CCP takes action against Pesco for abusing its dominant position

ISLAMABAD: The Competition Commission of Pakistan (CCP) has taken action against Peshawar Electric Supply Company (Pesco) for abusing its dominant position and requiring it to restore right of way (ROW) to cable, internet, and telephony service providers.

The Pesco was dominant in the market for ROW through electric poles availed by different types of cable service providers in the geographic boundary of Peshawar, as it solely owned and managed the poles and there were no other substitutes.

For the same ROW being provided to all cable operators, the complainants i.e., Nayatel Pvt Ltd and Cyber Internet Services (Pvt.) Ltd, were charged an enhanced fee from Rs10/pole to Rs100/pole, compared to basic TV cable operators without any legitimate objective justifications.

The CCP held the terms discriminatory. Pesco abused its superior bargaining position and imposed further unfair trading conditions that they must provide 10-minute advertisements and free internet connection facilities to all Pesco offices.

The Pesco had annulled its pole renting policy after initiation of the show-cause proceedings, mainly on the pretext of safety grounds.

The Pesco was found to have abused its dominant position in contravention of Section 3 of the Act. Pesco’s conduct was also discriminatory as admittedly decommissioning notices related to removal of cables were only sent to the complainants.

In this context, the bench found support from the applicable telecommunication regulatory regime, which provides that the licencees can use the poles of government and privately owned electricity distribution and supply companies (Discos) for aerial installation of optical fibre cables.

Additionally, it broadly states that the fee imposed by a public authority for a public right of way shall be on a no-profit no-loss basis, should not be a means of commercial benefit and there shall be no discrimination against any licencee in terms of the fee charged.

As for the safety grounds raised by Pesco, it could not satisfy the bench in this regard. In the order it is observed that, as per the enquiry findings, the accidents or incidents had decreased from the year 2017/18 till the year 2020/21.

No further evidence was provided to substantiate these assertions. Since other Discos are already providing ROW on similar rates to fibre optic cable operators and, as such, no denial on safety grounds has been reported or witnessed, the contentions were not acceded to.

Owing to the peculiarity of the case, to ensure compliance and to encourage corrective behaviour, the commission has directed the respondent to restore access to the ROW and or provide the ROW to Nayatel and Cybernet, on fair, reasonable and non-discriminatory terms no later than twenty-one days from the date of receipt of the order.

Failing which, the respondent shall be liable to pay a fixed penalty of Rs75 million and an additional penalty of Rs0.5 million for every day after the first of such violations or the subject abuse had occurred.

The commission emphasised that access to broadband technology has significant beneficial economic and social impacts and is in line with the objectives of the government to promote digital inclusion.

The commission has also recommended that all private and government stakeholders, including the respondent, create a uniform policy for the deployment of broadband technology and ROW that may address any or all space and safety issues, including considering any shared infrastructure possibilities to fulfill the overall public policy objectives.

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