S.I. No. 444/2022 - European Union (Electronic Communications Code) Regulations 2022

• (i) offer to all broadcasters on a fair, reasonable and non-discriminatory basis, compatible with European Union competition law, technical services enabling the broadcasters’ digitally-transmitted services to be received by viewers or listeners authorised by means of decoders administered by the service operators, and

• (ii) keep separate financial accounts regarding his or her activity as a provider of such a service;

• (b) when granting a licence to a manufacturer of consumer equipment, a holder of industrial property rights to conditional access products and systems shall ensure that this is done on fair, reasonable and non-discriminatory terms. Taking into account technical and commercial factors, a holder of such rights shall not subject the granting of licences to conditions prohibiting, deterring or discouraging the inclusion in the same product of —

• (i) a common interface allowing connection with several other conditional access systems, or

• (ii) means specific to another conditional access system, provided that the licensee complies with the relevant and reasonable conditions ensuring, as far as he or she is concerned, the security of transactions of conditional access system operators.

• (2) Each duty referred to in paragraph (1) is a duty owed to any person who may be affected by a breach of it and without prejudice to any other cause of action which may arise from the duty —

• (a) any breach of such duty which causes that person to sustain loss or damage is actionable in tort, and

• (b) any condition included in a licence in contravention of the duty referred to in paragraph (1) is void.

• (3) Where, as a result of a market analysis in accordance with Regulation 49, the Regulator determines that one or more undertakings do not have significant market power on the relevant market, the Regulator may amend or withdraw the conditions with respect to those undertakings in accordance with the procedures referred to in Regulations 17 and 101 but only to the extent that —

• (a) accessibility for end-users to radio and television broadcasts and broadcasting channels and services, specified in accordance with the Act of 2009, would not be adversely affected by such amendment or withdrawal, and

• (b) the prospects for effective competition in the following markets would not be adversely affected by such amendment or withdrawal—

• (i) retail digital television and radio broadcasting services, and

• (ii) conditional access systems and other associated facilities.

• (4) The Regulator shall give such notice as it considers reasonable to any party affected by any such amendment or withdrawal of conditions.

• (5) Nothing in this Regulation shall prejudice the application of section 74 of the Act of 2009.

• (6) An undertaking providing conditional access services that fails to comply with the requirements of paragraph (1)(a) commits an offence and is liable on summary conviction to a class A fine.

• (7) A holder of industrial property rights to conditional access products and systems who fails to comply with the requirements of paragraph (1)(b) commits an offence and is liable on summary conviction to a class A fine.

CHAPTER 3 Market analysis and significant market power

Definitions – Chapter 3

44.

“Recommendation” means a Recommendation on Relevant Product and Service markets adopted in accordance with Article 64(1) of the Directive;

“SMP guidelines” means guidelines for market analysis and the assessment of significant market power published in accordance with Article 64(2) of the Directive.

Undertakings with significant market power

45.

• (2) Where an undertaking has significant market power on a specific market it may also be designated as having significant market power on a closely related market where the links between those two markets allow the market power held on the specific market to be leveraged into the closely related market, thereby strengthening the market power of the undertaking. Consequently, remedies aiming to prevent such leverage may be applied in the closely related market under Regulations 51, 52, 53 and 56 or any of them.

Procedure for identification and definition of markets

46.

• (2) The Regulator shall, where relevant, also take into account the results of the geographical survey conducted in accordance with Regulation 100 and it shall follow the procedures referred to in Regulations 17 and 101 before defining markets that differ from those identified in the Recommendation.

Procedure for identification of transnational markets

47.

• (2) Where a decision has been adopted by the European Commission in accordance with Article 65(1) of the Directive identifying a transnational market that covers all or part of the State, the Regulator shall, acting with such other national regulatory authorities concerned:

• (a) jointly conduct the market analysis taking the utmost account of the SMP guidelines,

• (b) in a concerted fashion, decide on any imposition, maintenance, amendment or withdrawal of regulatory obligations referred to in Regulation 49(8), and

• (c) notify the draft measures regarding the market analysis and any regulatory obligations pursuant to Regulations 17 and 18.

• (3) In the absence of transnational markets, where two or more national regulatory authorities, one of which is the Regulator, consider that the market conditions in their respective jurisdictions are sufficiently homogeneous, the Regulator may, jointly with such other national regulatory authorities concerned, notify their draft measures regarding the market analysis and any regulatory obligations pursuant to Regulations 17 and 18.

Procedure for identification of transnational demand

48.

• (2) The Regulator shall take into utmost account any guidelines issued by BEREC pursuant to Article 66(2) of the Directive on common approaches to meet identified transnational demand, when performing their regulatory tasks including, where appropriate, when imposing any remedies in accordance with Regulation 50.

Market analysis procedure

49.

• (2) The Regulator shall take utmost account of the SMP guidelines and shall follow the procedures referred to in Regulations 17 and 101 when making its determination in accordance with paragraph (1).

• (3) A market may be considered to justify the imposition of regulatory obligations set out in these Regulations if all of the following criteria are met:

• (a) high and non-transitory structural, legal or regulatory barriers to entry are present;

• (b) there is a market structure which does not tend towards effective competition within the relevant time horizon, having regard to the state of infrastructure-based competition and other sources of competition behind the barriers to entry;

• (c) competition law alone is insufficient to adequately address the identified market failure.

• (4) Where the Regulator conducts an analysis of a market that is included in the Recommendation, it shall consider that subparagraphs (a), (b) and (c) of paragraph (3) have been met, unless it determines that one or more of such criteria is not met in the specific national circumstances.

• (5) Where the Regulator conducts the analysis required by paragraph (1), it shall consider developments from a forward-looking perspective in the absence of regulation imposed on the basis of this Regulation in that relevant market, and taking into account all of the following:

• (a) market developments affecting the likelihood of the relevant market tending towards effective competition;

• (b) all relevant competitive constraints, at the wholesale and retail levels, irrespective of whether the sources of such constraints are considered to be electronic communications networks, electronic communications services, or other types of services or applications which are comparable from the perspective of the end-user, and irrespective of whether such constraints are part of the relevant market;

• (c) other types of regulation or measures imposed and affecting the relevant market or related retail market or markets throughout the relevant period, including, without limitation, obligations imposed in accordance with Regulations 25, 41 and 42 or any of them;

• (d) regulation imposed on other relevant markets on the basis of this Regulation.

• (6) Where the Regulator concludes that a relevant market does not justify the imposition of regulatory obligations in accordance with the procedures referred to in paragraphs (1) to (5), or where the conditions set out in paragraph (8) are not met, it shall not impose or maintain any specific regulatory obligations in accordance with Regulation 50. Where there already are sector specific regulatory obligations imposed in accordance with Regulation 50, it shall withdraw such obligations placed on undertakings in that relevant market.

• (7) The Regulator shall ensure parties affected by a withdrawal of obligations in accordance with paragraph (6) receive an appropriate notice period and in setting such a notice period the Regulator shall balance the need to ensure:

• (a) a sustainable transition for the beneficiaries of those obligations and end-users,

• (b) end-user choice, and

• (c) that regulation does not continue for longer than necessary.

When setting such a notice period the Regulator may determine specific conditions and notice periods in relation to existing access agreements.

• (8) Where the Regulator determines that in a relevant market the imposition of regulatory obligations in accordance with paragraphs (1) to (5) of this Regulation is justified it shall designate undertakings which individually or jointly have a significant market power on that relevant market in accordance with Regulation 45 and it shall impose on such undertakings appropriate specific regulatory obligations in accordance with Regulation 50 or maintain or amend such obligations where they already exist if it considers that the outcome for end-users would not be effectively competitive in the absence of those obligations.

• (9) Measures taken in accordance with paragraphs (6) to (8) shall be subject to the procedures referred to in Regulations 17 and 101. The Regulator shall carry out an analysis of the relevant market and notify the corresponding draft measure in accordance with Regulation 17 —

• (a) within 5 years from the adoption of a previous measure where the Regulator has defined the relevant market and determined which undertakings have significant market power; that 5 year period may, on an exceptional basis, be extended for up to one year where the Regulator has notified a reasoned proposal for an extension to the European Commission no later than 4 months before the expiry of the 5 year period, and the European Commission has not objected within one month of the notified extension, or

• (b) within 3 years from the adoption of a revised Recommendation on relevant markets, for markets not previously notified to the European Commission.

• (10) Where the Regulator considers that it may not complete or has not completed its analysis of a relevant market identified in the Recommendation within the time limit laid down in paragraph (9), it may request the assistance of BEREC in completing the analysis of the specific market and the specific obligations to be imposed. With this assistance, the Regulator shall, within 6 months of the time limit laid down in paragraph (9), notify the draft measure to the European Commission in accordance with Regulation 17.

CHAPTER 4 Access remedies imposed on undertakings with significant market power

Imposition, amendment or withdrawal of obligations

50.

• (2) The Regulator shall impose such of the obligations set out in Regulations 51 to 56, 58 and 62 only on those undertakings that have been designated with significant market power in accordance with paragraph (1) without prejudice to—

• (a) Regulations 42 and 43,

• (b) Regulations 13 and 25,

• (c) Condition 7 in Part D of Schedule 1 as applied by virtue of Regulations 8 and 9,

• (d) Regulations 83 and 90,

• (e) the relevant provisions of the Privacy and Electronic Communications Regulations containing obligations on undertakings other than those designated as having significant market power, or

• (f) the need to comply with international commitments.

• (3) In relation to paragraph (2), the Regulator shall notify any decision to impose, amend or withdraw obligations on undertakings to the European Commission in accordance with Regulation 17.

• (4) Where, in exceptional circumstances, the Regulator intends to impose on undertakings designated as having significant market power obligations for access or interconnection other than those set out in Regulations 51 to 56, 58 or 62, the Regulator shall submit to the European Commission a request for authorisation to impose such other obligations. Without prejudice to Regulation 17(9), the Regulator shall not impose such other obligations pending the decision of the European Commission in accordance with Article 68(3) of the Directive to authorise or prevent the Regulator from taking such measures.

• (5) Any obligations imposed in accordance with this Regulation shall —

• (a) be based on the nature of the problem identified by the Regulator in its market analysis, where appropriate taking into account the identification of transnational demand pursuant to Regulation 48,

• (b) be proportionate, having regard where possible, to the costs and benefits, and justified in the light of the objectives laid down in section 12 of the Act of 2002 and Regulation 4, and

• (c) only be imposed following consultation in accordance with Regulations 17 and 101.

• (6) The Regulator may impose any of the obligations set out in Regulations 51 to 56, and 58 and 62, on undertakings to ensure that the State can comply with any international commitments referred to in paragraph (2) and where it does so it shall notify decisions to impose, amend or withdraw obligations on undertakings to the European Commission, in accordance with the procedure referred to in Regulation 17.

• (7) The Regulator shall monitor the impact of new market developments, such as in relation to commercial agreements, including co-investment agreements, influencing competitive dynamics. If the Regulator considers that those developments are not sufficiently important to require a new market analysis in accordance with Regulation 49, the Regulator shall assess without delay whether it is necessary to review the obligations imposed on undertakings designated as having significant market power and amend any previous decision, including by withdrawing obligations or imposing new obligations, in order to ensure that such obligations continue to meet the conditions set out in paragraph (5). Such amendments shall be imposed only after consultations in accordance with Regulations 17 and 101.

Obligation of transparency

51.

• (2) The Regulator may, in particular where obligations under Regulation 52 are imposed on an undertaking, require such undertaking to publish a reference offer that is sufficiently unbundled to ensure that undertakings are not required to pay for facilities which are not necessary for the service requested and such offer shall include —

• (a) a description of the relevant offerings broken down into components according to market needs, and

• (b) a description of the associated terms and conditions including prices.

• (3) The Regulator may issue a direction requiring an undertaking to which this Regulation applies to make changes to a reference offer to give effect to obligations imposed under these Regulations and to publish the reference offer with such changes.

• (4) The Regulator may specify in an obligation referred to in paragraph (1) or (2) or in a direction referred to in paragraph (3) the precise information to be made available, the level of detail required and the manner of publication.

• (5) Notwithstanding paragraph (4), where an undertaking has obligations under Regulation 54 or 55 concerning wholesale access to network infrastructure, the Regulator shall require such undertaking to publish a reference offer taking utmost account of the BEREC guidelines on the minimum criteria for a reference offer issued in accordance with Article 69(4) of the Directive, shall ensure that key performance indicators are specified, where relevant, as well as corresponding service levels, and closely monitor and ensure compliance with them.

• (6) An undertaking that fails to comply with —

• (a) an obligation imposed under paragraph (1),

• (b) a requirement imposed under paragraph (2) or (5), or

• (c) a direction issued under paragraph (3),

commits a hybrid offence.

• (7) In proceedings for an offence under paragraph (6) it is a defence for the undertaking charged to show that it took all reasonable steps and exercised all due diligence to avoid committing the offence.

Obligations of non-discrimination

52.

• (2) Any obligations referred to in paragraph (1) shall ensure, in particular, that the undertaking —

• (a) applies equivalent conditions in equivalent circumstances to other providers of equivalent services, and

• (b) provides services and information to others under the same conditions and of the same quality as it provides for its own services or those of its subsidiaries or partners.

• (3) The Regulator may impose on an undertaking obligations to supply access products and services to all undertakings, including to itself, on the same timescales, terms and conditions, including those relating to price and service levels, and by means of the same systems and processes, in order to ensure equivalence of access.

• (4) An undertaking that fails to comply with an obligation imposed under paragraph (1) or (3) commits a hybrid offence.

• (5) In proceedings for an offence under paragraph (4) it is a defence for the undertaking charged to show that it took all reasonable steps and exercised all due diligence to avoid committing the offence.

Obligation of accounting separation

53.

• (2) For the purpose of paragraph (1) the Regulator may specify the format and accounting methodology to be used.

• (3) A requirement upon an undertaking under Regulation 98 may, in order to facilitate the verification of compliance by an undertaking with any obligations of transparency under Regulation 51, and non-discrimination under Regulation 52, include a requirement that accounting records, including data on revenue records received from third parties, are provided by any such undertaking to the Regulator on request.

• (4) Subject to the protection of the confidentiality of any information which the Regulator considers confidential, the Regulator may publish any information obtained by it under paragraph (3) to the extent that the Regulator considers that such information would contribute to an open and competitive market.

• (5) An undertaking that fails to comply with an obligation or requirement imposed under paragraph (1) commits a hybrid offence.

• (6) In proceedings for an offence under paragraph (5) it is a defence for the undertaking to show that it took all reasonable steps and exercised all due diligence to avoid committing the offence.

Access to civil engineering

54.

• (2) The Regulator may impose obligations on an undertaking to provide access in accordance with paragraph (1), irrespective of whether the assets that are affected by the obligation are part of the relevant market in accordance with the market analysis, provided that the obligation is necessary and proportionate to meet the objectives of Regulation 4.

• (3) An undertaking that fails to comply with an obligation imposed under paragraph (1) commits a hybrid offence.

• (4) In proceedings for an offence under paragraph (3) it is a defence for the undertaking charged to show that it took all reasonable steps and exercised all due diligence to avoid committing the offence.

Obligations of access to, and use of, specific network elements and associated facilities

55.

• (2) The Regulator may require an undertaking, inter alia —

• (a) to give third parties access to and use of, specific physical network elements and associated facilities, as appropriate, including unbundled access to the local loop and sub-loop,

• (b) to give third parties access to specific active or virtual network elements and services,

• (c) to negotiate in good faith with undertakings requesting access,

• (d) not to withdraw access to facilities already granted,

• (e) to provide specific services on a wholesale basis for resale by third parties,

• (f) to grant open access to technical interfaces, protocols or other key technologies that are indispensable for the interoperability of services or virtual network services,

• (g) to provide co-location or other forms of associated facilities sharing,

• (h) to provide specific services needed to ensure interoperability of end-to-end services to users, or roaming on mobile networks,

• (i) to provide access to operational support systems or similar software systems necessary to ensure fair competition in the provision of services,

• (j) to interconnect networks or network facilities, or

• (k) to provide access to associated services such as identity, location and presence service.

• (3) The Regulator may subject an obligation imposed under paragraph (1) or a requirement imposed under paragraph (2) to conditions covering fairness, reasonableness and timeliness.

• (4) Where the Regulator considers the appropriateness of imposing an obligation under paragraph (1) or a requirement under paragraph (2) and, in particular, where it assesses, in accordance with the principle of proportionality, whether and how such obligations are to be imposed, the Regulator shall analyse whether other forms of access to wholesale inputs, either on the same or on a related wholesale market, would be sufficient to address the identified problem in the end-user’s interest. That assessment shall include commercial access offers, regulated access pursuant to Regulation 42, or existing or planned regulated access to other wholesale inputs pursuant to this Regulation. The Regulator shall take account in particular of the following factors —

• (a) the technical and economic viability of using or installing competing facilities, in light of the rate of market development, taking into account the nature and type of access or interconnection involved, including the viability of other upstream access products such as access to ducts,

• (b) the expected technological evolution affecting network design and management,

• (c) the need to ensure technology neutrality enabling the parties to design and manage their own networks,

• (d) the feasibility of providing the access offered in relation to the capacity available,

• (e) the initial investment by the facility owner taking account of any public investment made and the risks involved in making the investment, with particular regard to investments in, and risk levels associated with, very-high-capacity networks,

• (f) the need to safeguard competition in the long term, with particular attention to economically efficient infrastructure-based competition and innovative business models that support sustainable competition, such as those based on co-investment in networks,

• (g) where appropriate, any relevant intellectual property rights, and

• (h) the provision of pan-European services.

• (5) Where the Regulator considers in accordance with Regulation 50, imposing obligations on the basis of Regulation 54 or this Regulation, it shall examine whether the imposition of obligations in accordance with Regulation 54 alone would be a proportionate means by which to promote competition and the end-user’s interest.

• (6) When imposing obligations on an undertaking to provide access in accordance with this Regulation the Regulator may lay down technical or operational conditions to be met by the provider or beneficiaries of such access where necessary to ensure normal operation of the network. Obligations to follow specific technical standards or specifications shall be in compliance with the standards and specifications as laid down in accordance with Regulation 23.

• (7) An undertaking that fails to comply with —

• (a) an obligation imposed under paragraph (1),

• (b) a requirement imposed under paragraph (2), or

• (c) a condition attached to an obligation under paragraph (3),

commits a hybrid offence.

• (8) In proceedings for an offence under paragraph (7) it is a defence for the undertaking charged to show that it took all reasonable steps and exercised all due diligence to avoid committing the offence.

Price control and cost accounting obligations

56.

• (2) In determining whether price control obligations would be appropriate, the Regulator shall take into account the need to promote competition and long-term end-user interests related to the deployment and take-up of next-generation networks, and in particular of very-high-capacity networks. In particular, to encourage investments by the undertaking, including in next generation networks, the Regulator shall, when considering the imposition of obligations under paragraph (1), take into account the investment made by the undertaking which the Regulator considers relevant. Where the Regulator considers price control obligations to be appropriate, it shall allow the undertaking a reasonable rate of return on adequate capital employed, taking into account any risks involved specific to a particular new investment network project.

• (3) The Regulator shall consider not imposing or maintaining obligations pursuant to this Regulation, where it establishes that a demonstrable retail price constraint is present and that any obligations imposed in accordance with Regulations 51 to 55, including, in particular, any economic replicability test imposed in accordance with Regulation 52, ensures effective and non-discriminatory access.

• (4) When the Regulator considers it appropriate to impose price control obligations on access to existing network elements, it shall also take account of the benefits of predictable and stable wholesale prices in ensuring efficient market entry and sufficient incentives for all undertakings to deploy new and enhanced networks.

• (5) The Regulator shall ensure that any cost recovery mechanism or pricing methodology that it imposes under this Regulation serves to promote the deployment of new and enhanced networks, efficiency and sustainable competition and maximises sustainable end-user benefits. In this regard, the Regulator may also take account of prices available in comparable competitive markets.

• (6) Where an undertaking has an obligation under this Regulation regarding the cost orientation of its prices, the burden of proof that charges are derived from costs, including a reasonable rate of return on investment shall lie with the undertaking concerned. For the purpose of calculating the cost of efficient provision of services, the Regulator may use cost accounting methods independent of those used by the undertaking. The Regulator may issue a direction requiring an undertaking to provide full justification for its prices and may, where appropriate, require prices to be adjusted.

• (7) The Regulator shall ensure that, where implementation of a cost accounting system is imposed under this Regulation in order to support price control, a description of the cost accounting system is made publicly available showing at least the main categories under which costs are grouped and the rules used for the allocation of costs. Compliance with the cost accounting system shall, at the choice of the Regulator, be verified by the Regulator or by a suitably qualified independent body.

• (8) The Regulator shall cause to be published annually a statement concerning compliance with any cost accounting system imposed under this Regulation.

• (9) An undertaking that fails to comply with —

• (a) an obligation imposed under paragraph (1), or

• (b) a direction issued under paragraph (6),

commits a hybrid offence.

• (10) In proceedings for an offence under paragraph (9) it is a defence for the undertaking charged to show that it took all reasonable steps and exercised all due diligence to avoid committing the offence.

Termination rates

57.

• (2) If the Regulator imposes cost-oriented termination rates as a result of a market analysis referred to in paragraph (1), it shall follow the principles, criteria and parameters set out in Schedule 2 and its draft measure shall be subject to the procedures referred to in Regulations 17, 18 and 101.

• (3) The Regulator shall closely monitor, and ensure compliance by providers of voice termination services, with the application of the European Union-wide voice termination rates set in accordance with Article 75(1) of the Directive.

• (4) A provider of mobile or fixed voice termination services shall comply with Article 3 of Commission Delegated Regulation (EU) 2021/654 of 18 December 2020³ .

• (5) A provider of mobile or fixed voice termination services who contravenes paragraph (4) commits a hybrid offence.

• (6) The Regulator shall annually report to the Commission and to BEREC with regard to the application of this Regulation.

Regulatory treatment of new very-high-capacity network elements

58.

• (2) When the Regulator assesses commitments offered by an undertaking in accordance with paragraph (1), it shall determine, in particular, whether the offer to co-invest complies with all of the following conditions:

• (a) it is open at any moment during the lifetime of the network to any provider of electronic communications networks or services;

• (b) it would allow other co-investors which are providers of electronic communications networks or services to compete effectively and sustainably in the long term in downstream markets in which the undertaking designated as having significant market power is active, on terms which include:

• (i) fair, reasonable and non-discriminatory terms allowing access to the full capacity of the network to the extent that it is subject to co-investment;

• (ii) flexibility in terms of the value and timing of the participation of each co-investor;

• (iii) the possibility to increase such participation in the future; and

• (iv) reciprocal rights awarded by the co-investors after the deployment of the co-invested infrastructure;

• (c) it is made public by the undertaking in a timely manner and, if the undertaking does not have the characteristics listed in Regulation 62(1), at least six months before the start of the deployment of the new network; that period may be prolonged by the Regulator based on relevant circumstances;

• (d) access seekers not participating in the co-investment can benefit from the outset from the same quality, speed, conditions and end-user reach as were available before the deployment, accompanied by a mechanism of adaptation over time confirmed by the Regulator in light of developments on the related retail markets, that maintains the incentives to participate in the co-investment; such mechanism shall ensure that access seekers have access to the very-high-capacity elements of the network at a time, and on the basis of transparent and non-discriminatory terms, which reflect appropriately the degrees of risk incurred by the respective co-investors at different stages of the deployment and take into account the competitive situation in retail markets;

• (e) it complies at a minimum with the criteria set out in Schedule 3 and is made in good faith.

In carrying out its assessment and making its determination in accordance with this paragraph, the Regulator shall also take utmost account of guidelines published by BEREC in accordance with Article 76(4) of the Directive.

• (3) If the Regulator concludes, taking into account the results of the market test conducted in accordance with Regulation 61(3) to (6), that the co-investment commitment offered complies with the conditions set out in paragraph (2), it shall make that commitment binding pursuant to Regulation 61(7) to (11), and shall not impose any additional obligations pursuant to Regulation 50 as regards the elements of the new very-high-capacity network that are subject to the commitments, if at least one potential co-investor has entered into a co-investment agreement with the undertaking designated as having significant market power.

• (4) Paragraph (3) shall be without prejudice to the regulatory treatment of circumstances that do not comply with the conditions set out in paragraph (2) of this Regulation, taking into account the results of any market test conducted in accordance with Regulation 61(3) to (6), but that have an impact on competition and are taken into account for the purposes of Regulations 49 and 50.

• (5) Notwithstanding paragraph (3), the Regulator may, in duly justified circumstances, impose, maintain or adapt remedies in accordance with Regulations 50 to 56 as regards new very-high-capacity networks in order to address significant competition problems on specific markets, where the Regulator establishes that, given the specific characteristics of these markets, those competition problems would not otherwise be addressed.

• (6) The Regulator shall, on an ongoing basis, monitor compliance with the conditions set out in paragraph (2) and may require the undertaking designated as having significant market power to provide it with annual compliance statements.

• (7) This Regulation is without prejudice to the power of the Regulator to take decisions pursuant to Regulation 67(2) in the event of a dispute arising between undertakings in connection with a co-investment agreement considered by it to comply with the conditions set out in paragraph (2).

• (8) When carrying out its tasks under these Regulations relating to very- high-capacity networks, the Regulator shall take into utmost account any guidelines issued by BEREC in accordance with Article 82 of the Directive.

Functional separation

59.

• (a) that the appropriate obligations imposed under Regulations 51 to 56 have failed to achieve effective competition, and

• (b) that there are important and persisting competition problems or market failures identified in relation to the wholesale provision of certain access product markets,

it may, on an exceptional basis, in accordance with Regulation 50(4), impose an obligation on vertically integrated undertakings to place activities related to the wholesale provision of relevant access products in a business entity operating independently.

• (2) The independently operating business entity referred to in paragraph (1) shall supply access products and services to all undertakings, including to other business entities within the parent company, on the same timescales, terms and conditions, including those relating to price and service levels, and by means of the same systems and processes.

• (3) Where the Regulator intends to impose an obligation of functional separation under this Regulation, it shall submit a request to the European Commission that includes —

• (a) evidence justifying the conclusions of the Regulator as referred to in paragraph (1),

• (b) a reasoned assessment concluding that there is no or little prospect of effective and sustainable infrastructure-based competition within a reasonable timeframe,

• (c) an analysis of the expected impact —

• (i) on the Regulator,

• (ii) on the undertaking concerned, in particular on the workforce of the separated undertaking,

• (iii) on the electronic communications sector as a whole, and on incentives to invest therein, in particular with regard to the need to ensure social and territorial cohesion, and

• (iv) on other stakeholders including, in particular, the expected impact on competition and any potential resulting effects on consumers, and

• (d) an analysis of the reasons justifying that this obligation would be the most efficient means to enforce remedies aimed at addressing the competition problems or the market failures identified.

• (4) The draft measure shall include the following elements —

• (a) the precise nature and level of separation specifying, in particular, the legal status of the separate business entity,

• (b) an identification of the assets of the separate business entity and the products or services to be supplied by that entity,

• (c) the governance arrangements to ensure the independence of the staff employed by the separate business entity, and the corresponding incentive structure,

• (d) rules for ensuring compliance with the obligations,

• (e) rules for ensuring transparency of operational procedures, in particular, towards other stakeholders, and

• (f) a monitoring programme to ensure compliance, including the publication of an annual report.

• (5) Following the European Commission’s decision taken in accordance with Article 68(3) of the Directive on that draft measure, the Regulator shall conduct a coordinated analysis of the different markets related to the access network in accordance with the procedure set out in Regulation 49. On the basis of that analysis, the Regulator shall impose, maintain, amend or withdraw obligations, in accordance with the procedures set out in Regulations 17 and 101.

• (6) Where the Regulator has imposed an obligation under paragraph (1) on an undertaking, it may also impose on the undertaking any of the obligations referred to in Regulations 51 to 56, in any specific market where the undertaking has been designated as having significant market power in accordance with Regulation 49, or any other obligations authorised by the European Commission under Article 68(3).

• (7) An undertaking that fails to comply with an obligation imposed under paragraph (1) commits a hybrid offence.

• (8) In proceedings for an offence under paragraph (7) it is a defence for the undertaking charged to show that it took all reasonable steps and exercised all due diligence to avoid committing the offence.

Voluntary separation by vertically integrated undertaking

60.

• (2) An undertaking referred to in paragraph (1) shall also inform the Regulator of any change of intent notified under that paragraph within 6 weeks of the change of intent, as well as the final outcome of the process of separation within 6 weeks of the separation.

• (3) An undertaking referred to in paragraph (1) may also offer commitments regarding access conditions that are to apply to their network during an implementation period after the proposed form of separation is implemented, with a view to ensuring effective and non-discriminatory access by third parties. The offer of commitments shall include sufficient details, including in terms of timing of implementation and duration, in order to allow the Regulator to conduct its tasks in accordance with paragraph (4). Such commitments may extend beyond the maximum period for market reviews set out in Regulation 49(9).

• (4)
• (a) The Regulator shall assess the effect of the intended transaction, together with the commitments offered, where applicable, on existing regulatory obligations under these Regulations. For that purpose, the Regulator shall conduct an analysis of the different markets related to the access network in accordance with the procedure set out in Regulation 49.

• (b) The Regulator shall take into account any commitments offered by the undertaking, having regard in particular to the objectives set out in Regulation 4. In so doing, the Regulator shall consult third parties in accordance with Regulation 101, and shall address, in particular, those third parties which are directly affected by the intended transaction.

• (c) On the basis of its analysis, the Regulator shall impose, maintain, amend or withdraw obligations in accordance with the procedures set out in Regulations 17 and 101, applying, if appropriate, Regulation 62. In its decision, the Regulator may make the commitments binding, wholly or in part. Notwithstanding Regulation 49(9), the Regulator may make the commitments binding, wholly or in part, for the entire period for which they are offered.

• (5) Without prejudice to Regulation 62, the Regulator may impose on the legally or operationally separate business entity any of the obligations referred to in Regulations 51 to 56 in any specific market where it has been designated as having significant market power in accordance with Regulation 49, or any other obligations authorised by the European Commission under Article 68(3) of the Directive where any commitments offered are insufficient to meet the objectives set out in Regulation 4 and section 12 of the Act.

• (6) The Regulator shall monitor the implementation of the commitments offered by the undertakings that it has made binding in accordance with paragraph (4) and shall consider their extension before the period for which they are initially offered has expired.

• (7) An undertaking that fails to comply with a requirement of paragraph (1) or (2) commits an offence and is liable on summary conviction to a class A fine.

• (8) In proceedings for an offence under paragraph (7) it is a defence for the undertaking charged to show that it took all reasonable steps and exercised all due diligence to avoid committing the offence.

Commitments procedure

61.

• (a) cooperative arrangements relevant to the assessment of appropriate and proportionate obligations pursuant to Regulation 50,

• (b) co-investment in very-high-capacity networks pursuant to Regulation 58, or

• (c) effective and non-discriminatory access by third parties pursuant to Regulation 60, both during an implementation period of voluntary separation by a vertically integrated undertaking and after the proposed form of separation is implemented.

• (2) The offer for commitments referred to in paragraph (1) shall be sufficiently detailed including as to the timing and scope of their implementation and their duration, to allow the Regulator to undertake its assessment pursuant to paragraph (3). Such commitments may extend beyond the periods for carrying out market analysis provided in Regulation 49(9).

• (3) In order to assess any commitments offered by an undertaking pursuant to paragraph (1), the Regulator shall, except where such commitments clearly do not fulfil one or more relevant conditions or criteria, perform a market test, in particular on the offered terms, by conducting a public consultation of interested parties, in particular third parties which are directly affected. Potential co-investors or access seekers may provide views on the compliance of the commitments offered with the conditions provided, as applicable, in Regulation 50, 58 or 60 and may propose changes.

• (4) As regards the commitments offered under this Regulation, the Regulator shall, when assessing obligations pursuant to Regulation 50(5), have particular regard to:

• (a) evidence regarding the fair and reasonable character of the commitments offered;

• (b) the openness of the commitments to all market participants;

• (c) the timely availability of access under fair, reasonable and non-discriminatory conditions, including to very-high-capacity networks, before the launch of related retail services; and

• (d) the overall adequacy of the commitments offered to enable sustainable competition on downstream markets and to facilitate cooperative deployment and take-up of very-high-capacity networks in the interest of end-users.

• (5) Taking into account all the views expressed in the consultation referred to in paragraph (3), and the extent to which such views are representative of different stakeholders, the Regulator shall communicate to the undertaking designated as having significant market power its preliminary conclusions whether the commitments offered in accordance with paragraph (1) comply with the objectives, criteria and procedures set out in this Regulation and, as applicable, in Regulation 50, 58 or 60, and under which conditions it may consider making the commitments binding.

• (6) Following the communication referred to in paragraph (5), the undertaking may revise its initial offer to take account of the preliminary conclusions of the Regulator and with a view to satisfying the criteria set out in this Regulation and, as applicable, in Regulation 50, 58 or 60.

• (7) Without prejudice to Regulation 58(3), the Regulator may issue a decision to make the commitments binding, wholly or in part.

• (8) Notwithstanding Regulation 49(9), the Regulator may make some or all commitments binding for a specific period, which may be the entire period for which they are offered, and in the case of co-investment commitments made binding pursuant to Regulation 58(3), it shall make them binding for a minimum period of seven years.

• (9) Subject to Regulation 58, this Regulation is without prejudice to the application of the market analysis procedure pursuant to Regulation 49 and the imposition of obligations pursuant to Regulation 50.

• (10) Where the Regulator makes commitments binding pursuant to this Regulation, it shall assess under Regulation 50 the consequences of that decision for market development and the appropriateness of any obligation that it has imposed or would, absent those commitments, have considered imposing pursuant to Regulations 50 to 56.

• (11) When notifying the relevant draft measure under Regulation 50 in accordance with Regulation 17, the Regulator shall accompany the notified draft measure with the commitments decision.

• (12) The Regulator shall monitor, supervise and ensure compliance with the commitments that it has made binding in accordance with paragraph (7) in the same way in which it monitors, supervises and ensures compliance with obligations imposed under Regulation 50 and shall consider the extension of the period for which they have been made binding before the initial period expires.

• (13) An undertaking shall comply with commitments that have been made binding in accordance with paragraph (7).

• (14) Without prejudice to paragraph (13), the Regulator may reassess the obligations imposed in accordance with Regulation 50(7).

• (15) An undertaking that fails to comply with a commitment made binding in accordance with paragraph (7) commits a hybrid offence.

Wholesale-only undertakings

62.

• (a) all companies and business units within the undertaking, all companies that are controlled but not necessarily wholly owned by the same ultimate owner, and any shareholder capable of exercising control over the undertaking, only have activities, current and planned for the future, in wholesale markets for electronic communications services and therefore do not have activities in any retail market for electronic communications services provided to end-users in the European Union;

• (b) the undertaking is not bound to deal with a single and separate undertaking operating downstream that is active in any retail market for electronic communications services provided to end-users, because of an exclusive agreement, or an agreement which de facto amounts to an exclusive agreement.

• (2) If the Regulator concludes that the conditions laid down in paragraph (1) of this Regulation are fulfilled, it may impose on that undertaking only obligations pursuant to Regulations 52 and 55 or relative to fair and reasonable pricing if justified on the basis of a market analysis including a prospective assessment of the likely behaviour of the undertaking designated as having significant market power.

• (3) The Regulator shall review obligations imposed on the undertaking in accordance with this Regulation at any time if it concludes that the conditions laid down in paragraph (1) of this Regulation are no longer met and it shall, as appropriate, apply Regulations 49 to 56.

• (4) The Regulator shall also review obligations imposed on the undertaking in accordance with this Regulation if, on the basis of evidence of terms and conditions offered by the undertaking to its downstream customers, it concludes that competition problems have arisen or are likely to arise to the detriment of end-users which require the imposition of one or more obligations provided in Regulation 51, 53, 54 or 56, or the amendment of the obligations imposed in accordance with paragraph (2).

• (5) The imposition of obligations and their review in accordance with this Regulation shall be implemented in accordance with the procedures referred to in Regulations 17, 18 and 101.

• (6) Undertakings shall, without undue delay, inform the Regulator of any change of circumstances relevant to subparagraphs (a) and (b) of paragraph (1).

Migration from legacy infrastructure

63.

• (2) The SMP undertaking referred to in paragraph (1) shall, prior to any decommissioning or replacement of legacy infrastructure, submit a decommissioning or replacement process, as appropriate, to the Regulator, which the Regulator shall ensure —

• (a) includes a transparent timetable and conditions, including an appropriate notice period for transition, and

• (b) establishes the availability of alternative products of at least comparable quality providing access to the upgraded network infrastructure substituting the replaced elements, that in the opinion of the Regulator, are necessary to safeguard competition and the rights of end-users.

• (3) The Regulator may specify the requirements to be complied with by an SMP undertaking for the purposes of paragraphs (1) and (2).

• (4) With regard to assets which are proposed for decommissioning or replacement, the Regulator may withdraw the obligations after having ascertained that the SMP undertaking:

• (a) has established the appropriate conditions for migration, including making available an alternative access product of at least comparable quality as was available using the legacy infrastructure enabling access seekers to reach the same end-users; and

• (b) has complied with the conditions and process notified to the Regulator in accordance with this Regulation.

Such withdrawal shall be implemented in accordance with the procedures referred to in Regulations 17, 18 and 101.

• (5) This Regulation shall be without prejudice to the availability of regulated products imposed by the Regulator on the upgraded network infrastructure in accordance with the procedures set out in Regulations 49 and 50.

• (6) An undertaking that fails to —

• (a) provide notification in accordance with paragraph (1), or

• (b) comply with a requirement specified by the Regulator under paragraph (3),

commits an offence and is liable on summary conviction to a class A fine.

CHAPTER 5 Regulatory control of retail services

Regulatory control of retail services

64.

• (a) determines, as a result of market analysis carried out by it in accordance with Regulation 49 that a given retail market identified in accordance with Regulation 46(1) is not effectively competitive, and

• (b) concludes that the obligations imposed under Regulations 51 to 56 would not result in the achievement of the objectives set out in section 12 of the Act of 2002 and Regulation 4,

the Regulator shall impose such obligations, as it considers appropriate to achieve those objectives, on undertakings identified by the Regulator under Regulation 49(9), as having significant market power on a given retail market.

• (2) Any obligations imposed by the Regulator under paragraph (1) shall be based on the nature of the problem identified under the market analysis and be proportionate and justified in the light of the objectives set out in section 12 of the Act of 2002 and Regulation 4, and may include requirements to ensure that the undertaking concerned does not —

• (a) charge excessive prices,

• (b) inhibit market entry or restrict competition by setting predatory prices,

• (c) show undue preference to specific end-users, or

• (d) unreasonably bundle services.

• (3) The Regulator may require an undertaking to which paragraph (1) applies to comply with —

• (a) measures to control individual tariffs,

• (b) retail price cap measures, or

• (c) measures to orient tariffs towards costs or prices on comparable markets,

in order to protect end-users’ interests whilst promoting effective competition.

• (4) An undertaking that is subject to retail tariff regulation or other relevant retail controls shall operate and maintain a cost accounting system that is—

• (a) based on generally accepted accounting practices,

• (b) suitable for ensuring compliance with this Regulation, and

• (c) capable of verification by the Regulator or a suitably qualified independent person nominated by the Regulator.

• (5) The Regulator may specify the format and accounting methodology to be used by an undertaking to which paragraph (4) applies.

• (6) Compliance by an undertaking with a cost accounting system referred to in paragraph (4) shall be verified by a qualified independent person.

• (7) An undertaking to which paragraph (4) applies shall publish in its annual accounts a statement concerning compliance by it with a cost accounting system referred to in that paragraph.

• (8) Without prejudice to Regulations 71 and 74, the Regulator shall not apply retail control mechanisms under paragraph (1) in a relevant market in relation to which the Regulator is satisfied that effective competition exists.

• (9) An undertaking that fails to comply with

• (a) an obligation imposed under paragraph (1), or

• (b) a requirement imposed under paragraph (3),

commits an offence and is liable on summary conviction to a class A fine.

• (10) An undertaking that fails to comply with the requirements of paragraph (4) or (7) commits an offence and is liable on summary conviction to a class A fine.

• (11) In proceedings for an offence under paragraph (9) it is a defence for the undertaking charged to show that it took all reasonable steps and exercised all due diligence to avoid committing the offence.

CHAPTER 6 Publication of information – access obligations

Publication of notice of obligations and access to information

65.

• (2) Where the Regulator amends or revokes an obligation imposed under this Part, it shall publish a notice referred to in paragraph (1).

• (3) The notice referred to in paragraph (1) shall identify the specific product, service and geographical markets in respect of which the obligations are imposed.

• (4) The Regulator shall ensure, subject to the need to protect commercial confidentiality, that the information published under paragraph (1) is up to date and is made publicly available in a manner that guarantees all interested parties easy access to that information.

• (5) The Regulator shall provide the European Commission with information published in accordance with this Regulation.

CHAPTER 7 Notification and monitoring – undertakings with significant market power

Notification of undertakings designated as having significant market power

66.

• (2) The Regulator shall notify the European Commission of any changes affecting these obligations imposed upon undertakings referred to in paragraph (1) by or under these Regulations and of any changes to such undertakings affected as soon as practicable after any such change.

CHAPTER 8 Dispute resolution between undertakings

Dispute resolution between undertakings

67.

• (a) arising between providers of electronic communications networks or services in the State, in connection with existing obligations under these Regulations,

• (b) between such undertakings and other undertakings benefiting from obligations of access or interconnection arising under the Directive and under these Regulations, or

• (c) between providers of electronic communications networks or services and providers of associated facilities in connection with existing obligations under the Directive and under these Regulations.

• (2) Where a dispute is referred to the Regulator in accordance with paragraph (1) and the Regulator has decided that it is appropriate for it to handle the dispute, the Regulator shall, subject to paragraph (4), at the request of either party, initiate an investigation of the dispute and as soon as possible but, except in circumstances which the Regulator considers exceptional, within 4 months from the date of the decision of the Regulator that it is appropriate for it to handle the dispute, make a binding determination to resolve the dispute. The Regulator shall provide the parties concerned with a full statement of the reasons on which its determination is based.

• (3) The Regulator shall publish clear and efficient dispute resolution procedures and shall ensure that all investigations and determinations are handled in accordance with those procedures.

• (4) The Regulator may decide not to initiate an investigation referred to in paragraph (2) where it is satisfied that other mechanisms, including mediation, are available to the parties that would better contribute to resolution of the dispute in a timely manner in accordance with the objectives set out in Regulation 4, or if legal proceedings in relation to the dispute have been initiated by either party.

• (5) Where the Regulator decides, under paragraph (4), not to initiate an investigation it shall inform the parties of such decision as soon as possible thereafter and the notification shall include the reasons for its decision.

• (6) If after the expiry of 4 months from the date of a decision referred to in paragraph (4) the dispute is not resolved and legal proceedings by either party in relation to the dispute are not in progress, the Regulator shall at the request of either party initiate an investigation and make a determination in accordance with paragraph (2).

• (7) In making a determination under this Regulation the Regulator shall have regard to its objectives under section 12 of the Act of 2002 and Regulation 4.

• (8) An undertaking to which a determination under this Regulation applies shall comply with the determination applicable to it.

• (9) An undertaking that —

• (a) fails to cooperate with an investigation under this Regulation, or

• (b) fails to comply with a determination made under this Regulation,

commits an offence and is liable on summary conviction to a class A fine.

• (10) Any obligations imposed on an undertaking by the Regulator in resolving a dispute shall respect the Directive, these Regulations and the relevant provisions of the Act of 2002.

• (11) The Regulator, having regard to the requirements of commercial confidentiality, shall publish a notice of a determination under this Regulation and the notice shall indicate where copies of, or information regarding, the determination may be obtained.

• (12) The procedure referred to in this Regulation does not preclude either party from bringing an action before the courts and is without prejudice to the right to bring an appeal.

Resolution of cross-border disputes

68.

• (2) Any party may refer such a dispute to the Regulator or to the other national regulatory authority or authorities concerned. Where the dispute affects trade between Member States the Regulator shall notify the dispute to BEREC in order to bring about a consistent resolution of the dispute in accordance with the objectives set out in Regulation 4.

• (3) Where a notification is made by the Regulator in accordance with paragraph (2), the Regulator shall await the opinion of BEREC before taking any action to resolve the dispute. In exceptional circumstances, where there is an urgent need to act, in order to safeguard competition or protect the interests of end-users, the Regulator may, either at the request of the parties or on its own initiative, adopt interim measures. Any interim measures adopted shall cease where the Regulator is satisfied that the dispute is resolved.

• (4) Any obligations imposed by the Regulator on an undertaking as part of the resolution of a dispute shall comply with the provisions of the Directive, take the utmost account of the opinion adopted by BEREC and be adopted within one month of such opinion. Where the Regulator makes a determination for the purpose of resolving a dispute under this Regulation paragraphs (8) to (12) of Regulation 67 shall apply.

Part 9 UNIVERSAL SERVICE OBLIGATIONS

Definition (Part 9)

69.

Affordable universal service

Designation

70.

• (a) adequate broadband, in accordance with paragraph (2), made available to the consumer, or

• (b) a voice communications service at the quality specified by the Regulator,

including the underlying connection, at a fixed location.

Definition of adequate broadband