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Competition Council in Romania fines Netcity Telecom 460,000 euros

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Christian Fernsby ▼ | February 5, 2020
The Competition Council sanctioned Netcity Telecom with fine totalling 2,183,552 lei (approximately 460,000 Euro) for abuse of a dominant position.
Netcity Telecom
Business in Romania   Netcity Telecom
Netcity Telecom SRL is the concessionaire of the Netcity network having as responsibilities the design, the realization, the technical and commercial service of the underground infrastructure of Netcity of the Municipality of Bucharest, with the main purpose of hosting the electronic communications networks previously installed, mainly, on the pillars in the capital.

Topics: Romania fine Netcity Telecom

Netcity Telecom SRL holds a monopoly position, having, through the concession contract, the exclusive and unrestricted right to implement and manage the Netcity network for a period of 49 years.

"Netcity" is a support for communications networks and must be made available to all telecom operators which want to provide services in Bucharest, in an equal, transparent and nondiscriminatory manner.

The competition authority found that, during the period 2010-2019, the Netcity network concessionaire abused of its dominant position by imposing inequitable conditions regarding:

- pricing methods depending on the degree of occupancy of a functional loop (the operators paid inversely in proportion to the length of the contracted tube);

- obliging customers to contract minimum lengths of infrastructure-support,

- imposing the FTTB connections (tubing pre-equipped by Netcity Telecom with optic fibers), as long as they are optional for customers;

- limiting the option of operators to install, under clear and transparent conditions, underground transmission line for communications (they could not install other cables than optic fibers),

- longer contractual duration than the final customers wanted (5 years even if they wanted 1-2 years) and payment of the rent for a 5 years contract.

"As I said on other occasions, we do not dispute the usefulness of the project, which aims both at increasing the quality of data transmission services and improving the visual aspect of the city, but it must comply with the competition rules so that the costs incurred by operators (and transferred to consumers) not to be unfair.

A large company which holds a monopoly position must behave fairly towards its partners and create clear, transparent and reasonable procedures to access its network” said Bogdan Chiriţoiu, President of the Competition Council.

Netcity Telecom SRL has admitted its anticompetitive behaviour and benefited from 15% reduction in fine.

In the same investigation, the Competition Council found that between 11.26.2013 - 10.26.2016, the administration of the Municipality of Bucharest, through the General Mayor and the General Council of the Municipality of Bucharest, did not take the necessary steps for regulating the conditions of access to the Netcity infrastructure.

In this way by not acting, the Bucharest City Hall violated the competition rules (art. 8 of the Competition Law), favoring the continuation of the abuse of dominant position of Netcity Telecom until 2016 when the provisions regarding the physical infrastructure regime of the electronic communications networks as well as those regarding the setting of measures to reduce the cost of installing electronic communications networks (Law no. 159/2016) entered into force.

We recall that the investigation into a possible abuse of dominant position of Netcity was initiated in 2016 further to Ines Group SRL complaint and it was connected with the investigation initiated in April 2019 further to Interlan Internet Exchange SRL complaint.

Currently, Netcity Telecom is part of a group of five companies active in the field of energy infrastructure and telecommunications.

At the end of the first semester of 2019, Netcity Infrastructure included 1,520 kilometers of underground optic fiber network to which 20,300 buildings are connected.

In total, 560 kilometers of network were built by Netcity Telecom from the beginning of 2018 until the end of June 2019 to which 7,500 buildings were connected.

At present, the works continue, mainly, on the secondary streets.