N legislatedativas - A Case Study in the Swedish Administrative Act

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1 ANNEX IX - SWEDEN A. REGULATOR - GENERAL FUNCTIONS A.1. Speed of process 1. What is the average timeframe for obtaining reservation of numbers? According to the Swedish NRA, ("PTS"), obtaining reservation of numbers typically takes 4 to 6 weeks. 2. What is the average timeframe for reviewing reference interconnection offers (assessed over the past three years)? PTS reviews standard interconnection offers annually, and this takes 4 months. 3. In practice, what is the average timeframe for the negotiation of an interconnection agreement for a new entrant which does not yet have an interconnection agreement with the incumbent operator? In practice, no negotiations take place. TeliaSonera imposes its RIO as a "take it or leave it" offer and only consents to a modification once the matter has been referred for mediation. Companies seeking interconnect can therefore have an agreement within one week. To justify its conduct, TeliaSonera invokes the non discrimination principle, claiming that all interconnect agreements must be worded identically to avoid differentiation between operators. A.2. Transparency 4. Is your NRA required to hold public consultations prior to deciding on issues of general interest? While there is no general obligation to hold public consultations, in practice, they are used frequently. 5. Explain how the decision making process works within the NRA. Does it provide at any or some stage of the procedure, some transparency or visibility on the decision making process? Once interested parties have submitted their written observations, the decision of the NRA is taken in a closed NRA forum. No details of the decision making process are disclosed. 6. Is your NRA required to effectively motivate its decisions? If so, is there any possibility of appeal in the event of the NRA's violation of its obligation to motivate its decision? Within what timeframe? Generally, all Government decisions must be motivated. However, the Swedish Administrative Act provides that in certain circumstances, the reasons may be wholly or partially omitted. If the NRA neglects to motivate its decision, anyone who is affected by the decision may request the underlying motivation of a decision. Decisions may, however, not be appealed merely because the NRA did not provide a motivation. Under Swedish law, a decision may only be appealed if the decision affects a party adversely. Absence of motivation is not deemed to have an adverse affect. 7. Is your NRA required to publish all its decisions upon their adoption? - 1 -

2 Yes, Swedish law provides for a publication requirement. 8. Does your NRA have a "management plan" disclosing its action plan on an annual basis? If yes, is it public? There is no formal management plan. According to the PTS, there are plans to create and publish management plans in the near future. The PTS publishes a retrospective annual report ( A.3. Effectiveness of sanctions and scale of resources 9. Is your NRA entrusted with the power to impose fines? If so, up to what level? Does it include also the possibility of imposing periodic penalty payments or of suspending the commercial launch of services? Yes. Sanctioning powers include the imposition of fines, withdrawal and suspension of permits, and modification of permits. 10. Are the powers of your NRA clearly defined by law? Yes. The Law on Electronic Communication clearly sets out these powers. 11. What is the number of employees employed for general regulatory issues (excluding frequency and numbering management)? How many competition economists are included in the staff? According to the NRA, it has about one employee per inhabitants (30 in total) involved in telecommunications. This is considered sufficient to timely handle workload. 12. What are the specific procedures for selecting NRA's personnel? (Specific exams/ general State recruitment exams) The NRA is required to publish vacancies. As an independent governmental authority, it controls the selection criteria for hiring its employees. Generally speaking, applicants are evaluated on their merits. 13. Does your NRA have the financial freedom to set levels of remuneration to attract appropriate staff? Compensation is comparable to other civil servants. It is our opinion that the NRA has no difficulties to attract appropriate staff. 14. Can your NRA have recourse to outside expertise such as consultants? Yes, but there are budget restrictions on using outside expertise. A.4. Effectiveness of appeal procedure 15. Does the appeal of a NRA decision suspend the binding effects of the decision in question? No. The Court of Appeal can, however, suspend the NRA's decision. 16. If the appeal does not suspend the binding effects of the decision of the NRA, what is the applicable standard to obtain such suspension and how is it applied in practice? The Court of Appeal only grants such injunctions in the event of compelling reasons, such as risk of irreversible financial losses. The appeal procedure is organised under general administrative law and is not specific to the telecommunications sector. Suspension can be obtained if irreversible financial losses are demonstrated. - 2

3 17. What is the percentage of decisions that have been appealed? Almost all decisions which negatively impact TeliaSonera are being appealed. 18. What is the average timeframe for an appeal procedure? Up to one year. A.5. Independence 19. Is your NRA subject to any injunctions from political authority (other than through removal), when it grants authorizations (services/networks licences, frequency and number authorizations) or enforces SMP regulations (e.g., ex ante approval of standard interconnection offers, compliance with cost accounting separation)? The NRA is fully independent, as the Swedish Constitution prohibits political interference in the official duties of a governmental authority or agency. The Government may only act by issuing governmental regulations or by proposing new legislation to the Parliament. 20. What is the duration of office of your NRA's management? Is there a possibility of reappointment? The Board of Directors of the NRA is appointed for one year, but can be discharged before the end of the appointment. The head of the NRA, Director-General Nils Gunnar Billinger, was appointed for 6 years starting on February 11, The Director-General must be approved with the consent of at least 2 members of the Board of Directors. The Board of Directors and the Director-General may be re-appointed. 21. What are the grounds for removal of your NRA's management? According to the conditions of his appointment, the Director-General cannot be discharged. Under exceptional circumstances, the Director-General may be transferred to another position within another governmental authority or agency (except in the event of a conviction for criminal offence). 22. What are the eligibility requirements for your NRA's management? The management and employees of the NRA may not conduct business, or be employed by companies active in the telecommunications or postal sectors. There are no specific qualification requirements to be a member of the Board of Directors. However, experience shows that only a limited group of individuals are potential candidates. 23. Are clear objectives assigned to the NRA for its long term actions? Are such objectives set in the law or defined by the NRA's? The NRA's objectives are to implement the objectives of the Swedish Law on Electronic Communications. A structural conflict may exist in that both the NRA and the Swedish Competition Authority share oversight powers in ensuring fair competition in Sweden. Operators and other market players could therefore engage in forum-shopping among these authorities. 24. What percentage of the incumbent share capital is held by the Government? Does it confer control? - 3

4 Pursuant to the Telia-Sonera merger, the two majority shareholders are the Finnish and the Swedish Governments, which own respectively 19% and 45,3% of the shares/votes. Both Governments exercise a remote but effective control over the entities. B. REGULATORY DISPUTE SETTLEMENT B.1. Speed of process 25. What was, over the past two years, the average timeframe for obtaining a decision from your NRA acting in a capacity as a dispute settlement body? Two months. 26. Can your NRA adopt interim measures? No. Interim measures can be imposed by the administrative courts and the Competition Authority. B.2. Due process 27. Is the dispute settlement process subject to the principle of contradiction? Yes. Under the Swedish Administrative Act, it is a general obligation to communicate documents to other parties. 28. What are the possibilities to appeal a decision of the NRA acting as dispute settlement body? According to the Administrative Act, all decisions can be appealed. An appeal to a NRA decision can be brought before the administrative courts. This is more the rule than the exception. B.3. Effectiveness of sanctions 29. Is your NRA entitled to impose fines or periodic penalty payments? Yes, the NRA may impose administrative fines in connection with orders and prohibitions. Periodic penalty payments do not exist, since fines are considered sufficient. 30. Does your NRA have the power to enforce its own decisions? Decisions are enforced by the Enforcement Administration (the "EA"). Any threat by the NRA to use the EA is enough to ensure that its decisions are enforced. In practice, therefore, the NRA can enforce its own decision. B.4. Effectiveness of appeal procedure 31. Does the appeal of a NRA decision suspend the binding effects of the decision in question? An appeal does not automatically suspend the binding effect of a decision. 32. If the appeal does not suspend the binding effects of the decision of the NRA, what is the applicable standard to obtain such suspension and how is it applied in practice? See Question What is the percentage of decisions that have been appealed? - 4

5 Although there is no publicly available data, it appears that about 50% of the decisions are being appealed. 34. Average timeframe for an appeal procedure? Up to one year. C. APPLICATION OF ACCESS REGULATION C.1. Cost orientation 35. Is there a detailed model covering each and every or all regulated services for SMP operators? Detailed cost models for SMP operators exist ( KOMPIS ), and are made publicly available, though some proprietary data of TeliaSonera is omitted. LRAIC cost orientation methods are due to be implemented in The PTS has published and consulted on the creation of the forthcoming LRAIC system. 36. What is the type of cost accounting methodology used? The cost model is based on the methodology of current cost accounting. The NRA has previously objected to TeliaSonera s depreciations on fixed assets, which resulted in a reduction of prices for copper access by 35%. According to the NRA, LRAIC-based cost accounting methodology will be implemented in the near future. 37. Does the NRA have the power to seek cost orientation of retail tariffs? Yes. The NRA has the power to monitor retail tariffs for SMP operators. This power is, however, rarely used in practice. C.2. Cost accounting separation 38. Are SMP operators subject to effective cost accounting separation obligations? Yes, there is a cost accounting separation obligation. However, no cost accounting separation information is made publicly available, which limits the ability to verify the effectiveness of enforcement of this obligation. C.3. Availability of information 39. Is there any information available (e.g., number of subscribers, key for cost allocation between network components, WACC) enabling competitors/third parties to understand cost models and assess regulated operators' compliance with their cost orientation and accounting separation obligations? Sufficient information is available to enable third parties to understand the cost models, although some confidential business data is omitted. However, if an operator disputes an interconnection cost, the NRA can evaluate the elements of price structure and impose a change. Cost structure details are generally not made available to the plaintiff. 40. Are the accounts drawn in accordance with cost accounting separation effectively published? Accounts are not published and only limited information is available upon request. - 5

6 C.4. Procedures satisfying access requests in an effective and timely fashion 41. What is the procedure for the negotiation of a reference interconnection agreement or standard interconnection agreement with the incumbent? If there is no standard agreement, please elaborate. What is the timeframe for entering such an agreement - are there any material barriers to entering such an agreement? The standard RIO is non-negotiable, but can be entered into within one week. 42. Is there a standard procedure available for operators to negotiate alternative access products/services not explicitly provided for in the standard reference interconnection offers? There is no formal procedure or timeline for the negotiation of alternative access services. The requirements placed on an operator requesting a service outside the scope of the RIO vary from product to product and depending on the bargaining power of the requesting operator. C.5. Rights of way 43. Are operators entitled to free rights of way on public land? No. There are no free rights of way guaranteed under Swedish Law. TeliaSonera has negotiated a general right to dig in Sweden; other operators must seek permission from the local authorities on a case by case basis. The PTS has acknowledged that it is difficult to obtain permission and that this works to TeliaSonera's benefit. D. KEY ACCESS PRODUCTS D.1. Voice interconnection 44. What is the level of interconnection tariffs for call termination with interconnection at the tandem switch level? Termination single transit : 0,90 Eurocents (9 th Implementation Report, Annex 1, p. 25). Termination double transit : 1,03 Eurocents (9 th Implementation Report, Annex 1, p. 25). 45. Do detailed cost models for SMP operators exist? Yes. A detailed cost orientation model exists, and is publicly available. 46. Does the NRA have the power to apply a price squeeze test and the power to review the level of retail tariffs on the basis of alleged discriminatory access at wholesale level? Has your NRA applied this power effectively? All price squeeze issues fall within the powers of the Swedish Competition Agency, and outside the power of the NRA. The Swedish Competition Agency has never acted in telecommunications matters despite numerous complaints from new entrants. D.2. Leased lines and partial private circuits offer 47. Are there any wholesale private line offers ("ppcs") in your country? No. There is no indication that a one leg ppc offer will be in place in There is currently a Skanova Backbone offer, which is tantamount to a two legged PPC. This does not fulfil the cost effectiveness criteria of a one leg PPC. - 6

7 48. Comparison of tariffs for wholesale leased lines offers for 2Mbits/s on average distance of 2 km? EUR per year (9 th Implementation Report, Annex 1, p. 86) 49. Do detailed cost models exist for SMP operators? Yes. 50. Does the NRA have the power to apply a price squeeze test and the power to review the level of retail tariffs on the basis of alleged discriminatory access at wholesale level? Has your NRA applied this power effectively? See Question Are there effective measures to prevent discrimination in the provision of ppcs and leased lines? The NRA has effective measures to prevent discrimination. While TeliaSonera is not required to publicly disclose provisioning times, it is required to submit such information to the NRA. D.3. Fixed to mobile 52. Do detailed cost models exist for SMP operators? No detailed cost model is publicly available, but one is being developed during the course of The NRA has tried to impose cost reductions on mobile operators. However, all such decisions have been appealed and have not thus proven effective. 53. What is the average interconnection charge for fixed to mobile calls? 15,52 Eurocents/min. (9 th Implementation Report, Annex 1, p. 29). 54. Does the NRA have the power to apply a price squeeze test and the power to review the level of retail tariffs on the basis of alleged discriminatory access at wholesale level? Has your NRA applied this power effectively? See Question 46. D.4. Local loop unbundling 55. Is there a detailed cost oriented model in relation to ULL? Pursuant to a complaint submitted by Bostream AB (an ADSL provider), the NRA imposed ULL tariffs on the basis of a LRIC cost model. Indications are that ULL pricing is likely to increase as a result of the NRA's review. 56. What is the tariff charged for ULL access? 25.4 EUR/month (9 th Implementation Report, Annex 1, p.61). 57. What is the number of unbundled lines as a percentage of total lines? 0,1 % (ECTA Scorecard). 58. Does the NRA have the power to apply a price squeeze test and the power to review the level of retail tariffs on the basis of alleged discriminatory access at wholesale level? Has your NRA applied this power effectively? - 7

8 See Question 46. D.5. Wholesale DSL products 59. Is there a detailed cost oriented model in relation to wholesale DSL products? Yes. Currently, Fully Distributed Costs, but will be LRIC during the course of Is a wholesale offer published so as to enable launch at the same time as the SMP-operator? Yes, although wholesale DSL offers are not a regulated product in Sweden. The NRA has proposed to regulate DSL offers in the Telecommunications Act. Skanova does not consider itself an SMP operator on the SDSL/VDSL market segment. As such, it does not consider itself required to present a wholesale offer until the NRA forces it to do so. 61. Are the terms of the wholesale offer equivalent to the terms benefited by the SMP-operator downstream operating retail arm? No, prices are uncompetitive. The Swedish Competition Authority is currently investigating whether the terms offered in the various DSL products from TeliaSonera are equivalent to the terms offered to other companies within the TeliaSonera company group. Presently, the NRA does not verify compliance with the non-discrimination obligation. 62. Are there volume order requirements per site? According to TeliaSonera, there are no volume order requirements per site in the present unregulated DSL offer. The proposed regulation of DSL offers does not include such a restriction. On the L2 (ADSL ATM) and L4 (OEM with Radius server) offers, there are no volume requirements. On the L1 (LLUB + DSLAM ports), a partial up front payment must be made for N ports per DSLAM as a booking cost, but not for the LLUB. 63. Is there an access option at the nearest ATM node? Yes. According to TeliaSonera, there is such an option in the unregulated DSL offer. The proposed regulation of DSL offers does not regulate this matter. Lists of all ATM nodes exist in the ADSL ATM offer. 64. Is a price squeeze test applied by your NRA? Does your NRA have the power to review the level of retail tariffs on the basis of alleged discriminatory access at wholesale level of SMP-services; and if so does it apply such power in practice? See Question 46. The PTS has publicly acknowledged the existence of price squeeze. E. IMPLEMENTATION OF THE NEW REGULATORY FRAMEWORK 65. Has the new regulatory framework been transposed in your country? If so, when? Yes, on 23 July Market reviews are ongoing. 66. Has the NRA completed the market analysis? 0 registered "Article 7" notifications received by Commission (see - 8