Monthly Archives: February 2004

TeliaSonera Ordered To Standardize Access Network Offer

Sweden’s telecommunications regulator said Thursday it has ordered TeliaSonera AB (TLSN), the largest Nordic incumbent, to standardize its offer on access networks.

Following accusations of discrimination raised by TeleDanmark A/S, PIN Sweden AB and TNT Elektronik AB, regulator Post-och Telestyrelsen said: “Operators who rent connections or use an access network should be offered the same class of products and contract conditions as TeliaSonera offers its subsidiaries.”

PTS also said, when possible, TeliaSonera should connect certain networks such as data communications between two addresses within an area that is covered by one telestation and should do so at a price based on TeliaSonera’s costs.

PTS said its demands are backed by Swedish electronic communication law, in accordance with the E.U.’s Local Loop UnBundling directive on access networks.

A failure by TeliaSonera to comply by March 26 could result in legal action, the PTS said.

The ambition of the unbundling is to create a new, open and competitive market that will be able to meet the communication needs expected in an information and communication based society.

Regulator Web site: htp://www.pts.se 

Rupini Bergstrom
Dow Jones Newswires; +46 8 5451 3092;
rupini.bergstrom@dowjones.com 

Dow Jones Newswires

Naktinis naršymas internete kainuoja tik 1 litą

Skatindama interneto paslaugų vartojimą AB „Lietuvos telekomas“ savo privatiems ir verslo klientams  suteikia galimybę naktimis žymiai pigiau naudotis interneto paslauga komutuojama linija („dial-up”).
Esami ir būsimi ,,Atviro tako” paslaugos vartotojai, naudosiantys internetą nuo 12 nakties iki 7 val. ryto už paslaugą mokės tik 1 litą. Fiksuotas mokestis už vieną naktį taikomas nepriklausomai nuo to, kiek kartų vartotojas jungsis prie interneto ar kiek laiko juo naudosis.
,,Lietuvos telekomo” akcija „Naktinis takas” truks iki šių metų birželio 1 dienos.
,,Atviro tako” vartotojai „Naktinį taką” gali išbandyti kompiuterio nustatymuose pakeitę prisijungimo numerį, vardą ir slaptažodį. Tai galima padaryti savarankiškai arba iš „Tako” svetainės parsisiuntus programą „Cerberis”, kuri automatiškai sukonfigūruos prisijungimą prie „Naktinio tako”. Prie interneto jungiamasi specialiu numeriu 8-801 54445. Prisijungimas prie interneto šiuo numeriu įmanomas tik naktimis.
Daugiau informacijos apie šią paslaugą galima sužinoti paskambinus nemokamais Bendrovės informacijos telefonais 117 arba 1525 bei ,,Lietuvos telekomo svetainėje” www.telecom.lt.
Rosvaldas Gorbačiovas,
Atstovas spaudai,

Alfa Denies Reports Of Preparing To Sell Megafon Stake

Financial-industrial holding Alfa Group (ALF.YY) said Tuesday that it has no intention of selling its 25.1% stake in Russia’s third-largest mobile phone operator OAO Megafon (MGF.YY) to TeliaSonera AB (TLSN), contrary to reports in the Russian media.

“We have no agreement of any kind to sell the stake,” Alfa Eco
Vice-President Igor Baranovsky said in a statement. “We have invested hundreds of millions of dollars in Megafon, plan to invest more in the company in as much as we are strategic investors in the telecoms sector, and we have long-term interests in this business.”

The newspaper Vedomosti had reported TeliaSonera Chief Executive Anders Igel as saying he wanted to increase the company’s stake in Megafon to a controlling one.

Alfa’s stake in Megafon has been the cause of a bitter legal battle, with two other strategic shareholders in Megafon, Telecominvest and IPOC International Growth Fund, which claim pre-emptive rights to it through an earlier option agreement.

The two claim Alfa’s purchase of the stake violated Megafon’s shareholder agreement, which excludes the sale of stakes to operators of rival networks. Alfa is a strategic shareholder in OAO Vimpel Communications (VIP), operator of Russia’s second-largest mobile network. Alfa has since tried to have the Megafon shareholder agreement, drafted in accordance with Swedish law, declared invalid in Russia.

TeliaSonera is also a shareholder in Telecominvest, in addition to the Megafon stake it holds directly.

Company Web sites: http://www.alfagroup.ru

http://www.megafon.ru

http://www.teliasonera.com 

Geoffrey T. Smith
Dow Jones Newswires (+7 095 974 8055;
geoffrey.smith@dowjones.com 

Dow Jones Newswires

HOW ENFORCEMENT AGAINST PRIVATE ANTI-COMPETITIVE CONDUCT HAS CONTRIBUTED TO ECONOMIC DEVELOPMENT

Unclassified CCNM/GF/COMP/WD(2004)1
Organisation de Coopération et de Développement Economiques
Organisation for Economic Co-operation and Development 09 Dec-2003
___________________________________________________________________________________________
English text only

CENTRE FOR CO-OPERATION WITH NON-MEMBERS
DIRECTORATE FOR FINANCIAL, FISCAL AND ENTERPRISE AFFAIRS
OECD Global Forum on Competition
HOW ENFORCEMENT AGAINST PRIVATE ANTI-COMPETITIVE CONDUCT
HAS CONTRIBUTED TO ECONOMIC DEVELOPMENT
CONTIBUTION FROM LITHUANIA
— Session IV —
This contribution is submitted by Lithuania under Session IV of the Global Forum on Competition to be held on
12 and 13 February 2004.
JT00155631

Document complet disponible sur OLIS dans son format d’origine
Complete document available on OLIS in its original format
Unclassified
English text only
Cancels & replaces the same document of 03 December 2003

ENFORCEMENT AGAINST PRIVATE ANTI-COMPETITIVE CONDUCT
IN THE TELECOMMUNICATIONS SECTOR IN LITHUANIA

Contribution by the Competition Council of the Republic of Lithuania for the OECD Global Forum
(February 14-15, 2004)

Privatisation and gradual liberalisation of the fixed-line telephony network

1. AB Lietuvos telekomas (public stock company Lithuanian Telecom) used to be the only company that could provide telephone calls services using public fixed-line telephony network in Lithuania. At the same time there were three providers of mobile telephone calls services. AB Lietuvos telekomas gained its monopoly position not only because of technological reasons but also because it was awarded exclusive rights by the State. On 9 June 1998, the Lithuanian Parliament passed a new Law on
Telecommunications one month before the privatisation of AB Lietuvos telekomas. During the privatisation Scandinavian telecommunication companies Telia and Sonera acquired 60 per cent of shares for 510 million USD. The Law on Telecommunications contained a provision that granted exclusive rights to provide telephone calls services using public fixed-line telephony network to AB Lietuvos telekomas until 31 December 2002. Some commentators interpreted such legislation as an obvious intent to raise more revenue by making the aforementioned company more attractive to foreign investors. The others argued that exclusive rights of a limited duration (approximately four years) was a reasonable safeguard for
a company which was supposed not only to meet universal service obligations but also had to fulfil other conditions of the privatisation agreement, mainly dealing with substantial modernization and only gradual downsizing of staff.

2. At present time the exclusive rights awarded to AB Lietuvos telekomas have expired and the net result of its privatisation seems to be positive. After privatisation the management focused at increase of productivity and modernization. At the end of this year the number of full-time employees should be
reduced by three times compared to June 1998, however such huge reduction in work-force did not create any social tension. AB Lietuvos telekomas did not break its promises to make substantial investments in order to modernize the existing network and substantially improve quality of services. In late 2002 the rate of the network digitalization reached 88%. AB Lietuvos telekomas continued to develop its ADSL based
access network, ADSL services are currently available to 85% of AB Lietuvos telekomas’ customers. Nevertheless, AB Lietuvos telekomas repeatedly attempted to behave anti-competitively during the last several years. Too often private gain of the privileged incumbent seemed to outweigh social loss. Therefore
effective enforcement of the competition law was necessary in order to achieve the goal of the genuine economic development in the telecommunication sector.

Attempt to exclude competition in the Internet service provision

3. The Law on Telecommunications envisaged a creation of the Telecommunications Regulatory Authority. However, its establishment was delayed until June 2000 and only in 2003 this agency received necessary powers to impose ex ante obligations and thereby preclude anticompetitive conduct in this important sector. Therefore at that time the only agency capable to fight with anticompetitive conduct was the Competition Council, however, it could only apply the general principles of the competition law.

4. In 2000, the Competition Council received complaints from several Internet service providers (ISPs) that AB Lietuvos telekomas started to install filters that restricted available frequency of leased analogue lines. At that time AB Lietuvos telekomas had numerous lease agreements of analogue lines with
independent operators that were using leased lines mostly for data transmission services including the Internet access services. The filters substantially reduced available bandwidth and made the lines unsuitable for high speed data transmission. AB Lietuvos telekomas argued that according to the legal acts
the primary purpose of analogue lines was the transmission of voice signals. Therefore the company did not intend to degrade the product offered for a lease but only tried to comply with the existing standard for analogue lines.

5. It is worth reminding that a local analogue line is easily converted into digital subscriber line by connecting DSL modems to its ends. Complaining ISPs used to upgrade leased analogue lines with the help of such technology. On the other hand, AB Lietuvos telekomas began to offer DSL lines by itself and had to compete with existing independent ISPs. If there was no possibility to lease a suitable analogue line, then an independent ISP had to lease the digital line from AB Lietuvos telekomas. The latter product was more expensive and an independent ISP would have been hardly able to compete with AB Lietuvos telekomas in the data transmission market. Besides that, AB Lietuvos telekomas claimed that the company intended to install filters only to the newly leased analogue lines. In such case some individual undertakings operating in the data transmission market would have been put in a position of a competitive disadvantage since no filters were installed in the leased lines of other ISPs.

6. The Competition Council concluded that AB Lietuvos telekomas abused its dominant position in the market of lease of lines used for the transmission data by trying to exclude the competition. Such behaviour would have increased prices for Internet services and could have delayed technical progress. The new entrants into the market were discriminated if compared to those already operating in the market because they had to rent much more expensive digital lines form AB Lietuvos telekomas instead of having a possibility to upgrade the leased lines themselves.

7. The Competition Council imposed a fine upon AB Lietuvos telekomas in the amount of LTL 150 000 and obligated the company not to install filters restricting frequency transmission in the leased analogue dedicated lines. AB Lietuvos telekomas appealed the decision all the way up to the highest judicial level available for review of administrative decisions, however, the decision of the Competition Council was upheld at every instance.

Attempt to exclude competition in the provision Internet telephony services

8. The same year the Competition Council began another investigation concerning AB Lietuvos telekomas. UAB Interprova (closed stock company Interprova) filed a complaint that AB Lietuvos telekomas blocked the ISDN flow and terminated provision of telephone voice services. According to the
complaint, AB Lietuvos telekomas tried to justify its actions by claiming that UAB Interprova violated the Law on Telecommunications by providing voice telephony services by using fixed public telephone network. As it was found during investigation AB Lietuvos telekomas took such actions not only against UAB Interprova but also against 30 more companies that attempted to provide phone services using the Internet. Until 31 December 2002 AB Lietuvos telekomas had exclusive right to be the sole provider of fixed public telephone services. UAB Interprova provided the Internet telephony services and AB Lietuvos telekomas interpreted the exclusive rights given by the Law on Telecommunications as covering not only voice telephone services of a guaranteed quality but also the Internet telephony. In spite of the rapid technological progress in this area, at that time there seemed to be a consensus among the experts that the Internet telephony was unable to guarantee telephone conversation in a real time.

9. The Competition Council decided that AB Lietuvos telekomas did not have exclusive rights to provide Internet telephony services and therefore it did not have a right to exclude UAB Interprova from competition by blocking its ISDN flow and telephone lines. The Council qualified actions of AB Lietuvos
telekomas as an abuse of a dominant position, obligated the company to resume the provision of services to UAB Interprova, and ordered to pay a fine of LTL 2 077 000 because of aggravating circumstances. AB Lietuvos telekomas appealed the decision all the way up to the highest judicial level available for review of administrative decisions. After extended litigation and careful review of several testimonies provided by the experts in the field of telecommunications the decision of the Competition Council was upheld.

Commission launches proceedings against TeliaSonera

The European Commission has launched formal proceedings against TeliaSonera AB, for abuse of a dominant position in relation to its tender for a broadband contract. The contract in question was for the construction and operation of a fibre-optic broadband network for the provision of high-speed Internet access and other services on behalf of HSB Malmö, a regional housing association. The Commission believes that the Swedish operator deliberately set its bid for the contract below cost so as to undercut its competitors and to strengthen its dominant position in the markets for the provision of local broadband infrastructure and high-speed Internet access.

Lovells

Business is booming with Nordic neighbors

RIGA, Latvia They’ve been raiding each other, plundering, making friends and trading for more than 1,000 years, off and on, and now the post-Soviet era has brought a new period of flourishing business ties between the Baltic countries and their neighbors in Scandinavia.

Sweden and the other Nordic countries are the dominant investors both in the region and in key sectors including telecommunications, banking, forestry, retailing, light industry and the media.

The Scandinavians’ multibillion-dollar stake in the Baltics is unlikely to grow as fast as it did in the latter half of the 1990s, when hundreds of millions of dollars were poured into modernizing national telecommunications networks, or tens of millions of dollars were invested in new sawmills.

But the next few years may see Finland’s Metsaliitto go ahead with a E600 million, or $720 million, pulp mill in Latvia, and Sweden’s TeliaSonera will likely make additional large deals to top up its holdings in the telecommunications sector.

Trade works both ways, with the beginnings of movement westward by some Baltic companies, but the main trend is investment in the Baltics by modern-day Vikings from Scandinavia, wielding cash instead of battle-axes.

In 2003, Sweden was the single largest foreign direct investor in Estonia, with 39.2 percent of cumulative foreign direct investment, and in Latvia, with 14 percent. Denmark tops the list for Lithuania, with 17.4 percent, closely followed by Sweden, with 15.5 percent.

Sweden’s TeliaSonera owns major stakes in the fixed and mobile telecommunications networks in Estonia, Latvia and Lithuania and calls the Baltic region part of its home market. It is rumored to be ready to bid more than $300 million to get the remaining state share of Latvia’s Lattelekom – once a long-running arbitration dispute with the Latvian government is settled.

A rival, Tele2, also Swedish, is TeliaSonera’s major competitor in Estonia and has been the No. 2 mobile services operator in Latvia, with fixed network services set to start this year.

In banking, Swedish Skandinaviska Enskilda Banken, or SEB, and Swedbank own major shares of the banking systems of all three Baltic countries. Swedish-Finnish Nordea is also present on a smaller scale. SEB holds three different banks, while Swedbank uses the Hansabank brand across the region.

Nordic subsidiaries are the leaders in the region’s thriving forestry and forest products sector – wood products are Latvia’s single largest export – and are substantial players in the textile and apparel industries. Snickers brand work clothes and pricey Swedish Oscar Jacobson suits are sewn in Latvia.

The Nordic presence in manufacturing is also rising. The Finnish electronics manufacturer Elcoteq employs more than 2,000 workers in Tallinn, the Estonian capital, while the Swedish-owned specialized industrial spring maker Lesjofors has moved some operations from Denmark to Liepaja in Latvia. The contract manufacturer Hansa Electronics, owned by a Latvian engineer and several Swedish investors, is building, among other things, wireless Internet equipment used by Mikrotiks, another Latvian company, to set up Internet access and telecommunications in Baghdad and the Kurdish city of Suleymaniya.

At present, 60 percent of Lithuania’s furniture exports are bought by Sweden’s IKEA, said Dalius Simenas, foreign editor of the Lithuanian business daily Verslo Zinios. The newspaper, like its Latvian and Estonian counterparts, is owned by Sweden’s Bonnier Business Press.

Hundreds of thousands of Balts watch terrestrial, satellite and cable television from Sweden’s Modern Times Group under the TV3 and Viasat brands.

Norway’s Varner Gruppen brought modern retailing to the Baltics with the first Dressman clothing stores in Latvia in the mid-1990s. The company switched to developing and operating shopping malls when it joined up with Linstow, the Norwegian property company, in the late 1990s. The Norwegian Rimi brand became synonymous with “supermarket” in Latvian usage – people still speak of shopping “at the Rimi” – although Swedish-Dutch ICA/$ Ahold now owns the brand.

Some Baltic companies are moving West. The Latvian software company Dati started a subsidiary in Sweden last spring and has begun receiving its first contracts. Estonian IT companies are also putting feelers into the Swedish market, helped by the large Estonian 魩gr頣ommunity in Sweden.

At least in Estonia, signs of a new regional identity are evolving. J?tam, an Estonian-American business consultant, says both Estonians and Finns are speaking of “Talsinki,” a metropolis linked by 20-minute helicopter hops and frequent ferry service across the 80 kilometers of the Gulf of Finland – 50 miles – that separates Tallinn and Helsinki. Estonians and Finns have the closest linguistic ties; they can understand each other and, like Swedes and Norwegians, can converse, with each party speaking his or her own language.

This closeness is not surprising. Vikings and Baltic raiders were staging incursions into each other’s territory as early as the 10th century. The city of Tallinn takes its name from Taanilinna, or “Danish castle,” for a fortification built by Danish conquerors. In the 17th century, Sweden ruled Livonia (comprising Estonia and part of Latvia) and made it “the granary of Sweden.” It is said that Latvian peasants crossed the frozen Baltic Sea on sleds to market their crops in Stockholm.

Now, with Estonia, Latvia and Lithuania about to join the European Union, there are some fears in Scandinavia that Baltic “hordes” may return as farm and factory workers, or even Web site developers, seeking to tap into Scandianvian health, welfare and unemployment benefits.

This may be why Sweden, one of the most unequivocal advocates of Baltic accession to the EU, is considering restrictions on the free migration of labor after May 1. The thousand-year path trodden between the Nordic and Baltic peoples will then end at a gate that is only partly ajar.

Juris Kaza
Dienas bizness

“Lietuvos telekomas” atmeta “Tele2″ kaltinimus, kad jis neleidžia teikti fiksuoto ryšio paslaugų

 

Trečiadienį telekomunikacijų bendrovė “Tele2″ pranešime spaudai išreiškė nepasitenkinimą “Lietuvos telekomu”, kad jis pažeidęs praėjusių metų gruodį pasirašytą derybinį protokolą su bendrove “Tele2 fiksuotas ryšys” ir neleidžia šiai pradėti teikti fiksuoto ryšio paslaugų Lietuvoje.

“Lietuvos telekomas” šiuos kaltinimus atmetė ir apibūdino tokį “Tele2″ pareiškimą kaip nekorektišką reklamos akciją.

Pasirašyta sutartis bei lydintys derybų protokolai įpareigojo “Lietuvos telekomą” sujungti bendrovių ryšio tinklus bei leisti “Tele2 fiksuotas ryšys” pradėti teikti savo fiksuoto ryšio paslaugas ne vėliau nei vasario 11 dieną. “Tele2″ skelbė nuo šios dienos vartotojams pradėsianti teikti pigesnius tarptautinius ir tarpmiestinius pokalbius bei skambučius į mobiliojo ryšio tinklus.

“Lietuvos telekomas” pažeidė galiojantį derybinį protokolą bei sutartu laiku tinklų nesujungė. “Tele2″ kreipėsi į atsakingas institucijas prašydama nedelsiant nutraukti “Lietuvos telekomo” savivalę bei susitarimų nesilaikymą. “Lietuvos telekomui” neįgyvendinus numatytų įsipareigojimų ir delsiant sujungti tinklus “Tele2 fiksuotas ryšys” kreipsis į teismą bei prašys kompensuoti patirtus nuostolius,” – sakė “Tele2″ generalinis direktorius Petras Masiulis.

“Lietuvos telekomas” nėra gavęs jokių “Tele2″ pretenzijų dėl tinklų sujungimo nei žodžiu, nei raštu. Todėl mus stebina, kad apie tokias pretenzijas viešai skelbiama visuomenei. Beje, vakar (antradienį. – ELTA) vienas iš “Tele2″ vadovų pokalbyje su “Lietuvos telekomo” atstovu kalbėjo apie baigiamą tinklų sujungimo testavimą”, – komentavo “Lietuvos telekomo” atstovas spaudai Rosvaldas Gorbačiovas.

Jis aiškino, jog “Lietuvos telekomas” vertina “Tele2″ kaip verslo partnerę. “Ši bendrovė pirks iš mūsų paslaugą ir už tai mokės. Ar būtų logiška mums atsisakyti pajamų? Šuo atveju “Tele2″ elgiasi nekorektiškai. Savo partnerio – “Lietuvos telekomo” – menkinimas – tai dalis “Tele2″ reklamos kampanijos dalis”, – sakė R. Gorbačiovas.

Pirmoji šioje rinkoje su buvusiu monopolistu “Lietuvos telekomu” pradėjo konkuruoti bendrovė “Eurocom”, pernai kovą pradėjusi teikti fiksuoto telefono ryšio paslaugas verslo klientams. Tam tikslui ji irgi naudoja “Lietuvos telekomo” tinklą.

ELTA

Sweden: TeliaSonera ordered to reduce last mile access charge

Sweden’s telecoms regulator, the

PTS, has ordered TeliaSonera to reduce the price it charges to operators for access to the last mile of its network. The regulator has warned that the one-off payment which the Swedish operator charges operators for installing their equipment in its exchanges is not cost-related and is discriminatory and thus illegal under EU telecoms rules.

Lovells.com

OECD Global Forum on Competition – HOW ENFORCEMENT AGAINST PRIVATE ANTI-COMPETITIVE CONDUCT HAS CONTRIBUTED TO ECONOMIC DEVELOPMENT

 

This contribution is submitted by Lithuania under Session IV of the Global Forum on Competition to be held on

12 and 13 February 2004.

Privatisation and gradual liberalisation of the fixed-line telephony network

1. AB Lietuvos telekomas (public stock company Lithuanian Telecom) used to be the only company that could provide telephone calls services using public fixed-line telephony network in Lithuania. At the same time there were three providers of mobile telephone calls services. AB Lietuvos telekomas gained its monopoly position not only because of technological reasons but also because it was awarded exclusive rights by the State. On 9 June 1998, the Lithuanian Parliament passed a new Law on Telecommunications one month before the privatisation of AB Lietuvos telekomas. During the privatisation Scandinavian telecommunication companies Telia and Sonera acquired 60 per cent of shares for 510 million USD. The Law on Telecommunications contained a provision that granted exclusive rights to provide telephone calls services using public fixed-line telephony network to AB Lietuvos telekomas until 31 December 2002. Some commentators interpreted such legislation as an obvious intent to raise more revenue by making the aforementioned company more attractive to foreign investors. The others argued that exclusive rights of a limited duration (approximately four years) was a reasonable safeguard for a company which was supposed not only to meet universal service obligations but also had to fulfil other conditions of the privatisation agreement, mainly dealing with substantial modernization and only gradual downsizing of staff.

2. At present time the exclusive rights awarded to AB Lietuvos telekomas have expired and the net result of its privatisation seems to be positive. After privatisation the management focused at increase of productivity and modernization. At the end of this year the number of full-time employees should be reduced by three times compared to June 1998, however such huge reduction in work-force did not create any social tension. AB Lietuvos telekomas did not break its promises to make substantial investments in order to modernize the existing network and substantially improve quality of services. In late 2002 the rate of the network digitalization reached 88%. AB Lietuvos telekomas continued to develop its ADSL based

access network, ADSL services are currently available to 85% of AB Lietuvos telekomas’ customers.

Nevertheless, AB Lietuvos telekomas repeatedly attempted to behave anti-competitively during the last several years. Too often private gain of the privileged incumbent seemed to outweigh social loss. Therefore effective enforcement of the competition law was necessary in order to achieve the goal of the genuine economic development in the telecommunication sector. Attempt to exclude competition in the Internet service provision

3. The Law on Telecommunications envisaged a creation of the Telecommunications Regulatory Authority. However, its establishment was delayed until June 2000 and only in 2003 this agency received necessary powers to impose ex ante obligations and thereby preclude anticompetitive conduct in this important sector. Therefore at that time the only agency capable to fight with anticompetitive conduct was the Competition Council, however, it could only apply the general principles of the competition law.

4. In 2000, the Competition Council received complaints from several Internet service providers (ISPs) that AB Lietuvos telekomas started to install filters that restricted available frequency of leased analogue lines. At that time AB Lietuvos telekomas had numerous lease agreements of analogue lines with independent operators that were using leased lines mostly for data transmission services including the Internet access services. The filters substantially reduced available bandwidth and made the lines unsuitable for high speed data transmission. AB Lietuvos telekomas argued that according to the legal acts the primary purpose of analogue lines was the transmission of voice signals. Therefore the company did not intend to degrade the product offered for a lease but only tried to comply with the existing standard for analogue lines.

5. It is worth reminding that a local analogue line is easily converted into digital subscriber line by connecting DSL modems to its ends. Complaining ISPs used to upgrade leased analogue lines with the help of such technology. On the other hand, AB Lietuvos telekomas began to offer DSL lines by itself and had to compete with existing independent ISPs. If there was no possibility to lease a suitable analogue line, then an independent ISP had to lease the digital line from AB Lietuvos telekomas. The latter product was more expensive and an independent ISP would have been hardly able to compete with AB Lietuvos telekomas in the data transmission market. Besides that, AB Lietuvos telekomas claimed that the company

intended to install filters only to the newly leased analogue lines. In such case some individual undertakings operating in the data transmission market would have been put in a position of a competitive disadvantage since no filters were installed in the leased lines of other ISPs.

6. The Competition Council concluded that AB Lietuvos telekomas abused its dominant position in the market of lease of lines used for the transmission data by trying to exclude the competition. Such behaviour would have increased prices for Internet services and could have delayed technical progress. The new entrants into the market were discriminated if compared to those already operating in the market because they had to rent much more expensive digital lines form AB Lietuvos telekomas instead of having a possibility to upgrade the leased lines themselves.

7. The Competition Council imposed a fine upon AB Lietuvos telekomas in the amount of LTL 150 000 and obligated the company not to install filters restricting frequency transmission in the leased analogue dedicated lines. AB Lietuvos telekomas appealed the decision all the way up to the highest judicial level available for review of administrative decisions, however, the decision of the Competition Council was upheld at every instance.

Attempt to exclude competition in the provision Internet telephony services

8. The same year the Competition Council began another investigation concerning AB Lietuvos telekomas. UAB Interprova (closed stock company Interprova) filed a complaint that AB Lietuvos telekomas blocked the ISDN flow and terminated provision of telephone voice services. According to the complaint, AB Lietuvos telekomas tried to justify its actions by claiming that UAB Interprova violated the Law on Telecommunications by providing voice telephony services by using fixed public telephone network. As it was found during investigation AB Lietuvos telekomas took such actions not only against UAB Interprova but also against 30 more companies that attempted to provide phone services using the

Internet. Until 31 December 2002 AB Lietuvos telekomas had exclusive right to be the sole provider of fixed public telephone services. UAB Interprova provided the Internet telephony services and AB Lietuvos telekomas interpreted the exclusive rights given by the Law on Telecommunications as covering not only voice telephone services of a guaranteed quality but also the Internet telephony. In spite of the rapid technological progress in this area, at that time there seemed to be a consensus among the experts that the Internet telephony was unable to guarantee telephone conversation in a real time.

9. The Competition Council decided that AB Lietuvos telekomas did not have exclusive rights to provide Internet telephony services and therefore it did not have a right to exclude UAB Interprova from competition by blocking its ISDN flow and telephone lines. The Council qualified actions of AB Lietuvos telekomas as an abuse of a dominant position, obligated the company to resume the provision of services to UAB Interprova, and ordered to pay a fine of LTL 2 077 000 because of aggravating circumstances. AB Lietuvos telekomas appealed the decision all the way up to the highest judicial level available for review of administrative decisions. After extended litigation and careful review of several testimonies provided by the experts in the field of telecommunications the decision of the Competition Council was upheld.