Comments to this draft measure are due to be sent to Mr. G.C. Boogert at by 4 December 2005.

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1 PO Box LK The Hague Telephone Telefax Visiting address: Zurichtoren Muzenstraat WB The Hague The Netherlands Summary notification form relating to a draft decision of the commission of the Independent Post and Telecommunications Authority in the Netherlands with respect to the relevant markets for the minimum set of leased lines (market 7). This summary notification form relates to a draft decision of the commission of the Independent Post and Telecommunications Authority in the Netherlands (hereafter: the commission) with respect to the relevant markets for the minumum set of leased lines (market 7). In accordance with article 6b.2 of the Telecommunications Act the commission notifies draft measures which would affect trade between Member States to the Commission of the European Communities and to the national regulatory authorities. The commission gives both to the Commission of the European Communities and to the national regulatory authorities the opportunity to make comments to the draft measure. Comments to this draft measure are due to be sent to Mr. G.C. Boogert at by 4 December The Hague, 4 November

2 Section 1 Market definition 1.1 The affected relevant product/service market. The relevant product market consists of the market for - national analogue leased lines; (see paragraph 15.1) - national leased lines <2Mbit/s; (see paragraph ) - national leased lines 2Mbit/s; (see paragraph ) - international analogue leased lines; (see paragraph ) - international <2Mbit/s leased lines; and (see paragraph ) - international 2Mbit/s leased lines. (see paragraph ) 1.2 The affected relevant geographic market. The relevant geographic market for the minimum set of leased lines is the Netherlands. 1.3 Summary of the opinion of the Netherlands Competition Authority The Netherlands Competition Authority (NMa) agrees with the market definition and dominance analyses and conclusions drawn by the commission, as confirmed in a letter to the commission dated 15 June Overview of the results of the public consultation to date on the proposed market definition See separate chapter 21, Consultatie ontwerpbesluit huurlijnen. The public consultation has not given the commission cause to make material changes in the proposed market definition. 1.5 Differences with the Commission Recommendation on relevant markets The commission has included so called n times 64 kbit/s leased lines as part of the relevant market <2Mbit/s. Also has the commission concluded separate relevant markets for <2Mbit/s and 2Mbit/s leased lines. 2

3 Section 2 Designation of undertakings with significant market power 2.1 Name(s) of the undertaking(s) designated as having individually or jointly significant market power or where applicable, the name(s) of the undertaking(s) which is (are) considered to no longer have significant market power. Koninklijke KPN N.V. and her group entities (hereafter: KPN) is considered to have significant market power on the following relevant markets: - national analogue leased lines; (see paragraph 7.6) - national leased lines <2Mbit/s; and (see paragraph 16.1) - international analogue leased lines. (see paragraph 17.1) KPN is considered to have no (longer) significant market power on the following relevant markets: - national leased lines 2Mbit/s; (see paragraph 16.2) - international leased lines <2Mbit/s; and (see paragraph 17.2) - international leased lines 2Mbit/s.(see paragraph 17.3) 2.2 Criteria relied upon for deciding to designate or not an undertaking as having individually or jointly with others significant market power. The criteria relied upon are: For the relevant market national analogue leased lines: - no duplication possibilities; and For the relevant market national leased lines <2Mbit/s: - network coverage advantages; - cost advantages related to economies of scale and scope; - diversification advantages; - network cannot be easily duplicated; and For the relevant market international analogue leased lines: - no competitive pressure; and For the relevant market national leased lines 2Mbit/s: - no network coverage advantages; - cost advantages related to economies of scope and only limited cost advantages related to economies of scale; - diversification advantages; - network can be easily duplicated; and 3

4 And for the relevant markets international leased lines <2Mbit/s and 2Mbit/s: - limited economies of scale and scope; - network cannot be easily duplicated; and - low entry barriers. 2.3 Name of the main undertakings (competitors) present / active in the relevant market. The main undertakings for the respective relevant market are for: - national analogue leased lines: KPN; - national leased lines <2Mbit/s: KPN; - international analogue leased lines: KPN; - national leased lines 2Mbit/s: KPN, Priority Telecom and Colt; - international leased lines <2Mbit/s: KPN, MCI and Belgacom; and for - international leased lines 2Mbit/s: Colt, Belgacom and BT. 2.4 Market shares of the undertakings mentioned above and the basis of their calculation (e.g., turnover, number of subscribers). These market shares are based on the total turnover for the year 2003 and an estimate provided by all provider for the year The market shares within the respective relevant markets are for: - national analogue leased lines: KPN [100%] - national leased lines <2Mbit/s: KPN [95-99%] - international analogue leased lines: KPN [100%] - national leased lines 2Mbit/s: KPN [30-40%], Priority Telecom [20-30%], Colt [10-20%] - international leased lines <2Mbit/s: KPN [40-50%], MCI [20-30%], Belgacom [10-20%] - international leased lines 2Mbit/s: Colt [30-40%], Belgacom [20-30%], BT [20-30%] 2.5 Summary of the opinion of the national competition authority where provided. The Netherlands Competition Authority agrees with the conclusions drawn by the commission, as confirmed in a letter to the commission dated 15 June Summary of the results of the public consultation to date on the proposed designation(s) as undertaking(s) having significant market power (e.g., total number of comments received, numbers agreeing/disagreeing). See separate chapter 21, Consultatie ontwerpbesluit huurlijnen. The public consultation has not given the commission cause to make material changes regarding undertakings with significant market power. 1 The letter is included in Annex H 4

5 Section 3 Regulatory obligations 3.1 Legal basis for the obligations to be imposed, maintained, amended or withdrawn The commission imposes the following obligations on the market for national analogue leased lines: - Tariff regulation, based on article 3 (1), of the policy on the minimum set of leased lines; - The obligation to use a cost-allocation system that the commission has determined or approved of, based on article 3 (2), of the policy on the minimum set of leased lines; - The obligation to present the commission in the first week of may of each year, starting on January 1 st 2006, with the results of the cost-allocation system over the previous year, based on article 3 (3), of the policy on the minimum set of leased lines and article 6a.13 (3) of the Telecommunications Act; - Period discounts are not allowed, based on article 3 (1), of the policy on the minimum set of leased lines. The commission imposes the following obligations on the market for national leased lines <2Mbit/s: - Access, based on article 6a.12 (a) of the Telecommunications Act; - Unbundling, based on article 6a.12 (b) of the Telecommunications Act; - Transparency, based on article 6a.12 (c) of the Telecommunications Act; - Tariff regulation, based on article 6a.13 (1) of the Telecommunications Act; The commission imposes the following obligations on the market for international analogue leased lines: - Obligation to supply, based on article 6a.19 of the Telecommunications Act; - Non discrimination, based on article 6a.19 of the Telecommunications Act; - Transparency, based on article 6a.19 of the Telecommunications Act; 3.2 Reasons for the imposition, maintenance or amendment of the obligations The obligations are imposed to prevent/counteract potential competitive problems: - excessive tariffs to the detriment of end users, in particular fixed end users; 3.3 Exceptional measures 5

6 Section 4 Compliance with International obligations 4.1 Imposition, amendment or withdrawal of obligations provided for in Article 8(5) of Directive 2002/19/EC (Access Directive) 4.2 Name(s) of the undertaking(s) concerned 4.3 International commitments entered by the Community and its Member States that need to be respected. 6

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