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THE RESOLUTION OF THE NATIONAL COMMISSION PERFORMING STATE REGULATION IN SPHERES OF ELECTRONIC COMMUNICATIONS, THE RADIO-FREQUENCY RANGE AND PROVISION OF SERVICES OF THE MAIL SERVICE OF UKRAINE

of May 31, 2023 No. 218

About approval of the Procedure for identification, determination and the analysis of the markets of certain electronic communication services

According to Article part one 81, of part one of Article 82 and part one of article 83 of the Law of Ukraine "About electronic communications", Item of 1 part four of article 4 of the Law of Ukraine "About the National commission performing state regulation in spheres of electronic communications, radio-frequency range and provision of services of mail service", considering provisions of the Agreement on association between Ukraine, on the one hand, and the European Union, European Atomic Energy Community and their state members, from other party ratified by the Law of Ukraine of September 16, 2014 No. 1678-VII, the Directive of the European parliament and Council (EU) 2018/1972 of December 11, 2018 about introduction of the European code of electronic communications, "Recommendations of the Commission (EU) 2020/2245 of December 18, 2020 of rather corresponding markets of services in the sector of electronic communications subject to preliminary ruling according to the Directive (EU) 2018/1972 European Parliament and the Council establishing the European code of electronic communications (2020/L 439/23) ", " manuals of the commission on market research and assessment of the considerable market power according to regulatory framework of community for electronic communication networks and services (2002/C 165/03) ", " manuals on market research and estimates of the considerable market power according to regulatory framework of the European Union for electronic communication networks and services (2018/C 159/01)", the National commission performing state regulation in spheres of electronic communications of radio-frequency range and provision of services of mail service DECIDES:

1. Approve the Procedure for identification, determination and analysis of the markets of certain electronic communication services which is applied.

2. Recognize to invalid:

the decision of the National commission performing state regulation in the field of communication and informatization, of December 11, 2018 No. 640 "About approval of the Procedure for carrying out the analysis of the markets of certain telecommunication services and determinations of operators, providers of telecommunications with essential market benefit in the markets of such services", registered in the Ministry of Justice of Ukraine on January 17, 2019 at No. 54/33025;

the decision of the National commission performing state regulation in the field of communication and informatization, of July 14, 2020 No. 269 "About approval of the Procedure for determination of the markets of certain telecommunication services", registered in the Ministry of Justice of Ukraine on September 10, 2020 at No. 866/35149.

3. To submit to management of the analysis of the markets and reporting in the procedure established by the legislation this resolution on state registration to the Ministry of Justice of Ukraine.

4. This resolution becomes effective from the date of its official publication.

It is approved: Chairman of the Antimonopoly Committee of Ukraine

O. Peschanskaya

 

Approved by the Resolution of the National commission performing state regulation in spheres of electronic communications, radio-frequency range and provision of services of mail service of Ukraine of May 31, 2023 No. 218

Procedure for identification, determination and analysis of the markets of certain electronic communication services

I. General provisions

1. This Procedure establishes organization-legal bases of the procedure of identification, determination and analysis of the wholesale and/or retail market of certain electronic communication services (further - the market of certain services), determinations of suppliers of electronic communication networks and/or services (further - suppliers) with considerable market influence (further - from ZRV) in these markets.

2. This Procedure is used by the National commission performing state regulation in spheres of the electronic communications, radio-frequency range and provision of services of mail service, within powers determined by the Law of Ukraine "About electronic communications" (further - the Law) for identification, determination and the analysis of the markets of certain services which characteristics can prove introduction of regulatory obligations and determination of suppliers from ZRV.

3. In this Procedure terms are used in the values given in the Law and other regulatory legal acts in the field of electronic communications.

4. Action of this Procedure extends to all suppliers included in the register of suppliers of electronic communication networks and services.

II. Organizational bases of carrying out identification and determination of the markets of certain services

1. Identification of the markets of certain services is carried out based on the solution of NKEK on its own initiative and/or of the address of the supplier(s), public authorities.

2. The appeal of the supplier(s), public authorities to NKEK on identification of the markets of certain services shall contain:

full name of the legal entity or surname, own name, middle name (in the presence) the physical person - the entrepreneur;

code according to the Unified state register of the companies and organizations of Ukraine-for of the legal entity or registration number of accounting card of the taxpayer or series (in the presence) and passport number (for physical persons which because of the religious beliefs refused adoption of registration number of accounting card of the taxpayer and reported about it the relevant monitoring body and have mark in the passport about the right to make any payments on series (in the presence) and to passport number) - for physical persons;

contact information to which the answer can be sent to the applicant;

reasons for need of carrying out identification of the market of certain services, including what problems in the market of electronic communications can be solved;

the offered name of the market of certain services;

the description of the electronic communication services offered for carrying out identification of certain services;

reasons for the offered commodity borders of the market, namely belonging to the corresponding group of interchangeable services which is created taking into account the available relevant services and interchangeability from the demand and supply;

data of rather geographical boundaries (scope) of the offered market of services with targeting of approximate amount of provision of the corresponding electronic communication services in certain territory or set of the territories;

the data confirming stability of existence of the offered market of certain services within at least than one year before date of the direction of the address to NKEK.

To the address other information, in case of availability which can be used in case of identification of such market of certain services can be provided.

If information in the address on completeness and content does not conform to the requirements provided in this Item, the address of consideration is not subject and not later than in ten days from the date of its receipt returns to the applicant with the corresponding explanations, on condition of specifying by the applicant of the postal or e-mail address.

3. In the solution of NKEK on the beginning of carrying out identification of the market of certain services it is noted:

the offered name of the new market of certain services, identifiable;

reasons for need of carrying out identification of the new market of certain services;

the term of carrying out consultations with participants of the market, other concerned parties, on identification of the new market of certain services.

4. Identification of the market of certain services consists of the following stages:

establishment of the main consumer characteristics of services (i);

carrying out consultations with participants of the market, other concerned parties according to the Section VIII of this Procedure;

report generation and decision making of NKEK concerning results of identification of the market of certain services.

5. Establishment of the main consumer characteristics of services (i), includes:

description and functional purpose of service;

service price;

interchangeable services (in the presence);

main properties of service;

type of networks (i).

6. NKEK makes the decision on identification of the new market of certain services and feasibility of carrying out its further determination according to the Section V of this Procedure or the solution of NKEK on lack of the bases of identification of the new market of certain services and inexpediency of carrying out such determination.

If in the decision on identification of the new market of certain services it is specified about feasibility of carrying out determination of the market, then NKEK in this decision notes:

the name of the market of certain services which is subject to determination;

term of carrying out determination of the market of certain services;

information collection forms for carrying out determination of the market of certain services;

the term and method of provision by suppliers of necessary data for carrying out determination of the market of certain services.

7. Determination of the market of certain services consists of the following stages:

data collection for carrying out determination of the market of certain services according to the Section IV of this Procedure;

determination of commodity and geographical boundaries of the market of certain services according to the Section V of this Procedure;

test of three criteria according to the Section VI of this Procedure;

carrying out consultations with participants of the market, other concerned parties according to the Section VIII of this Procedure;

report generation and decision making of NKEK concerning results of determination of the market of certain services.

8. The solution of NKEK on results of determination of the markets of certain services will be promulgated on the NKEK official website.

9. The markets of certain services do not limit determination of the markets of services in specific cases according to the legislation on protection of the economic competition.

NKEK has the right to carry out not all procedure of identification and determination of the market of certain services if the markets are determined according to Item 10 of this Section.

Reasons for such actions and the corresponding conclusions are specified in the solution of NKEK on identification and/or determination of the market of certain services.

10. NKEK approves the list of the corresponding markets taking into account international treaties of Ukraine which consent to be bound is provided by the Verkhovna Rada of Ukraine, and the corresponding recommendations of the international organizations and makes corresponding changes to it, by results of identification, determination of the markets of certain services and/or carrying out their analysis.

11. The solution of NKEK on results of determination of the markets of certain services becomes effective from the date of, its promulgation following behind day on the NKEK official website if later term of entry into force is not established by the decision, but not earlier than day of promulgation of the decision.

III. Organizational bases of market research of certain services

1. The analysis of the markets of certain services is carried out based on the solution of NKEK for the purpose of determination whether the market of certain services is falling under introduction of regulatory obligations, and also for the purpose of determination of the supplier from ZRV if it independently or together with other suppliers holds in the market position equivalent dominating (provision of economic force) that gives the chance to it to be effective considerably irrespective of competitors and end users of services, in case of establishment of availability of the bases for imposing of regulatory obligations.

2. The analysis of the markets of certain services is carried out based on the solution of NKEK on its own initiative and/or of the address of the supplier(s), public authorities or other interested persons.

3. The address according to the analysis of the markets of certain services shall contain:

full name of the legal entity or surname, own name, middle name (in the presence) the physical person - the entrepreneur, or surname, own name, middle name (in the presence) physical person;

code according to the Unified state register of the companies and organizations of Ukraine-for of the legal entity or registration number of accounting card of the taxpayer or series (in the presence) and passport number (for physical persons which because of the religious beliefs refused adoption of registration number of accounting card of the taxpayer and reported about it the relevant monitoring body and have mark in the passport about the right to make any payments on series (in the presence) and to passport number) - for physical persons;

contact information to which the answer can be sent to the applicant;

name of the market of certain services;

reasons for need of carrying out market research of certain services;

the description of problems in the market of certain services which negatively influence workable competition on it.

To the address other information, in case of availability which can be used in the analysis of such market of certain services can be provided.

If information in the address on completeness and content does not conform to the requirements provided in this Item, the address of consideration is not subject and not later than in ten days from the date of its receipt returns to the applicant with the corresponding explanations, on condition of specifying by the applicant of the postal or e-mail address.

4. NKEK carries out market research of certain services:

during the term which is not exceeding three years from the date of determination of the market of certain services if the market of certain services is analyzed for the first time;

during the term which is not exceeding five years from the date of determination of suppliers from ZRV by results of the preliminary analysis if performs repeated market research of certain services.

5. According to the reasonable address of participants of the market of certain services or on own initiative NKEK can make ahead of schedule the decision on carrying out the repeated analysis of such market of certain services, but not earlier than in one year after decision making about results of earlier carried out analysis of the corresponding market of certain services.

6. In the solution of NKEK on carrying out market research of certain services it is noted:

the name of the market of certain services which is analyzed;

term of carrying out market research of certain services;

information collection forms for carrying out market research of certain services;

the term and method of provision by suppliers of necessary data for carrying out market research of certain services.

7. Organizational bases of the analysis of the markets of certain services consist of the following stages:

data collection for carrying out market research of certain services according to the Section IV of this Procedure;

determination (verification) of commodity and geographical boundaries of the market of certain services according to the Section V of this Procedure;

test of three criteria, that is check of whether the market of certain services is falling under introduction of regulatory obligations which is carried out according to the Section VI of this Procedure;

determination of suppliers who individually or jointly have ZRV in the market of certain services according to the Section VII of this Procedure if the market of certain services falls under introduction of regulatory obligations;

assessment of market situation and effects in the future according to the Section ІХ this Procedure if the market of certain services is determined as not falling under introduction of regulatory obligations;

carrying out consultations with participants of the market, other concerned parties according to the Section VIII of this Procedure;

report generation and decision making on analysis results of the market of certain services.

8. Whether the analysis of the wholesale market of certain services begins with evaluating the retail market of certain electronic communication services connected with the corresponding wholesale market, way of test of three criteria and checks is the connected retail market (markets) is perspective competitive in the absence of regulation at the wholesale level.

The sequence of the analysis of the wholesale market of certain services on accomplishment of three criteria includes:

execution check at the same time three criteria in the corresponding retail market of certain services;

check of accomplishment of three criteria in the corresponding wholesale market of certain services on condition of accomplishment of three criteria in the retail market;

if in the corresponding wholesale market of certain services three criteria are carried out at the same time, then the further analysis proceeds according to the Section VII of this Procedure for the purpose of determination of suppliers who individually or jointly have ZRV in the wholesale market of certain services;

if in the corresponding retail market three criteria are not carried out in total, that is the market of wholesale certain services does not fall under introduction of regulatory obligations, then further carrying out the analysis in the wholesale market of certain services is inexpedient.

9. The report on analysis results of the market of certain services also shall contain:

conclusions about verification of commodity and geographical boundaries of the market of certain services;

test results of three criteria;

whether conclusions the market of a certain analyzed services falls under introduction of regulatory obligations;

the revealed problems, in case of availability, considerable market influence in the corresponding market of certain services and negative impact of the revealed problem on market functioning. Among such problems can be present: high prices, low quality, anti-competitive and discrimination actions, cross subsidizing, refusal in access and t. д;

conclusions about possible effects in such market of certain services if the market of certain services is determined as not falling under introduction of regulatory obligations.

10. In the solution of NKEK On approval of the report on analysis results of the market of certain services are specified:

the name of the market of certain services on which the analysis was carried out;

report on analysis results of the market of certain services;

date of entry into force of this decision.

11. The solution of NKEK On approval of the report on analysis results of the market of certain services will be promulgated on the NKEK official website (except those parts of decisions which contain information with limited access).

12. Suppliers have the right to appeal the solution of NKEK On approval of the report on analysis results of the market of certain services judicially.

13. In the analysis of the markets of certain services NKEK considers both own methodologies, and commonly accepted by Body of the European regulators of electronic communications (BEREC), group of the European regulators of electronic communication networks and services (ERG) about what it shall be specified in the report on analysis results of the market of certain services on condition of their application.

14. NKEK has the right to carry out not all procedure of market research of certain services in such cases:

not carry out determination (verification) of commodity and geographical boundaries of the market of certain services if determination and market research of certain services it was carried out in time, not exceeding three years from the date of decision making about results of determination of the markets of certain services or about results of earlier carried out analysis of the corresponding market of certain services;

not carry out the test of three criteria if determination and market research of certain services it was carried out in time, not exceeding three years from the date of decision making about results of determination of the markets of certain services or about results of earlier carried out analysis of the corresponding market of certain services;

other cases if NKEK reasonably considers that other stages of the procedure of market research of certain services are inexpedient, and the relevant decision is made.

Reasons for such actions and the corresponding conclusions are specified in the solution of NKEK on carrying out market research of certain services and/or in the solution of NKEK on analysis results of the market of certain services.

15. Carrying out market research of certain services is performed by NKEK and (in case of need) in cooperation and with carrying out consultations with the Antimonopoly Committee of Ukraine within its powers determined by the legislation.

16. In case of identification of signs of violation of the law about protection of the economic competition when carrying out market research of certain services, NKEK addresses to the Antimonopoly Committee of Ukraine with representation for adoption of the relevant decision.

IV. Data collection for carrying out identification, determination and market research of certain services

1. NKEK identifies, determines and analyzes the markets of certain services on the basis of information which it possesses, and information provided by suppliers, the public data, first of all, statistical information this at the disposal of NKEK about the previous actions of suppliers.

2. For identification, determination and market research of certain services NKEK uses the following data:

the regulatory reporting of suppliers submitted in the procedure established by the legislation to NKEK;

information of suppliers obtained in the procedure established by the legislation at the request of NKEK;

information from addresses of users of electronic communication services to NKEK, and also answers to the questionnaires developed for the purpose of studying of market situation of services;

data of the State statistical observation;

the data obtained when holding actions of the state supervision (control) of compliance with law about electronic communications;

analysis results of the markets of certain services for previous periods;

the data obtained by NKEK from the consulting organizations which are engaged in carrying out researches, information collection and so forth;

information on addresses of suppliers to NKEK;

data of researches of the international organizations;

other data from open sources of information.

3. Data collection forms for carrying out identification, determination and market research of certain services are placed on the NKEK electronic regulatory platform or go to suppliers together with explanations on their filling.

4. NKEK has the right at any stage of carrying out identification, determination and market research of certain services to make the additional or specifying requests and to demand provision of information (explanations, documents, etc.) from suppliers.

5. Suppliers, providing information for identification, determination and market research of certain services, shall give and specify the up-to-date, reliable, complete, exact data including containing financial and economic indicators of activities in the field of electronic communications.

V. Determination of commodity and geographical boundaries of the market of certain services

1. Determination of the market of certain services is performed for the purpose of establishment of need for preliminary ruling in this market of certain services, irrespective of the markets determined according to the legislation on protection of the economic competition.

2. NKEK determines the markets which characteristics can prove introduction of regulatory obligations (ex-ante), in particular taking into account competition levels on access to physical infrastructure of electronic communications, according to the principles of the legislation on protection of the economic competition, and also geographical reviews of expansion of the networks performed according to article 21 of the Law.

3. Commodity borders of the market (the list of the services provided in the market) are determined by forming of group of interchangeable services within which the user of service in case of usual conditions can easily pass from use of one service to use another.

4. Forming of interchangeable services (groups of services) is performed on the following signs:

similarities of functional purpose, consumer properties, use conditions, etc.;

similarities of physical, technical, operational properties and characteristics, qualitative indexes, etc.;

availability of general customer groups and/or users of services (group of services);

lack of essential difference in the prices;

to offer capability of suppliers new services on replacement existing, including taking into account use of different technologies.

In case of determination of similarity of functional purpose of services the capability of services is analyzed to perform the same functions, and also to satisfy needs of the user of service.

5. Commodity borders of the market are determined on the basis of three criteria:

interchangeability from demand;

interchangeability from the offer;

chain substitutability.

The criterion of interchangeability from demand characterizes interchangeable services considering their appointment, physical and functional characteristics and the prices, and allows to determine services to which users of services in case of insignificant easily could pass, but long (at least one year) increase in prices (5-10%) for this service, assuming that the prices of other services remain constants.

The criterion of interchangeability from the offer characterizes interchangeable services considering their appointment, physical and functional characteristics and the prices, and allows to determine degree of sufficient or proper level of readiness of suppliers who do not provide the corresponding services now, to begin their provision without implementation of considerable costs and risks in case of hypothetical insignificant, but long price increase (5-10%), assuming that the prices of other services remain constants.

Commodity borders of the corresponding market can be expanded due to chain substitutability of services which, though are not subject to direct replacement, shall be included in determination of the market because of chain interchangeability.

Chain interchangeability takes place when it is possible to show that at least two services and are not directly replaced, but there is the third service which is substitute for both services therefore these services can be in the same goods market.

6. The market of certain services includes all services which are interchangeable by results of use of criteria of demand, the offer and chain substitutability.

7. If provision of electronic communication services requires essential upgrade of network, considerable additional investments or long term (at least one year) for service implementation that demonstrates the potential competition, the service does not join in the market of a certain analyzed services.

8. On the corresponding reasons commodity borders of the market of certain services extend for the purpose of accounting of relevant (similar) services, in particular which geographical features of the territories and which, though are not directly interchangeable can affect, but shall be included in determination of the market of certain services:

technological convergence which allows suppliers to offer similar services due to convergence in technical provision of services which can influence reduction of potential costs in the time to market in particular is estimated possibility of such services on perspective basis in parts or in full to replace traditional services of electronic communications;

asymmetric interchangeability if the service A can be interchangeable service B even if the service B cannot be interchangeable service A that implies the broad definition of the market covering both services. It is urgent if technological developments lead to service innovations when the new service includes all functions previous, but acquires additional functions or characteristics;

the adjacent markets which are characterized by direct interdependence and are tangents, that is several wholesale markets can provide wholesale output resources for the corresponding retail market, and, on the contrary, one wholesale market can provide wholesale output resources for the different retail markets;

other factors and patterns which were revealed in case of determination of commodity borders of the market of certain services and which versatily characterize this market.

9. Geographical boundaries of the market are determined by establishment of the territory within which suppliers of networks have opportunity to provide services and outside which, from the point of view of users acquisition of services (interchangeable services) is impossible or inexpedient.

10. Geographical unit with which determination of geographical boundaries of the market of certain services begins is established taking into account the following characteristics:

the size of geographical unit shall be optimum to avoid the resource-intensive and burdensome microanalysis which can lead to market fragmentation;

geographical unit reflects structure or topology (physical infrastructure) of network of all corresponding suppliers;

geographical unit has the accurate and stable territory taking into account temporary borders of research of the market.

11. Geographical boundaries of the market include the territory of the state, the territory of the Autonomous Republic of Crimea, areas, cities of Kiev and Sevastopol, areas or part of their territory within which in case of usual conditions the user can meet the demand for certain service or the territory of implementation of activities by the supplier.

12. Geographical boundaries of the market of certain services are determined on the basis of the following criteria:

territorial (the territory is covered by network);

legal (existence of the geographical boundaries established by the legislation);

regulatory (availability of the relevant allowing documents, access to network and mutually connection);

price (similar level of prices for similar services within certain territory).

13. In case of determination of commodity and geographical boundaries of the market of certain services it is necessary to consider:

level of the infrastructure competition in the corresponding geographical territories;

whether competition conditions are rather homogeneous in the corresponding geographical territories and which can be distinguished from the next territories.

The specified conditions of the competition are characterized based on the available information on amounts of provision of certain services in the different territories, availability of significant differences in the prices of these services and their quality, regional distinctions in system of distribution of services and other specific distinctions between the different territories.

If conditions of the competition change (including potential restrictions of the competition), the corresponding markets of certain services can be geographically divided being guided by the criteria determined in Item 12 of this Section.

14. Temporary borders of research of the market of certain services cover time from the end of carrying out preliminary market research, on condition of its availability and to constitute at least one year preceding date of determination of the markets of certain services.

VI. Test of three criteria

1. NKEK determines whether the market is falling under introduction of regulatory obligations checking the following cumulative criteria:

high and permanent structural, legal or normative barriers of access to the market;

the existing structure of the market does not promote achievement of workable competition during the certain period, considering the competitive situation depending on physical infrastructure of the electronic communications and other factors causing competition level except barriers of access to the market;

application only is not enough legislation on protection of the economic competition for the solution of the revealed problems in the market.

2. Structural (technological) barriers arise, when specifics of technology, the structure of the accompanying costs and level of demand create asymmetric conditions for the suppliers and their potential competitors acting in the market that can lead to creation of obstacles for occurrence on the market or creates disadvantageous conditions for occurrence on the market.

Administrative (regulatory) barriers follow from the legislative, normative or regulatory requirements performing direct influence on occurrence conditions on the market (restriction of number of users of radio-frequency range who use it for provision of services; limited number of licenses to use radio-frequency range and permissions to use of numbering resource; measures for control of the prices; provision of exclusive rights, etc.).

3. The tendency to workable competition assumes that the market of certain services will reach condition of workable competition in the absence of preliminary ruling during the period of carrying out market research or will make it after this period, on condition of availability of accurate proofs of positive dynamics concerning condition of such competition.

Capability of new suppliers quickly to increase the share in the market of certain services can specify that the corresponding market is more competitive and that barriers on the way of entrance can be broken in the predicted terms based on this analysis which will be specified in the report on market research of certain services.

4. If for provision of certain service it is necessary to provide availability of elements of network or infrastructure which cannot be duplicated, or the cost of duplication of which by competitors is economically inexpedient, then the competitive situation in the market of certain services is considered dependent on physical infrastructure of electronic communications.

5. If in the market of certain services the available suppliers have opportunities for considerable economy at scale and/or economy on variety of services, and/or economy at density, and also have long economic bonds with users, long-term agreements about provision of services, then the competitive situation in the market is considered dependent on such factors.

6. The third criterion is used for assessment of sufficiency of the available adjusting measures or such which can be applied according to the legislation on protection of the economic competition to elimination of the revealed steady violations in the market of certain services.

In the market of certain services introduction of regulatory obligations is recognized inexpedient in case of confirmation that the criteria specified in Item 1 of this Section are not carried out.

7. Application of the test of three criteria is performed in case of determination of the market of certain services and/or market research of certain services:

accomplishment at the same time of three criteria in the corresponding market of certain services is performed;

if three criteria are in total carried out, then the test of three criteria is considered passed;

if in the market one of three criteria is not carried out at least, then the test of three criteria is considered not passed.

VII. Determination of suppliers with considerable market influence in the market of certain services

1. In case of identification of suppliers from ZRV in the market of certain services the criteria determined by this Section are applied and the available market conditions expected or expected market changes during the next period of carrying out the analysis in the absence of preliminary ruling are considered. This analysis shall consider influence of other types of regulation applied to the related wholesale markets of certain services during the next period of carrying out the analysis.

2. Basic criterion of market influence is the market share characterizing structure of the market and relative specific weight of the different suppliers acting in the market of certain services. Market shares are considered by the corresponding market conditions, in particular, of dynamics of the market and extent of differentiation of services (service package, etc.).

3. The indicators used for determination of market share of each supplier depend on characteristics of the corresponding market of certain services.

For determination of market share indicators - the sales volume, sales volume at cost, amount of users by certain services, other indicators of amount characterizing technical and economic condition of the supplier are used.

In case of the differentiated (package) services preference is given to indicators of sales volume and respective share of the supplier in the market of certain services as they reflect relative line item and influence of each supplier better.

4. The considerable market share (50% and more) which is held by the supplier during certain time, can specify ZRV availability except for of certain circumstances, at the same time, suppliers with market share no more than 25% can specify lack of ZRV in the corresponding market of certain services.

5. If the supplier has considerable market share, but in dynamics gradually loses it, it demonstrates that the market of certain services becomes more competitive, but does not exclude identification of ZRV.

6. The more the market share and long period of time during which it is held by the supplier the are higher probability that it is important preliminary sign of ZRV of the supplier in the market of certain services.

7. Considerable fluctuations of market share can testify to lack of market influence in the market of certain services over time. Besides, capability of the new participant quickly to increase the market share can specify that the corresponding market is more competitive and that barriers to entrance can be broken in reasonable time.

8. Availability of big market share means that the corresponding supplier has potential to ZRV and is capable to hold in the market of certain services position is equivalent to dominating.

If market share no more than 50%, then for determination of the supplier(s) from ZRV are in addition considered other key structural characteristics of the market of certain services which are determined in Item 9 of this Section.

9. In case of determination of the supplier who individually has ZRV the following criteria are used:

availability dependent on the supplier in the market of certain services of barriers to entrance on this market of other suppliers;

availability of the barriers disturbing the existing suppliers to increase their share in the market;

classification of the company;

availability of infrastructure which is difficult for duplicating;

technological and commercial benefits;

absence or low level of purchasing power of the consumer;

easy or exclusive access to the markets of the capital / financial resources;

diversification of services (package services etc.);

economy at scale;

saving amount;

straight lines and indirect network effects;

vertical integration;

advanced distributor and sales network;

conclusion of long-term agreements about provision of services;

participation in contractual relations with other suppliers in the market of certain services that can lead to restrictions of access to the market;

lack of the potential competition;

other factors and patterns which were revealed in case of determination of the supplier with individual ZRV and which versatily characterize its influence in the market of certain services.

10. Considerable market influence of suppliers can follow from combination of the criteria specified in Item 9 of this Section which in total will be decisive for determination of the supplier with individual ZRV.

11. Joint considerable market influence or provision of economic force can have several suppliers who legally and are economically independent from each other, under condition if they act together on the market of certain services that allows them to expect behavior of each other. Availability of the agreement on interaction according to the legislation is not the compulsory provision for determination of joint ZRV.

12. The suppliers having general ZRV exist when, considering the actual characteristics of the market of certain services, each participant of the market of certain services, realizing common interests, finds possible, economically rational and consequently, reasonable to accept on long-term basis general policy for their market behavior with sales objective of services in the prices, above competitive, without need to sign the agreement or to resort to the approved practice and without any actual or potential competition of participants, and also without essential loss of users of the services.

13. For determination of the suppliers having general ZRV in the market of certain services the following criteria shall be carried out at the same time:

sufficient transparency - each participant of the market of certain services has opportunity rather precisely and quickly to learn about behavior of other participants in the market of certain services to control whether they accept general policy, strategy and whether support her by the actions;

reliable mechanisms of control - the situation of silent coordination shall be steady in time, that is there shall be incentive not to depart from general policy in the market of certain services during the long period. It is under such circumstances characteristic that all participants of the market of certain services follow parallel behavior and can benefit by these actions. That is each participant of the market of certain services understands that its actions directed to increase in the share in the market would provoke identical actions from others therefore he will not receive any benefit from the initiative in the long term;

lack of effective external restrictions - needs to be determined that expected reaction of present and future competitors, and also users of services will not threaten the expected results of joint policy.

14. The conclusion about suppliers who have general ZRV is based on other binding factors and will depend on economic evaluation including from assessment of structure of the market of certain services, that is two or more suppliers jointly have ZRV in the corresponding market even if between them there is no corresponding communication (structure of property, etc.), but they act on the market where there is no workable competition and there are more than one supplier which has individual ZRV in such market. Respectively such market has certain characteristics, in particular concerning concentration of the market, and also combination of certain characteristics of the market:

firm market;

is absent or insignificant demand growth;

low elasticity of demand;

uniformity of services;

similar cost structures;

similar market shares;

lack of technical innovations, obsolete technologies;

lack of additional resources for development;

high barriers of entrance on the market;

lack of the potential competition;

informal or other bonds between the interested suppliers;

absence or restriction of opportunities for price competition;

vertical integration and general refusal of servicing;

lack of purchasing power of the consumer;

other characteristics and patterns which were revealed in case of determination of suppliers with general ZRV and which open their general influence in the market of certain services.

15. If the supplier is determined as the having ZRV in the market of certain services, it can be determined also as the having ZRV in closely connected (adjacent) market of certain services if bonds between two markets allow to use market influence in the corresponding adjacent market of certain services for strengthening of market influence of such supplier.

VIII. Consultations with participants of the market, other concerned parties

1. Consultations with participants of the market, other concerned parties on identification, determination and the analysis of the markets of certain services are carried out according to article 22 of the Law.

2. By results of consultations of NKEK generalizes information on results of discussions which is drawn up by the protocol which contains list of participants of discussion, results of consideration of all comments and offers which arrived from concerned parties with reasons for their acceptance or variation.

IX. Assessment of market situation of certain services and effects in the future if such market does not fall under introduction of regulatory obligations

1. Assessment of market situation of certain services and effects is in the future carried out by NKEK on condition of failure to carry out of the test of three criteria that is if the market of certain services is determined as not falling under introduction of regulatory obligations.

2. Assessment of market situation of certain services and effects is in the future carried out taking into account such factors as:

the market development tendencies influencing probability that in the market there can be workable competition in the future;

restrictions of the competition at the wholesale and retail levels irrespective of whether the factors connected with electronic communication networks or services or with other types of services or appendices (user computer programs) which are similar for the end user and irrespective of whether such factors are part of the market of certain services are considered as the reasons of such restrictions;

other types of regulation or the measures established and affecting such market, either the adjacent market, or the retail markets of electronic communications during the certain period, including the obligation on joint arrangement and use of elements of electronic communication networks, mutually connection of networks and access established according to the Law;

the regulation applied in other markets.

3. Conclusions according to market situation of certain services and effects are in the future specified in the report on results of the carried-out analysis of the markets.

 

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