surveillance Authority (ESA) on 23 February 2007, and ESA gave its opinion on that draft in a letter dated 26 March 2007. As the legally mandated consultation process was thereby complete, the next step was to make a formal decision on the above-specified markets.
Because of the organisational changes in the operations of Síminn hf. and the division of those operations into the parent company, Skipti hf., national ID no. 460207-0880, and the subsidiaries Síminn hf., national ID no. 500269-6779, and Míla ehf., national ID no. 460207-1690, PTA considered it necessary to obtain clear information concerning which company or companies administered the services falling within the above-mentioned markets, in line with the market definition presented by the Administration in its analysis of these markets. This information was requested with a letter to Síminn, dated 3 April 2007. Síminn replied with a letter dated 18 April 2007, but the responses in that letter proved unsatisfactory. With a letter dated 20 April 2007, PTA requested information, which was missing in the above-mentioned reply letter, on whether Síminn hf. or Míla ehf. controlled and sold access to an ATM network and an IP (MPLS) network. Síminn hf.’s subsequent response, which is dated 4 May 2007, also contained unsatisfactory information on these points. PTA therefore decided to send Síminn hf. and Míla ehf. a letter announcing the intended decision, with consideration given to the organisational changes described above. That letter is dated 20 June 2007.
The above-mentioned 20 June 2007 letter from PTA to Síminn hf. and Míla ehf. stated that the Administration was of the opinion that the above-described organisational changes at Síminn hf. and the establishment of the private limited liability company Míla ehf. did not make any tangible difference in the Síminn group’s market power. PTA therefore takes the view that the analysis of Síminn hf.’s market power prior to the organisational changes is still fully applicable. It is the Administration’s opinion that the conglomerate comprising companies previously within Síminn hf. still has significant market power in the relevant markets; therefore, PTA intends to designate those companies as having significant market power in the relevant markets and to impose on them the obligations that are described in the draft decision that was sent to ESA for comment on 23 February 2007. It also stated that if PTA did not receive clearer information than before concerning where the operation of individual transmission media and protocols takes place, the Administration would be forced to impose obligations on Síminn hf. and Míla ehf. jointly, with respect to Markets 13 and 14. It also stated PTA’s intention to impose obligations on Síminn hf. alone with respect to Market 7.
No comments were received from Míla ehf.; however, Síminn submitted comments with a letter dated 27 July 2007. Those comments can be found on PTA’s Internet website. In PTA's estimation, those comments did not necessitate a change to the above-mentioned
final draft decision on Markets 7, 13, and 14. The comments are answered specifically in this document. Síminn’s comments are answered below in the order in which they appear in the company’s letter.
1. Data too old
In Síminn’s estimation, many factors indicate that it is necessary that PTA commence the market analysis of the leased line markets once again. The data upon which the PTA market analysis is founded are 2-4 years old – that is, from 2003-2005 – and it is unacceptable that a market analysis carried out by PTA be based on such old information. Síminn demands that PTA begin a new market analysis and that its decision be based on new information and correct premises. Among the factors that must be considered are the division of Síminn and the establishment of Gagnaveita Reykjavíkur ehf. (Reykjavík Data Utility; hereinafter referred to as GR). Furthermore, substantial build-up of electronic communications networks has been carried out by Orkuveita Reykjavíkur (Reykjavík Energy, OR) over the past two years.
PTA’s position
PTA makes reference to the discussion in Paragraphs 71 and 72 in the ESA Guidelines on market analysis, in which the roles of competition authorities and national regulatory authorities are compared as they relate to an analysis of competition. In competition law, markets are generally defined ex post, that is, after the fact, and market analyses are based on events that have already occurred. On the other hand, national regulatory authorities in the electronic communications sector look forward in time. On this point, the Guidelines state that even though an NRA’s initial market predictions do not finally materialise in a given case, this does not necessarily mean that the NRA’s decision was inconsistent with the Framework Directive at the time it was adopted. In applying ex ante the concept of dominance (significant market power), NRAs must be accorded discretionary powers correlative to the complex character of the economic, factual, and legal situations that will need to be assessed. According to the provisions of the Framework Directive, NRAs must carry out market analyses on a regular basis. This will give them the opportunity to react at regular intervals to any market developments and to take any measures deemed necessary.
Statistical data were updated continuously while the market analysis of the relevant leased line markets was underway. The data on which PTA based its conclusions extended to year-end 2005 and are therefore about one-and-a-half years old. The data were therefore just over a year old in March, when the analysis was sent to ESA. ESA had no comment to make on that point. Considering that the time horizon of the market analysis could be three years, it is clear that at least two years of those three could remain at the present time, considering the normal processing time for such an analysis and assuming that there are no major changes in the market. PTA intends to compile regular information on the leased line markets and to assess that information as it is received. The Administration considers it insupportable that undertakings in these markets should need to wait for perhaps several more months for a conclusion from PTA, as it is important that the competition problems identified by PTA in its analysis of the markets in question
be addressed as soon as possible. It has been demonstrated that data compilation in these markets can take several months.
As is stated in the introduction to this document, PTA sent Síminn hf. a query at the beginning of April, a few days after the ESA comments were received, and requested information concerning which company or companies administered the services belonging to the relevant leased line markets. After receiving unsatisfactory information from Síminn hf., PTA sent the company another letter, dated 20 April 2007, and requested that Síminn state clearly whether Síminn or Míla controlled and sold access to the ATM network and the IP(MPLS) network. Following Síminn's unsatisfactory responses of 4 May 2007 and Síminn’s statement that Míla should have the opportunity to send its own reply because it was an independent company, PTA sent Síminn hf. and Míla ehf. a letter dated 20 June 2007, stating that if PTA did not receive clearer information than before concerning which company carried out operations of transmission media and protocols, it would be forced to impose obligations on Síminn hf. and Míla ehf. jointly with respect to Markets 13 and 14. A satisfactory response to these questions was finally received by PTA in the form of a letter from Síminn dated 27 July 2007. No reply was received from Míla despite the fact that Síminn considered it important that Míla should have an independent right of protest.
According to the foregoing, it has taken four months for PTA to receive sufficient information from Síminn hf. concerning the division of operations of transmission media and protocols within the conglomerate. PTA considers it appropriate that Síminn and Míla bear the burden of these delays, and not other electronic communications undertakings, which had nothing to do with them.
PTA rejects Síminn’s demand that the Administration begin the market analysis of the relevant leased line markets once again or that it request new statistical data at this point in the matter. The decision has taken into account the organisational changes at Síminn hf.; furthermore, the organisational change at Orkuveita Reykjavíkur (OR), which involved the establishment of Gagnaveita Reykjavíkur ehf., had no effect on the results of this analysis, as GR is 100% owned by OR. As regards the development of GR’s fibre optic cable network, PTA intends to continue to follow the market and will commence a new analysis of the leased line markets in question if necessary.
2. The term “leased line”
Síminn says it has maintained from the outset that PTA’s analysis has not been based on the proper definition of the term “leased line.” The market analysis as a whole was based on PTA’ s definition of the term. As it was clear that PTA was basing its conclusions on an incorrect definition, the market analysis as such is actually useless. Síminn therefore demands that PTA commence work on a new market analysis based on the correct definition. A criterion for the definition of a leased line is that it extends between two network termination points (and not many, as PTA maintained), that it involves guaranteed transmission capacity, and that routing analysis or routing analysis systems, such as ATM and Síminn’s IP/MPLS networks, do not fall under the definition of a leased line.
PTA’s position
These comments were submitted by Síminn before PTA's preliminary draft of the market analysis of the relevant leased line markets was presented. PTA’s position is expressed in Annex B (Responses to comments from Síminn hf., Og fjarskipti ehf., Fjarski ehf., and the Competition Authority on PTA’s preliminary draft of the market analysis for leased line markets 7, 13, and 14), dated 23 February 2007. Síminn’s comments and PTA’s position were among the documents sent to ESA on that date, and ESA made no comment, either on PTA’s position or on the results of the analysis in this respect; therefore, it must be considered as established that ESA approved both PTA’s analysis and the imposition of obligations regarding ATM and IP(MPLS).
Reference is made to PTA’s previous position as regards Síminn’s comments on the definition of the term “leased line.” PTA wishes to reiterate that it has based its definition of the product market for leased lines on utility as it is defined by the EU, rather on individual equipment or technology. In this context, it should be mentioned that protocols and microwave connections could be considered conventional leased lines if demand-side and/or supply-side substitutability exists according to the Guidelines on market analysis issued by the European Commission and by ESA. Various types of transmission technology could thus be used to achieve a connection between two points, and these could have utility comparable to that of a conventional leased line. PTA rejects the argument that there is a fundamental misunderstanding in its definition of a leased line, as this definition is consistent with the EU definition of leased lines and the sets of guidelines on market analysis issued by the European Commission and ESA.
To explain this more fully, PTA assumes in its market analysis that conventional leased lines are connections, but in accordance with the market analysis guidelines from the Commission and ESA, the definition of a product market must also take substitute products into consideration. Substitutable products and services are defined as products or services that can, wholly or to a significant extent, take the place of other products or services, not only on the basis of the objective characteristics of the product in question, the purchaser’s intended use of it, and its price, but also with respect to competition requirements and/or conditions relating to supply and demand. Products that can compete with one another are therefore called substitutable products, and each market consists of products that are mutually substitutable. Products that can substitute for one another only to a limited extent are not considered part of the same market. In its analysis of the relevant product markets, PTA came to the conclusion, among other things, that ATM and IP(MPLS) can substitute for conventional leased lines and therefore belong to the relevant wholesale markets.
It is of little use for Síminn to split hairs over the definition of the term “leased line” when it is clear that PTA bases its conclusions primarily on the fact that ATM and IP(MPLS) can substitute for conventional leased lines according to the fundamental principles of competition law, which principles are to be used in the market analysis process, according to the Commission Guidelines, the ESA Guidelines, the clear statutory provisions on market definition in Article 16 of the Electronic Communications Act, no.
81/2003, and the provisions on the execution of the market analysis in Article 18, Paragraph 1 of the same Act. PTA’s conclusion is therefore that this is a case of services that can substitute for conventional leased lines, and not a matter relating to the definition of a leased line.
Finally, it is worth mentioning that Síminn/Míla seems not to interpret the term “leased line” as narrowly vis-à-vis its customers as Síminn does in the matter under discussion here. Míla’s price list and rules for wholesale leased lines, which took effect on 1 April 2006, states as follows:
“ .... Leased lines enable customers to connect to a telephone exchange and to connect two or more network termination points. At the network termination point, the user is provided access to the electronic communications network.”
The same definition appeared in Síminn’s price list before the service was transferred to Míla. Therefore, Síminn’s understanding of the matter seems to conform very little to the definitions of leased lines in the above price list issued by Míla ehf. Furthermore, it should be noted that, according to information from Síminn’s Internet website, conventional leased lines, ATM, IP, and Frame Relay are classified as wide-area network solutions.1
3. ESA’s comments concerning the geographical demarcation of Market 14 Síminn considers the statements made by ESA in the comments on the PTA market analysis to show clearly how flawed PTA’s case handling has been. On page 8 of the comments, it is stated that PTA’s investigation of Market 14 was unsatisfactory and was not based sufficiently on the Administration’s geographical demarcation of the market. ESA instructed PTA to investigate conditions in Market 14 more thoroughly before making a final decision on that market. Therefore, Síminn considers that PTA violated the rule of investigation provided for in both EEA law and administrative law by not investigating market conditions in Market 14 more thoroughly, despite instructions from ESA. This must be considered to render the decision useless in this respect, in addition to which the procedures employed indicated that PTA’s work habits in other respects were similar to those under discussion. Síminn demands that PTA conduct thorough research to determine whether it is appropriate to divide Market 14 into two geographical markets.
PTA’s position
PTA takes the view that ESA’s comment on the geographical demarcation of Market 14 is an isolated matter of opinion that has no real effect on either the results of the analysis or the obligations that should be imposed on undertakings with significant market power in the market under discussion. PTA intends therefore to accede to Síminn’s request and publicise the decision unamended in this respect – that is, to retain the discussed division of the market into two parts – but to examine this factor more closely when carrying out
the next analysis of the market in question. ESA made no implications concerning the invalidity of the decision and could have used its authority to delay or reject the decision if it had considered this point important; that is, ESA could have requested that PTA withdraw the draft decision. It is therefore clear that ESA has authorised PTA to render a final decision based on the draft decision of 23 February 2007 and has thereby approved PTA’s analysis of Market 14 (with the above comment), its conclusions, the obligations it has imposed, and its case handling in other respects.
Síminn’s statement that ESA instructed PTA to investigate geographical conditions in Market 14 more thoroughly before making a final decision is incorrect. ESA invited PTA to compile and analyse statistical data, particularly with respect to differences in price or terms, in order to support its conclusions regarding geographical division of Market 14, before making a final decision. ESA stated in particular, however, that the discussed division of the geographical market did not make any difference with respect to the conclusion that Síminn hf. had significant market power in the market in question, as PTA intended to designate Síminn as an undertaking with significant market power and to impose the same type of obligations on the company in both geographical regions. It was therefore ESA’s conclusion that the obligations to be imposed on Síminn, which had significant market power in Market 14, were the same, no matter whether the geographical market were divided into two parts or not.
PTA intends to investigate this factor more closely the next time it conducts an analysis of this market, but because this point affects neither the designation of an undertaking with significant market power nor the imposition of obligations, such an isolated flaw in the investigation of the matter cannot be considered so substantial as to necessitate the invalidation of the Administration’s analysis of Market 14. Furthermore, Síminn has agreed with PTA’s view on the division of the market into two parts; however, this division of the market does not suffice to change the results of the market analysis, and it is therefore unacceptable to delay the matter even further by compiling data that will not change the results.
PTA disagrees with Síminn’s statement that ESA’s isolated discussion of the division of Market 14 implies a criticism of PTA’s work habits in other respects. If this had been so, ESA would have mentioned it, as it has the authority to reject a draft decision made by PTA on the basis of its market analysis. However, ESA did not do this, which indicates that it was satisfied with PTA’s case handling and conclusions.
4. Overestimation of Síminn’s market share in Market 14
Síminn considers it incorrect to add together the revenues generated by protocols (IP/MPLS and ATM) and those generated by transmission media (underlying leased lines) when assessing the company’s market share in Market 14. It is possible that this could lead to an overestimation of Síminn’s market share. Because of this, and because of the previously mentioned comments by ESA concerning Market 14, Síminn requests more detailed data and explanations from PTA concerning the basis for the decision that Síminn has a dominant position in the relevant market in the Reykjavík area.
PTA’s position
As has been stated previously, it is PTA’s conclusion that ATM and IP/MPLS protocols can substitute for conventional leased lines and therefore belong to Markets 13 and 14. That being the case, PTA cannot do otherwise than to add together the revenues generated by the discussed protocols and the underlying leased lines when it assesses market share in Market 14, in line with the fundamental principles of competition law. PTA’s market analysis, which appears in Annex A, assessed Síminn’s market share of ATM/IP in the Reykjavík area at over 70% in Market 14. PTA wishes to reiterate that a very large market share – that is, over 50% – suffices in and of itself, in accordance with accepted case law, to justify a ruling that an undertaking has a dominant position, except in unusual circumstances.2 In PTA’s estimation, Síminn has not demonstrated that any such unusual circumstances exist in Market 14. Ruling no. 2/2007 by the Rulings Committee for Electronic Communications and Postal Affairs, in a case involving Market 15, contains the following conclusions by the Committee:
“Similarly, the Committee is of the opinion that the documents in the case do not show that there is reason to believe that Síminn hf.'s position in the Icelandic market is so unusual that it is insufficient to use its market share of 65% in this market as a basis for designating Síminn as having significant market power. Undertakings with a substantial market share – that is, over 50% – have generally been considered to have significant market power, both here and in other countries – cf. also Paragraph 76 of the ESA Guidelines on market analysis – and there is nothing to justify abandoning this general rule.”
PTA rejects the idea that GR possessed significant market power when the discussed market analysis was carried out; furthermore, the Administration considers it quite unlikely that GR will have significant market power during the time horizon of this analysis. PTA will continue to follow GR’s progress in the market, however, and will review its position at the end of the time horizon for this analysis, or when the need arises.
To date nothing has emerged in PTA’s statistical data to indicate that GR could prevent Síminn/Míla from having significant market power in Market 14 and could thereby prevent Síminn/Míla from behaving without concern for competitors, customers, and consumers. Neither PTA’s regularly compiled statistical data nor Síminn’s documentation has indicated that GR could be in such a position. Over the past few months, Síminn could easily have sent PTA statistical data to support the company’s assertion that, in the Reykjavík area, it had lost enough market share to GR that this should affect the market analysis.
As regards the development of GR’s fibre optic cable network in the Reykjavík area, PTA wishes to reiterate its position, which is stated in Annex B (Responses to comments
2 Síminn agreed with this interpretation by PTA; cf. the discussion on page 19 of Ruling no. 2/2007 by the
Rulings Committee for Electronic Communications and Postal Affairs, dated 3 July 2007. This is Síminn’s viewpoint in a case regarding the market analysis of Market 15 (wholesale market for access and call origination in public mobile phone networks): " “Market share is an important criterion in the assessment of an undertaking’s power in a given market. It is considered likely that an undertaking with a market share of 70% or more has a dominant market position. When the market share is over 50%, it is also generally considered likely that the undertaking in question has a dominant market position.”
following the PTA preliminary draft of 23 February 2007): that the Administration will follow market conditions closely in the years to come and will revise its conclusions if necessary after the time horizon of this analysis.
5. Income distribution between IP/ATM in Markets 13 and 14
Síminn is of the opinion that PTA should analyse the income distribution for Markets 13 and 14 respectively if the Administration believes it is appropriate to define a market share in IP/ATM as leased lines. Otherwise, it is not possible to determine the revenues for each market, ad underlying leased lines (terminating segments/trunk segments) would belong to neither market. Thus Síminn/Míla’s market share was clearly overestimated. PTA’s attention was drawn to this, and an explanation was requested.
PTA’s position
When statistics were compiled for Market 14 at the earlier stages of the case, the division between Market 13 and Market 14 was discussed. PTA explained its methodology in an e-mail to Síminn, dated 2 November 2006. This e-mail correspondence was in connection with an update of statistical data for the market analysis, as the preliminary draft had been based on data from 2004, and the data to be used to update the market analysis were from 2005. Síminn had maintained that it was not possible to allocate ATM and IP revenues to geographical regions. PTA emphasised that the Administration intended to use, for these services, the same proportional allocation of revenue as was used for revenues from SDH/PDH (conventional leased lines) in 2005. PTA also intended to use, for IP termination, the same proportion as was used for Síminn’s revenues from SDH/PDH for 2005.
As regards Síminn’s market share, it is appropriate to point out that it is most likely underestimated, as is stated in the above-mentioned e-mail from PTA to Síminn. In that e-mail, PTA criticises the premises that Síminn used to determine its year-2005 revenues for Market 14 in the Reykjavík area. PTA made reference to the meeting between the Administration and Síminn, on 26 October 2005, where it was decided that the portion of the line falling within the area defined as the Reykjavík area would belong to that area, and the portion of the line lying outside that defined area should belong to rural Iceland. PTA stated that the method used by Síminn to allocate its year-2005 revenues – that is, if one end of the line lay outside the Reykjavík area, then all of the revenues from that line should be allocated to rural Iceland – was inconsistent with the conclusions drawn at the meeting and with the premises upon which PTA based the discussed market analysis. Using this definition by Síminn, one could just as easily conclude that the line ended in the Reykjavík area as outside it. PTA declared, however, that despite this flaw in the statistical data from Síminn, the Administration would, in this instance, use the income distribution figures submitted by Síminn PTA also pointed out that this would result in an underestimation of Síminn’s market share in the Reykjavík area for the year 2005. The Administration also informed Síminn that the updated figures for 2006 must be based on the original definition arrived at by PTA and Síminn.
The above discussion supports the opinion that PTA has not overestimated Síminn/Míla’s market share in Markets 13 and 14, but rather the reverse, because the statistical data
submitted by Síminn for the year 2005 were based on Síminn’s unilateral changes to the methodology to be used in processing the data.
PTA also wishes to reiterate its opinion that, even though all of Síminn’s revenues from ATM and IP were not included, Síminn would still have a market share well over 50% in Market 14. On the other hand, PTA has decided to include ATM and IP as a part of the relevant service market; therefore, the ATM and IP revenues generated by Síminn and other electronic communications undertakings operating in the relevant market are included.
6. Incorrect price comparison?
Síminn expresses doubt that PTA’s price comparison is correct. IP/MPLS actually includes termination and trunk lines, yet in PTA’s comparison it was compared only with the trunk segment of the leased line. PTA also used kilometres, which made the comparison disadvantageous for Síminn.
PTA’s position
The price for IP/MPLS is not divided between terminating segment and trunk segment; it is one price, whether the line has a terminating segment or not. An IP/MPLS can only be a terminating segment, as is stated in PTA’s example; therefore, PTA considers the comparison a fair one.
PTA’s discussion of the per-kilometre price for trunk lines and IP/MPLS must be examined in the context in which it is presented in PTA’s report, which presents a simplified picture of the price comparison between SDH/PDH and IP/MPLS. PTA’s conclusion is that the price comparison in the report gives an accurate view of the price of IP/MPLS and SDH/PDH.
7. Incorrect IP price for rural Iceland?
In Síminn’s estimation, there is a misunderstanding in PTA’s reply concerning the price of 2 Mb/s IP connections in rural Iceland. The price is not ISK 55,000 in rural Iceland, except in unusual circumstances. The price of a 2 Mb/s IP connection in the places where Síminn has an IP point is the same as in the Reykjavík area; however, where Síminn does not have an IP point, the price is ISK 55,000, in accordance with Síminn’s price list. In this instance, PTA is basing its conclusions on incorrect premises; therefore, it must be considered appropriate to divide the market into the Reykjavík area and rural Iceland. It would be possible to argue that the price of IP connection and that of a trunk line with an extra user line (leg) should be similar in the Reykjavík area, but this would be absurd in rural Iceland. Therefore, PTA’s premises for calculation cannot stand, and it is necessary that the Administration present correct and fair calculations in support of its conclusions.
PTA’s position
This argument by Síminn is quite paradoxical. First Síminn rejects the idea that there is a price difference, which is one of the premises for the division of the market into a rural
and an urban sub-market, and then it claims to consider it appropriate that the market be so divided. There is a clear contradiction in terms in Síminn’s comments, and it is clear that the company cannot "have its cake and eat it, too" in this respect. PTA is well aware that the price of ISK 55,000 is not a universal one; however, the Administration mentioned this price to show that there are differences in pricing. PTA is of the opinion that it has researched fully all the available information concerning regional price differences.
The Administration wishes to reiterate that, in a price comparison between connections with ATM and IP protocols, on the one hand, and connections over conventional leased lines, on the other, it is necessary to consider that ATM and IP connections lie along conventional leased lines. This is done by breaking up high-capacity conventional leased lines into numerous smaller-capacity ATM and IP connections in order to achieve addition utilisation of their capacity. PTA rejects the above assertions by Síminn and considers all of its premises correct and fair, as its methodology has been approved by ESA.
8.
Inappropriate obligation – Frame RelayIn Síminn’s opinion, the supply of products that PTA requires Síminn to offer is not logical. Síminn asks how PTA intends to connect a Frame Relay connection of up to 1 Mb/s onward. This is impossible, and it is an example demonstrating that PTA’s market analysis and the imposed obligations do not make sense.
PTA’s position:
The text below, on Frame Relay, is taken from Síminn’s Internet website:3
,,Frame Relay is well suited to companies that maintain locations in more than one place in the country and want their branches to be in close contact with headquarters. The connection enables companies to connect to more than one location with only one Frame Relay connection, and the technology is based on international standards and can be provided in a simple manner over an ATM network.
The service provides access speeds ranging from 64 kb/s to 2 Mb/s. If there is a need for more speed, it is possible to offer other electronic communications methods over an ATM network and even to have variable data transmission speeds. It is possible to guarantee oneself minimum speed at peak times, from 25% to 75%.”
PTA wishes to point out that Frame Relay has been offered for several years, and PTA’s imposed obligations concerning the supply of protocols is only intended to maintain the current service offerings. Síminn’s comment must therefore be classified as some sort of misunderstanding.
9. Division between Síminn and Míla
In Síminn’s comments, it is stated that transmission media (leased lines) are under Míla’s jurisdiction, while protocols (service networks) are the province of Síminn. This applies to Market 13 as regards IP/MPLS and Frame Relay, and to Market 14 as regards ATM and IP/MPLS.
PTA’s position
According to Síminn’s responses, it is clear that both Síminn and Míla offer services in Markets 13 and 14, as PTA has defined those service markets. Transmission media are offered by Míla (together with the protocols SDH/PDH, Ethernet, and DWDM), and protocols are offered by Síminn (Frame Relay, ATM, and IP/MPLS). It is therefore clear that both companies should be designated as having significant market power in Markets 13 and 14, and that the same obligations should be imposed on both companies with respect to these markets, in line with the proposed PTA decision dated 20 June 2007, as there are unquestionable ownership connections and financial connections between the companies. Therefore, this information does not occasion any changes to the analysis of Markets 7, 13, and 14, cf. Annex A.
