Estudio espectroscópico Raman de un poli(3-hexiltiofeno) altamente

Summary

1. In summary our views on Ofcom‟s SMP assessment for wholesale TISBO markets are as follows with detail contained in Section 4.8:

a. We disagree with Ofcom‟s SMP findings in TISBO markets for medium bandwidth services outside the WECLA and high bandwidth services outside the WECLA:

i. Ofcom places considerable weight on market shares when assessing market power and in doing so it fails to consider the impact of alternative technologies available. The volumes of TISBO services are decreasing rapidly as customers migrate to alternatives such as broadband and Ethernet.

ii. We have concerns with Ofcom‟s counting of other CPs‟ circuit volumes: in the past, omissions have led to BT‟s market share being overstated.

iii. In the high bandwidth market, BT currently supplies 107 PPCs. We believe this is a small fraction of the total volumes in the market. In markets like this where volumes are already small and rapidly decreasing as customers move to Ethernet, shares are not a reliable indicator of market power and we disagree with Ofcom‟s finding of SMP `in this market. b. We support Ofcom‟s finding of no SMP in the following TISBO markets: medium bandwidth in

the WECLA; high bandwidth in the WECLA; and very high bandwidth markets.

Main points on our position on Ofcom’s SMP assessment of wholesale TISBO markets

2. The PPC market has seen significant decline in recent years. In the 15 months since BT provided Ofcom with S135 data the market has continued to see significant decrease in volumes. In the four graphs below we show how PPC volumes have fallen since the beginning of the financial year 2010/11 in the bandwidth groupings corresponding to Ofcom‟s proposed TISBO product markets.

Figure 1 Sub 2Mbit/s PPC volumes since Q1 2010.

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Figure 2 2Mbit/s volumes since Q1 2010

Figure 3 34/45Mbit/s volumes since Q1 2010.

Figure 4 140/150 Mbit/s volumes since Q1 2010.

3. The figures above show that PPC volumes have shown a continuous decline with volumes falling between 10% and 50% since April 2010 depending on the bandwidths. However, we note that volumes 128Kbit/s to 256Kbit/s services showed an increase in Q2 2010. This was the result of the migration of a significant number of retail private circuits to PPCs, but since then volumes have fallen 30% fall from this peak.

45 4. We support Ofcom‟s findings of no SMP in the very high bandwidth market and in the WECLA in

the medium and high bandwidth TISBO markets.

5. However we have a number of concerns with Ofcom‟s approach to SMP assessment for wholesale TISBO services and our detailed economic comments are contained in section 4.4 of this response. The remainder of this section summarises our views.

6. In general Ofcom‟s market power assessment relies too heavily on estimates of historic market shares. It gives too little weight to other economic criteria particularly countervailing buyer power which is very strong in these markets given the distribution of businesses by value and position of CPs purchasing wholesale products.

7. Given Ofcom‟s focus on market shares, section 4.5 details our concerns with Ofcom‟s

interpretation of CP data and circuit count methodology. We consider that these unreasonably exaggerate BT‟s market presence. This is particularly the case for small volume sub-national product markets such as high bandwidth services outside the WECLA where the impact of counting errors can be significant.

High Bandwidth services outside the WECLA

8. Ofcom is proposing to find SMP in this market as BT has a market share of 49%. The volumes in this market are very low – BT had 120 155Mbit/s PPCs in 2011 (and this number has reduced still further to 107). Small errors in estimating volumes can lead to significant changes in BT‟s market shares and conclusions on SMP. In its assessment of SMP Ofcom should also consider the impact of the expected migration of the majority of these services to Ethernet over the next few years.

9. With such low volumes it is essential that Ofcom has accurate circuit volumes from all CPs but Ofcom now recognises [7.128] that this was not the case during the 2007 market review. 10. In Table 57, Ofcom asserts that BT‟s market share has fallen from 57% in 2007 to 49% in 2011,

but then goes on to say that the 2007 data did not include a number of circuits from Virgin Media. Ofcom concludes that BT‟s market share has remained static without providing any evidence to support this conclusion. This market is characterised by low volumes and the impact of omitting a few circuits from other CPs will dramatically overstate BT‟s market share.

11. We have serious concerns that Ofcom is not using robust processes to obtain volume information from CPs. The failure of CPs to provide full information will lead to BT‟s market shares being overstated and a potential finding of SMP which is unwarranted.

12. Ofcom acknowledges that this is a market in decline as there are alternatives such as Ethernet but it does not provide any evidence of how this has been factored into it assessment of SMP. In a market in rapid decline the speed of migration of remaining customers to other technologies and suppliers means that market shares of the remaining customers is likely to be unreliable and unstable given the low volumes.

13. From our volumes we believe that 155Mbit/s PPCs are used in a small number of circuits provided by CPs, which would suggest CPs are able to supply most of their circuits without input from BT.

46 14. In our view it is disproportionate for Ofcom to regulate such a low volume market, particularly

given the unreliability of market shares as an indicator of market power. We think the time has now come for Ofcom to deregulate high bandwidth services across the UK and not just in the WECLA.

Medium Bandwidth services outside the WECLA

15. We have similar concerns with Ofcom‟s assessment of medium bandwidth services outside the WECLA. Here Ofcom has found that BT has a market share of 74%. This is a substantial increase from Ofcom‟s finding of 45% market share in 2007. Assuming the 74% market share is accurate it would be reasonable to find SMP. However as with the high bandwidth market, volumes are rapidly declining in this market as customers migrate to alternatives and market shares are not a reliable indicator of market power under these circumstances.

Very High Bandwidth

16. We agree with Ofcom‟s assessment of no SMP and consider this should extend to all very high bandwidths not limited to 622Mbit/s. We also believe that the finding of no SMP at Very High Bandwidth should extend to Trunk services by changing the definition of trunk from „all bandwidths‟ to „all bandwidths below 622Mbit/s‟.

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Question 8: Do you agree with our assessment of SMP for the wholesale AISBO markets in the