The President of the Office of Competition and Consumer Protection found that TP EmiTel, subsidiary of Telekomunikacja Polska and the owner of TV and radio transmission stations, had discriminated against public broadcasters for many years

The proceedings against EmiTel was launched in late 2005 on the motion of the Union of Public Media Employers (Związek Pracodawców Mediów Publicznych). Its members - Polskie Radio, regional public radio broadcasting stations and Telewizja Polska - had accused EmiTel of varying rates for its services.

In order to reach their audience, broadcasters disseminate their programmes by means of transmission networks. Nowadays, radio and TV signal may be transmitted by means of, for example, terrestrial, digital and cable networks. The most effective way of reaching the audience is the terrestrial network - more than 50% of households in Poland receive the signal through this kind of network exclusively. TP EmiTel is the monopolist and the main provider of terrestrial network services in Poland. It owns 459 (out of 527) TV signal transmitting stations and more than a half of the 811 radio signal transmission stations.

In the course of the proceedings the President of UOKiK investigated the agreements signed by TP EmiTel with its clients. The investigation revealed that the company varied its rates, discriminating against public broadcasters and favouring the commercial ones - the differences amounted to up to 35%.

The practices of TP EmiTel were clearly of anticompetitive nature, especially due to the fact that public broadcasters have been the major and long-term recipients of the company's services. In the opinion of UOKiK, the discriminatory practices were aimed against potential new transmission networks operators, which could offer the broadcasters more favourable rates and bind them for a long time. It should be stressed that changing the terrestrial network operator by a broadcaster entails a number of technical and organisational issues, such as for instance the need to obtain new frequency reservations. Therefore, once a broadcaster starts cooperation with an operator, it is considerably less willing to switch to its competitors.

By offering preferential, although still profitable to itself, rates for new commercial broadcasters entering the market, TP EmiTel discouraged them from looking for alternative operators, thus limiting the development of competition on the market. Offering preferential rates was even easier for the company due to the fact that it renders its services to commercial broadcasters using mainly the same infrastructure (for instance, masts) as with respect to public broadcasters, which has a direct impact on the costs. However, only TP EmiTel profited from the lower fixed costs resulting from the wider base of clients, since the rates charged to public broadcasters for transmission services had been growing regularly. Only the agreements that have been signed recently (in 2007) provide for reduced rates, however, the President of UOKiK ruled that the rates were still discriminatory.

In the opinion of UOKiK, TP EmiTel decided to take over the biggest possible share of the new market segment that emerged as a result of the liberalisation of the radio and TV broadcasting sector. Offering attractive rates to the new market participants, TP EmiTel discouraged them from trying to create or use alternative terrestrial transmission networks.

The President of UOKiK fined TP EmiTel with over PLN 19 million and ordered the company to discontinue its practices. Such a high fine results from an exceptionally blameworthy nature of TP EmiTel's practices. What is more, the President of UOKiK decided that the fine be immediately enforceable. Had he not done so, and assuming that the company appeals, this negative market phenomenon would stay in place. Without the immediate enforceability order, the decision would, in fact, be ineffective: the discriminated clients might even succumb to the pressure of TP EmiTel, since the prolonging situation of lack of contractual arrangements concerning the terms of obtaining radio and TV transmission services would increase the risk associated with conducting business.

More information:
Małgorzata Cieloch, Spokesperson for UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Tel. (+48 22) 827 28 92, 55 60 106, 55 60 314
faks (+48 22) 826 11 86
E-mail [SCODE]bWNpZWxvY2hAdW9raWsuZ292LnBs[ECODE]