EU blocks Polish regulation of web exchange services

Mar 5, 2010, 12:46 GMT

Brussels - The European Union's executive in an unusual move Friday vetoed Polish plans to regulate internet traffic exchange services - arguing that the plans would make it harder, not easier, for internet service providers to do business.

Internet traffic exchanges allow service providers to connect their customers to the world-wide web. It is only the sixth time in the last seven years that the European Commission has taken the extreme step of blocking a national move in this way.

'Our assessment is that regulation of these particular markets for internet traffic exchange services is not necessary to protect consumers or competition. If the market itself is able to provide for fair competition, don't disturb it with unnecessary regulations,' the EU's commissioner for digital development, Neelie Kroes, said.

Kroes' spokesman, Jonathan Todd, said that the EU's 26 other member states and their national regulators had all backed the commission's assessment that the Polish plans were unnecessary.

Poland's plans were based on an analysis of local internet systems which identified two parallel markets for traffic exchange services, in one of which the national company, Telekomunikacja Polska (TP), was the sole player, and in the other of which it was dominant.

The analysis was drawn up by national regulator UKE, which used it to justify its call for more regulation.

But the commission 'has rejected UKE's market definition, and the conclusions based on that definition. The commission believes that the market for IP traffic exchange is broader, and is open to other providers of transit services, in addition to TP,' a statement said.

'Polish consumers already benefit from competitive services without the need of an extra regulatory burden, and prices are falling,' the commission statement pointed out.

Poland now has the right to challenge the veto in the European Court.