 01-07 November 2000 |
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Economy – same old monopolies
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|continued from previous page Interview with David Take page 2 What was Melita’s reaction to these regulations? Melita, after these regulations were published, came out and announced that they would not be providing data services. They said that their network had been nationalised, which is a fallacy. Subsequently, the liberalisation plan was released, whereby Maltacom would lose its monopoly by 2003, Melita would lose its monopoly by 2001 and Vodafone would lose its monopoly this year. In this liberalisation plan, one of the things that resulted as compensation for losing its monopoly was that Melita Cable would no longer be obliged to open up its network to ISPs, until it became dominant in the Internet market. When we saw this development in the liberalisation plan, we immediately requested a clarification from government and we were completely ignored. Government carried out some talks with the three major parties involved – Maltacom, Vodafone and Melita Cable – while ISPs were only spoken to when the law was being passed in parliament. The minister involved had always held the view that what we were saying makes sense. In my personal opinion, the minister appears to sympathise with us. It also appears, however, that Minister Galea is not the only person taking decisions and it seems that his view is not the view that is currently being implemented. In terms of these regulations, what is taking place at the moment? The situation at the moment is that government will soon publish amended regulations for Internet access, which basically state that data transport providers will only be obliged to open up their networks to ISPs if they are declared to be dominant. Maltacom has been declared to be dominant, Melita Cable has not been declared to be dominant, and to my knowledge neither has Vodafone nor Go Mobile. This basically means that ISPs, as matters currently stand, can only offer their services through Maltacom. Government claimed it needed to amend these ISP regulations because Brussels said that the ISP regulations of 1999 were not in line with EU directives and government felt that they needed to be replaced and brought in line with them What do these EU regulations lay out? EU directives speak of significant market power, which means that a company should only be obliged to open up its data facilities only if it has significant market power. Now "significant market power" in Malta has somehow become "dominant market power." So that single word has made a huge difference. Also, in the EU regulations there are clearly defined ways through which a company is declared to possess significant market power. Amongst these, we have its total turnover compared to the turnover of that whole sector. If you look at Melita Cable’s total turnover – as the EU speaks of total turnover - which amounts to some Lm10 million and if the you look at all ISPs together, banded together we still don’t match Melita’s turnover. Secondly, the enterprise’s ability to obtain financing is taken into consideration, which no one does. Especially when one considers that over the past ten years, Melita Cable has had tax benefits from government and duty exemptions, and even funding from government when we look at, for example, the TV on the Web exercise – which no one hears anything about. The ability of the enterprise to affect the market is another facet in determining the significance of market presence, according to the EU. Again, no one puts that into doubt. Whether or not the cable company has national wiring, Malta is the only country in Europe in which there is just one cable company and this company has national coverage. And yet, in Malta, the authorities are saying that this company is not dominant. If you look at the EU regulations and then apply these parameters to whether this company should be dominant, there is no doubt whatsoever, that in any country, Melita Cable would be declared dominant immediately. Here is where the whole crux of the matter revolves. We are not against a dominance clause if government feels that, in an open market, there will be other companies that come into play, maybe other cable companies. In this scenario we agree that another cable company starting out from scratch should not be saddled with open access to everyone, even to Melita Cable itself so, yes, we do agree that there should be a dominance clause. 
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