Poland backs down on b'band


BRUSSELS -- Poland has caved in to pressure from the European Commission and agreed not to impose any bureaucratic regulation on its emerging broadband market.

The turnaround, confirmed Monday, comes four months after the EC told Polish regulator Urzad Regulacji Elektronicznej (UKE) that it was breaking EU law with its attempt to clamp down on the former state-owned telecoms provider, Telekomunikacja Polska (TPSA).

UKE wanted to rule on the retail prices, promotions and terms of conditions set by the TPSA, but the commission -- the EU's antitrust authority -- said this went beyond its regulatory remit.

UKE claimed it had to intervene as TPSA had too much market power. While taking note of UKE's concerns about possible anticompetitive behavior in the Polish retail broadband market, the EC said that regulation at the wholesale level should be enough to ensure that alternative operators emerged.

Indeed, the EC called on the regulator to actively enforce regulation at wholesale level to improve competition in the Polish broadband market.

"I welcome the Polish regulator's decision to impose measures at wholesale level," EU Telecoms Commissioner Viviane Reding said. "This will make a significant contribution to the development of competition in the Polish broadband market and will accelerate the development of this basic infrastructure of the information society."

The commission is considering extending the reach of telecommunications regulations after concluding last year that many market sectors across the EU remain dominated by the former public monopolies. However, it said Poland is going about it the wrong way, partly by focusing on retail markets instead of wholesale markets and partly because it defines broadband and dial-up Internet access markets as one market.

The commission has issued repeated warnings about what it sees as heavy-handed market intervention by the current nationalist government in Warsaw. While the Polish telecoms regulator has only existed since January 2006, the commission almost immediately raised questions about its independence and impartiality.

Confused market conditions partially explain Poland's poor broadband rate. By the end of last year, Poland had the EU's third-lowest broadband penetration rate, just 5.2%, and well below the EU's 16.9% average.