(12)

One of the main obstacles to the development of a true level playing field for access seekers to electronic communication networks is the preferential treatment of the downstream businesses, for example the retail arm, of a vertically integrated operator with significant market power (SMP operator) through price and non-price discrimination (for example, discrimination regarding quality of service, access to information, delaying tactics, undue requirements and the strategic design of essential product characteristics). In this respect it is particularly difficult to detect and address non-price discriminatory behaviour through the mere application of a general non-discrimination obligation. It is, therefore, important to ensure true equivalence of access by strictly applying non-discrimination obligations and employing effective means to monitor and enforce compliance.

(13)

With regard to tackling and preventing non-price related discriminatory behaviour the Commission witnessed a considerable variation in the regulatory approach chosen by NRAs. The Commission considers that equivalence of inputs (EoI) is in principle the surest way to achieve effective protection from discrimination as access seekers will be able to compete with the downstream business of the vertically integrated SMP operator using exactly the same set of regulated wholesale products, at the same prices and using the same transactional processes. In addition, and contrary to an Equivalence of Output (EoO) concept, EoI is better equipped to deliver transparency and address the problem of information asymmetries.

(14)

NRAs are required under Article 8(4) of Directive 2002/19/EC to ensure that the regulatory obligations imposed in response to a designation of an operator as having SMP are based on the nature of the problem identified and proportionate in light of Article 8(5) of Directive 2002/21/EC and in particular Article 8(5)(b) thereof. Providing regulated wholesale inputs on an EoI basis is likely to trigger higher compliance costs than less strict forms of non-discrimination obligations due to the necessary system adjustments. In addition, an SMP operator would not be able to benefit from some vertical synergies as it would only be allowed to use for itself the same wholesale products that it provides or offers to its competitors. However, these higher compliance costs should be measured against the benefits of more vigorous competition downstream.

(15)

In this respect, requiring the SMP operator to provide legacy copper-based wholesale inputs over existing systems on an EoI basis is less likely to create sufficient net benefits to pass a proportionality test due to the higher costs of redesigning existing provisioning and operational support systems to make them EoI compliant. Conversely, requiring the SMP operator to provide NGA wholesale inputs, which in many cases are provided over new systems, on an EoI basis is likely to create sufficient net benefits, and thus be proportionate, given the comparatively lower incremental compliance costs to ensure newly built systems are EoI-compliant. Before supplying new inputs to its downstream divisions, the SMP operator should be able to build in EoI at the design stage for new products at a proportionate cost.

(16)

Given the potentially high compliance costs, it may be disproportionate to require the SMP operator to apply EoI at each and every level of the value chain. Therefore, NRAs would first need to identify the level at which, given their national circumstances, the imposition of EoI would deliver the greatest benefits to competition and innovation, and then assess whether EoI would also be appropriate and proportionate for additional levels as well. Given the ability of EoI to deliver faster innovation in the retail market, EoI should, in principle, be introduced at the deepest possible network level at which competition will be effective and sustainable in the long term. In Member States with a high number of small scale SMP operators, the imposition of EoI on each of these operators may be disproportionate.

(17)

Where NRAs conclude that an obligation to provide regulated wholesale inputs on an EoI basis is disproportionate, an EoO model should be applied, which ensures that the wholesale inputs provided to alternative operators — while not using the same systems and processes — are comparable, in terms of functionality and price, to those the vertically integrated SMP operator consumes itself.

(18)

A decision to impose EoI, where appropriate, justified and proportionate and following consultation in accordance with Articles 6 and 7 of Directive 2002/21/EC, is a non-discrimination obligation under Article 10 of Directive 2002/19/EC, without prejudice to: (i) the potential imposition of an obligation for functional separation under Article 13a of Directive 2002/19/EC where an NRA concludes that the appropriate obligations (including non-discrimination obligations such as EoI) have failed to achieve effective competition; (ii) any voluntary separation in accordance with Article 13b of Directive 2002/19/EC; and (iii) an analysis of the conditions of competition in the areas covered by the joint deployment of fibre-to-the-home (FTTH) networks, which is recommended in point 28 of Recommendation 2010/572/EU.

(19)

Volume discounts and/or long-term access pricing agreements are an important tool to foster NGA investment, in particular where take-up by consumers is still low, and can be compatible with an EoI and EoO approach. However, in order to ensure that market entry by efficient competitors is possible, NRAs should accept volume discounts by SMP operators to their own downstream businesses, for example their retail arm, only if they do not exceed the highest volume discount offered in good faith to third party access seekers. Equally, NRAs should accept long-term access pricing agreements by SMP operators to their own downstream businesses, e.g. its retail arm, only if they do not exceed the highest discount for long-term access that has been offered in good faith to third party access seekers.

(20)

Independently of the exact equivalence concept imposed by the NRA, where the NRA decides that a non-discrimination obligation under Article 10 of Directive 2002/19/EC is appropriate, proportionate and objectively justified, it is important for a level playing field to ensure that alternative access seekers can technically replicate the retail offer of the SMP operator on the basis of the regulated wholesale input they receive. While NRAs do not need to prescribe in detail the exact design of the relevant wholesale access products, they should ensure that a technical replicability test for a new retail service or bundle is carried out, ensuring that a number of factors are examined.

(21)

When carrying out the technical replicability test or assessing the results of the test carried out by the SMP operator, NRAs should also take into account the risk of monopolisation of the downstream market through the new offer and the impact on innovation. For example, the relevant wholesale access product should be available to access seekers within a reasonable time prior to the launch of a corresponding retail offer by the SMP operator to avoid any undue timing advantage for the SMP operator taking into account the need for an efficient alternative operator to develop and adapt its own systems and processes in order to be able to offer a competitive new retail service.

(22)

Given the importance for competition of ensuring technical replicability, it is crucial that the regulated SMP provider ensures technical replicability of new retail offers before their launch and at all times thereafter. Consequently, a technical replicability test may be carried out prior to and after the launch of a new retail offer, depending on when the NRA finds it appropriate. For example, when an NRA’s ability to make public the SMP operator’s business data is limited by confidentiality rules under its national law, the NRA may choose to conduct the technical replicability test after the launch of the retail services.

(23)

Given the lack of transparency concerning a comparison between the quality of service the SMP operator supplies to itself and the quality of service it provides to third-party access seekers, it is often difficult to detect discriminatory behaviour, and as a result to enforce non-discrimination in compliance under Article 10 of Directive 2002/19/EC. KPIs are the most appropriate tools to detect potential discriminatory behaviour and enhance transparency with respect to the delivery and quality of the SMP operator’s regulated wholesale access products in the relevant markets. In order to enhance transparency and foster market confidence, NRAs may facilitate through appropriate industry forums the agreement between the SMP operator and third-party access seekers on the detailed KPIs and ensure that such KPIs are audited and published in a manner that allows for the early detection of potential discriminatory behaviour. The KPIs should be related to the key activities in the provisioning cycle, covering all its stages, i.e. the ordering process, the delivery or provision of the service, the quality of service including faults and fault repair times, and migration by access seekers between different regulated wholesale inputs.

(24)

In order to fully ensure non-discrimination, KPIs should be complemented by SLAs and SLGs. Imposing SLAs ensures that access seekers are provided with an agreed quality of service, whereas the use of corresponding SLGs acts as a deterrent against discriminatory behaviour. NRAs should be closely involved in the development of SLAs, for instance, by approving the SLAs developed by the SMP operator as part of a regulatory reference offer.

(25)

A costing methodology that leads to access prices replicating as much as possible those expected in an effectively competitive market is appropriate to meet the objectives of the Regulatory Framework. Such a costing methodology should be based on a modern efficient network, reflect the need for stable and predictable wholesale copper access prices over time, which avoid significant fluctuations and shocks, in order to provide a clear framework for investment and be capable of generating cost-oriented wholesale copper access prices serving as an anchor for NGA services, and deal appropriately and consistently with the impact of declining volumes caused by the transition from copper to NGA networks, i.e. avoiding an artificial increase in wholesale copper access prices which would otherwise be observed as a result of customers migrating to the NGA network of the SMP operator.

(26)

Cost recovery is a key principle in a costing methodology. It ensures that operators can cover costs that are efficiently incurred and receive an appropriate return on invested capital.

(27)

A costing methodology that provides the appropriate ‘build-or-buy’ signal strikes an appropriate balance between ensuring efficient entry and sufficient incentives to invest and, in particular, to deploy NGA networks and hence deliver new, faster and better-quality broadband services.

(28)

The recommended costing methodology should ensure transparency and consistency within the Union. It should also ensure that specific national circumstances are reflected under a consistent modelling approach.

(29)

The bottom-up long-run incremental costs plus (BU LRIC +) costing methodology best meets these objectives for setting prices of the regulated wholesale access services. This methodology models the incremental capital (including sunk) and operating costs borne by a hypothetically efficient operator in providing all access services and adds a mark-up for strict recovery of common costs. Therefore, the BU LRIC + methodology allows for recovery of the total efficiently incurred costs.

(30)

The BU LRIC + methodology calculates the current costs on a forward-looking basis (i.e. based on up-to-date technologies, expected demand, etc.) that an efficient network operator would incur to build a modern network today, one able to provide all required services. Therefore, BU LRIC + provides correct and efficient signals for entry.

(31)

Where cable, fibre (FttX) and, to a lesser extent, mobile networks (in particular Long-Term Evolution or LTE mobile networks) are competing against copper networks, SMP operators react by upgrading their copper networks and progressively replace them with NGA to address this competitive threat. Therefore, since no operator would today build a pure copper network, the BU LRIC + methodology calculates the current costs of deploying a modern efficient NGA network.

(32)

Such an efficient NGA network would consist wholly or partly of optical elements, depending on national circumstances, and should be capable of delivering the targets of the Digital Agenda for Europe set out in terms of bandwidth, coverage and take-up.

(33)

Valuation of the assets of such an NGA network at current costs best reflects the underlying competitive process and, in particular, the replicability of the assets.

(34)

Unlike assets such as the technical equipment and the transmission medium (for example fibre), civil engineering assets (for example ducts, trenches and poles) are assets that are unlikely to be replicated. Technological change and the level of competition and retail demand are not expected to allow alternative operators to deploy a parallel civil engineering infrastructure, at least where the legacy civil engineering infrastructure assets can be reused for deploying an NGA network.

(35)

In the recommended costing methodology the Regulatory Asset Base (RAB) corresponding to the reusable legacy civil engineering assets is valued at current costs, taking account of the assets’ elapsed economic life and thus of the costs already recovered by the regulated SMP operator. This approach sends efficient market entry signals for build or buy decisions and avoids the risk of a cost over-recovery for reusable legacy civil infrastructure. An over-recovery of costs would not be justified to ensure efficient entry and preserve the incentives to invest because the build option is not economically feasible for this asset category.

(36)

The indexation method would be applied to calculate current costs for the RAB corresponding to the reusable legacy civil engineering assets. This method is preferred due to its practicability, robustness and transparency. It would rely on historical data on expenditure, accumulated depreciation and asset disposal, to the extent that these are available from the regulated SMP operator’s statutory and regulatory accounts and financial reports and on a publically available price index such as the retail price index.

(37)

Therefore, the initial RAB corresponding to the reusable legacy civil engineering assets would be set at the regulatory accounting value, net of the accumulated depreciation at the time of calculation and indexed by an appropriate price index, such as the retail price index.

(38)

The initial RAB would then be locked-in and rolled forward from one regulatory period to the next. The locking-in of the RAB ensures that once a non-replicable reusable legacy civil engineering asset is fully depreciated, this asset is no longer part of the RAB and therefore no longer represents a cost for the access seeker, in the same way as it is no longer a cost for the SMP operator. Such an approach would further ensure adequate remuneration for the SMP operator and at the same time provide regulatory certainty for both the SMP operator and access seekers over time.

(39)

Active copper lines are decreasing due to customers migrating to cable, fibre and/or mobile networks. Modelling a single efficient NGA network for copper and NGA access products neutralises the inflationary volume effect that arises when modelling a copper network, where fixed network costs are distributed over a decreasing number of active copper lines. It allows for progressively transferring the traffic volume from copper to NGA with deployment of and switching to NGA. Only traffic volume moving to other infrastructures (for example cable, mobile), which are not included in the cost model, will entail a rise in unit costs.

(40)

In the light of the principle of technological neutrality and in view of different national circumstances, NRAs need a degree of flexibility to model such a modern efficient NGA network. The NGA network can therefore be based on any of the various access technologies and network topologies available to operators for rolling out an NGA network.

(41)

An FttH network, an FttC network or a combination of both can be considered a modern efficient NGA network. Under this approach the cost calculated for the NGA network should be adjusted to reflect the different features of a copper network. This requires estimating the cost difference between an access product based on NGA and an access product based entirely on copper by making the relevant network engineering adjustments to the NGA model to determine the wholesale copper access price. When setting the economic life time of the assets in a modelled FttC network NRAs should take into account the expected technological and network developments of the different network components.

(42)

Where the topology of the NGA network to be modelled differs from the copper network to an extent that engineering adjustments to the NGA engineering model are not feasible, NRAs could obtain the copper cost by modelling an NGA overlay network, where two parallel networks (copper and fibre, either FttH or FttC) share to an extent the same civil infrastructure network. Under this approach, the inflationary volume effect would be neutralised for civil engineering assets because the modelled copper and fibre networks would share civil engineering assets. The unit costs of these assets, which represent the largest part of the costs of an access network, would therefore remain stable.

(43)

A sufficiently long transitional period is needed to avoid unnecessary disruption and provide a stable and transparent regulatory approach. Given that NRAs should implement the recommended costing methodology, and therefore operators need to adapt their business plans accordingly, a transitional period until 31 December 2016 is considered appropriate. NRAs are not required to maintain cost models for calculating wholesale copper access prices in circumstances when there is no ex-ante price regulation imposed, for example absent demand for such services.

(44)

In line with the principles of regulatory transparency and predictability as well as the need to ensure price stability, the Commission set out a band of prices within which it anticipates the Union’s average monthly full unbundled copper local-loop rental access price (net of all taxes) to fall when the recommended costing methodology is applied.

(45)

The main role of the band is to guide NRAs when implementing the costing methodology to meet the Recommendation’s overall objective of stability and predictability of copper access prices. Where, at the time of entry into force of this Recommendation, regulated monthly copper LLU access prices are outside the band in given Member States, NRAs implementing the recommended costing methodology in such Member States should do so as soon as possible. This is for them to assess whether the recommended costing methodology requires gradual price adjustments by 31 December 2016, in particular in those Member States where access prices are currently not cost-oriented, and which are thus likely to require more significant price adjustments. For the avoidance of doubt, this Recommendation does not require NRAs to impose access prices within the band when the NRA applies the recommended costing methodology or the methodology used pursuant to point 40.

(46)

Access prices are considered to be stable even where they follow a trend in nominal terms. They should, however, not fluctuate significantly over the relevant time period, thus remaining predictable.

(47)

In accordance with the principles of regulatory transparency and predictability as well as the need to ensure pricing stability, currently applied methodologies other than the recommended costing methodology may also meet the conditions set out in point 40. The application of this principle to individual Member States should be assessed on a case-by-case basis and warrants early assessment through notification to the Commission, BEREC and other NRAs ahead of 31 December 2016.

(48)

For NRAs with limited resources, an additional transitional period beyond 2016 may exceptionally be needed to prepare the recommended cost model. In such circumstances, an NRA should consider setting interim prices based on a benchmark that only considers an average of the access rates set by NRAs in compliance with the terms of this Recommendation. In the interim period, NRAs concerned may request BEREC’s practical support and guidance to overcome this limitation of resources and, in particular, the cost of implementing the recommended costing methodology.

(49)

Due to current demand uncertainty regarding the provision of very high-speed broadband services it is important in order to promote efficient investment and innovation, in accordance with Article 8(5)(d) of Directive 2002/21/EC, to allow those operators investing in NGA networks a certain degree of pricing flexibility to test price points and conduct appropriate penetration pricing. This would allow SMP operators and access seekers to share some of the investment risk by differentiating wholesale access prices according to the access seekers’ level of commitment. This could result in lower prices for long-term agreements with volume guarantees, which could reflect access seekers taking on some of the risks associated with uncertain demand. In addition, pricing flexibility at wholesale level is necessary to allow both the access seeker and the SMP operator’s retail business to introduce price differentiation on the retail broadband market in order to better address consumer preferences and foster penetration of very high-speed broadband services.

(50)

In line with points 48-57, to prevent such pricing flexibility leading to excessive prices in markets where SMP has been found, it should be accompanied by additional safeguards to protect competition. To this end, the stricter non-discrimination obligation, i.e. EoI and technical replicability, should be complemented by guaranteed economic replicability of downstream products in conjunction with price regulation of copper wholesale access products.

(51)

In order to ensure transparency and to facilitate the monitoring of the evolution of the investment environment for NGA broadband as well as of competitive conditions NRAs should ask operators to provide the NRA with up-to-date information, including investment and NGA roll-out plans on a regular basis. The results of any such monitoring exercise will also serve as an input for the monitoring process by the dedicated BEREC and Commission network of experts as referred to in recital 69.

(52)

In view of the benefits of pricing flexibility in these circumstances, under the recommended approach, wholesale access prices for passive NGA wholesale inputs or non-physical or virtual NGA wholesale inputs offering equivalent functionalities are deemed to be sufficiently constrained (i.e. price-related competition problems are considered to be effectively addressed) when: (i) there is a demonstrable retail price constraint resulting from the infrastructure competition or a price anchor stemming from cost oriented wholesale copper access prices; and (ii) the ex-ante economic replicability test is in place in those cases where wholesale price regulation should not be imposed; and (iii) there is an obligation of providing wholesale access services on the basis of EoI. In other words, where EoI is applied and NRAs consider that the above competitive safeguards are in place, they should not impose a regulated access price for those NGA wholesale inputs.

(53)

For active NGA wholesale inputs, sufficient competitive safeguards exist if access seekers can rely on upstream products in the market for network infrastructure access (for example unbundled access or virtually unbundled access), which are provided on an EoI basis, provided that the actual take-up of such upstream products or the presence of alternative infrastructures create a demonstrable retail price constraint, so that no additional safeguards are necessary at the wholesale level.

(54)

Such demonstrable retail price constraint would not be sufficiently strong to conclude that the relevant wholesale market is effectively competitive and therefore that no operator has SMP. This retail price constraint, however, should prevent the operator that has SMP at the wholesale level from setting excessive retail prices.

(55)

The non-imposition or lifting of regulated wholesale access prices on NGA networks under points 48 and 49 is without prejudice to measures taken to address insufficient margins identified under the ex-ante economic replicability test as set out in this Recommendation for the purpose of safeguarding competition in cases where wholesale price regulation should not be imposed on the SMP operator.

(56)

If the product offered by the SMP operator on the legacy access network is no longer able to exercise a demonstrable retail price constraint on the NGA product (for example in the event of a copper switch-off), it could in principle be replaced by an NGA-based product that is tailored to have the same product features. However, it is not envisaged that such an NGA-based anchor will be required in the immediate future or before 2020.

(57)

The process for implementing EoI should be established by the NRA after having consulted the SMP operator and interested parties. A detailed roadmap setting the key milestones necessary for the complete implementation of EoI for the relevant access products should be part of the adopted measure.

(58)

The benefit of a firm commitment to timely implementation of non-discrimination measures should provide sufficient safeguards for allowing pricing flexibility before full implementation of the roadmap, and can have an immediate positive effect on investment incentives. On the other hand, some discretion for NRAs on the timing of implementing pricing flexibility is necessary, in order to safeguard competition, in particular to avoid the risk of disrupting existing access agreements.

(59)

A failure by the regulated SMP operator to abide by its commitments in the roadmap should result in consequences that have a deterrent effect. In particular, non-compliance with one or several milestones of the roadmap should lead to a reversal of the assumption that EoI has been imposed, as expressed in point 51 of this Recommendation. As a result, the non-discrimination conditions for not imposing or maintaining regulated wholesale access prices on NGA networks are no longer met and should lead to the reimposition of regulated wholesale access prices or to the NRA’s making use of its powers to impose penalties in accordance with the Regulatory Framework.

(60)

For regulated wholesale access prices to be imposed following failure to comply with the non-discrimination obligation as established in point 54 without the need for NRAs to conduct a new market analysis, such possible consequence should be part of the initially notified measure and the market data on which the NRA based its initial market analysis should not have significantly changed. The absence of the requirement to conduct a new market analysis is without prejudice to the need to notify any amendments of remedies according to the Article 7 procedure.

(61)

In order to establish whether alternative access seekers can economically replicate a downstream offer provided by the SMP operator with the regulated wholesale input available, in cases where wholesale price regulation should not be imposed, an NRA should undertake an economic replicability test.

(62)

Given the uncertainties surrounding current demand for NGA-based retail services, SMP operators whose NGA-wholesale inputs are not subject to regulated access prices can use penetration pricing strategies in order to foster retail demand for such NGA-based retail services. The purpose of the economic replicability test is to ensure, in combination with the other competitive safeguards introduced such as EoI, the technical replicability test, and a demonstrable retail price constraint resulting from a copper anchor or alternative infrastructures, that SMP operators do not abuse this pricing flexibility in order to exclude (potential) competitors from the market. The guidance provided in Annex II is limited to the application of point 56.

(63)

Such a test will be without prejudice to ex-post margin squeeze tests applied pursuant to competition law by the Commission and/or national competent authorities. In addition, NRAs may also apply an ex-ante margin squeeze test to regulated wholesale inputs in order to ensure that wholesale access pricing of copper-based access products does not hinder competition at retail level or to ensure an adequate economic space between the different copper access inputs. However, penetration pricing strategies should not be considered for legacy copper-based inputs given the maturity of the market and the cost orientation generally applicable to copper-based wholesale inputs.

(64)

NRAs should ensure that the margin between the retail price of the SMP operator and the price of the NGA wholesale input covers the incremental downstream costs and a reasonable percentage of common costs. Where wholesale price regulation for NGA wholesale inputs should not be imposed on the SMP operator when additional safeguards are implemented in accordance with this Recommendation, a lack of economic replicability can be demonstrated by showing that the SMP operator’s own downstream retail arm could not trade profitably on the basis of the upstream price charged to its competitors by the upstream operating arm of the SMP operator (‘equally efficient operator’ (EEO) test). The use of the EEO standard enables NRAs to support the SMP operators’ investments in NGA networks and provides incentives for innovation in NGA-based services.

(65)

Where specific market circumstances apply, such as where market entry or expansion has been frustrated in the past, NRAs may make adjustments for scale to the SMP operator’s costs, in order to ensure that economic replicability is a realistic prospect. In such cases, the reasonably efficient scale identified by the NRA should not go beyond that of a market structure with a sufficient number of qualifying operators to ensure effective competition.

(66)

The NRA should set out and make public in advance in its adopted measure following a market analysis the procedure and parameters it will apply when running the ex-ante economic replicability test. The NRA may run the test before the launch of a new retail offer by the SMP operator, e.g. if the NRA considers it appropriate to align the timing of the economic replicability test with the technical replicability test if also undertaken before launch. The NRA need not to run the test for each and every new retail offer but only in relation to flagship products to be identified by the NRA. An NRA may run the test at its own initiative, for example in the initial stages of the implementation of a measure that allows pricing flexibility on NGA networks, particularly where regulated wholesale access prices were imposed in the past, or to respond to changes in the structure of the market, for example as a result of technological developments.

(67)

The economic replicability test set out by the NRA in advance should be adequately detailed and should include as a minimum a set of relevant parameters in order to ensure predictability and the necessary transparency for operators. NRAs should apply a LRIC + model while taking into account the SMP operator’s audited downstream costs and assess the margin earned between the most relevant retail products including broadband services (flagship products) and the regulated NGA access input most used, or identified, under a forward-looking approach, as the most relevant for delivering the retail products for the market review period in question. The design of the test, applying to the SMP operator’s audited downstream costs and only for flagship products, aims to ensure that NGA investments and the effect of the recommended pricing flexibility are not hindered by this safeguard. In order to exclude cross-subsidisation between different products in a bundle or portfolio, NRAs should conduct only a single-level test, i.e. between the retail services and the most relevant NGA access input for the access seekers (for example fibre access at the cabinet, virtual unbundling). However, a new NGA access input can in time become more prominent (for example fibre unbundling at the ODF) so the economic replicability test should be run with reference to this new input instead of the input initially most used. Should national competitive circumstances show a difference between geographic areas in terms of the NGA access input used (for example in rural and densely populated areas) NRAs should vary the test based on specific inputs identified as the most relevant.

(68)

NRAs might not be able to find the abovementioned competitive constraints across the entire defined market. Where the NRA cannot conclude that the different competitive conditions are stable over time and are such that they could justify the definition of subnational markets, NRAs should nevertheless consider responding to these diverging competitive conditions by applying differentiated remedies, i.e. by lifting wholesale price regulation for only those areas where the necessary competition safeguards can be established. Where an NRA considers that competitive and regulatory conditions are such that the SMP operator is sufficiently constrained in its price setting, the NRA may refrain, in application of the Regulatory Framework, from imposing price regulation. The implementation of functional or voluntary separation in accordance with Article 13a or 13b of Directive 2002/19/EC (Access Directive) respectively should be duly taken into account in the assessment of the appropriateness of not imposing price regulation on next generation networks.

(69)

BEREC and the Commission are in agreement that the implementation of this Recommendation will be closely followed in a dedicated network of experts between the Commission and BEREC in order to monitor the practical impacts of the Recommendation, notably the impact on investment, competition and retail prices and provide, as necessary, further guidance to the NRAs. This should aid to address any unintended consequences in a timely and cooperative manner. This dedicated network of experts will benefit from the input provided by NRAs regarding up-to-date information on operators’ investment and NGA roll-out plans as provided for in point 55,

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