An obligation is asymmetrical when it applies only to a certain subset of the relevant market players, those identified in the market analysis decision as SMP operators, i.e. if additional obligations are imposed in order to level out the existing communications dominance and support the entry of new market players to the market. On the wholesale markets, these obligations include:
- transparency, for the benefit of which the President may require that reference offers be made regarding interconnection and access and may order providers to disclose other data and information,
- equal treatment, for the benefit of which the President may require that equal conditions be stipulated for accessing the services,
- accounting separation, which is required in order to enable the Authority to understand the costs of the provider,
- obligations concerning access and interconnection, which serve as the basis for regulation and thus ensure access to the relevant regulated products for the eligible providers,
- obligations related to price regulation and cost accounting, in which the President may stipulate the application of rates based on cost and predefined cost calculation and pricing methods, and
- functional separation, which is an ultimate instrument to obligate a vertically integrated provider to conduct its wholesale access service activities within an independent economic unit.
Besides the wholesale markets, obligations may be imposed on the retail markets as well, in exceptional cases.
It is a feature of the asymmetrical obligations imposed by an SMP decision that some of these are enforced under separate official procedures launched upon request. These include especially the official procedures for approving a reference offer, an accounting separation report or prices devised using a variety of cost calculation and pricing methods.
Beyond the above, the President supervises and examines compliance with the provisions of SMP decisions under a general official surveillance proceeding or a market surveillance proceeding.
Cost-orientation and fees
If a lack of efficient competition may lead to the SMP operator applying unjustifiably high rates or a price squeeze, the President may, pursuant to Article 108 of the Electronic Communications Act, adopt a decision imposing certain obligations related to price regulation and cost accountingconcerning specific interconnection and access services.
The cost orientation and rate controllability obligation enables the appropriate handling of such obstacles to competition as, for example, price discrimination, excessive pricing, price squeeze etc.
The essence of the regulatory function of this obligation is that the SMP operator should use a cost-based (competitive) price level for its regulated services, with the proviso that they must provide these at rates calculated following the cost calculation methodology defined in the decision.
This regulatory instrument may entail the obligation of applying different cost calculation methods, in the course of which a variety of pricing methods may be used (e.g. FDC method, LRIC method etc.).
The law also authorizes the President to oblige the SPE service provider to establish the fee or fees applicable to the network service or to change the fees, if applicable.
The use of cost-based rates is inspected in procedures conducted by the President with the aim of approving the reference offers, in procedures for the approval of the cost-based rates, under a general official surveillance proceeding or a market surveillance proceeding.
Access and interconnection
Pursuant to Articles 106. §, 106/A. § és 107. § of the Electronic Communications Act, the President may adopt a decision imposing on an operator with significant power on some wholesale service market an obligation for access to certain network elements and services and the use of the related equipment.
Imposing such an obligation is justified especially if refusal of access, revocation of past access or stipulation of conditions with such results would prevent efficient market competition in subscriber services and would therefore lead to consequences contrary to the interests of the subscribers.
The access and interconnection obligation and the transparency obligation are both closely connected to the stipulating of the obligation for preparing and publishing a properly structured and sufficiently detailed reference offer.
The reference offer is an offer detailing the network services offered as well as their legal, technical and financial conditions, which the President orders the SMP operator to publish.
Reference offer approval proceedings are also launched on the SMP operator’s request; nevertheless, the SMP operator must request the official proceeding within the required deadline and in the required form.
A proceeding for the approval of a reference offer is special in the sense that the President must consult with the stakeholders regarding the draft decision for the approval of the reference offer and the President may also define in the presidential decision the content of the reference offer if the submitted draft reference offer is incomplete or otherwise fails to comply with the rules on electronic communications.
Procedures for the modification of a previously approved reference offer may be launched on the SMP operator’s request or ex officio.