In Oct 2004, KPN, the fixed incumbent operator in The Netherlands, filed an application with the regulatory authority OPTA to request the regulator's approval of a "migration fee" for converting end-user access lines from shared access to full unbundling.

KPN's request included the application of a wholesale "migration fee" to be paid by the competing provider offering the broadband access connection to the end-user, in circumstances where the end-user cancels the PSTN/ISDN (voice segment) subscription of its ADSL line but wishes to maintain ADSL connectivity.

OPTA has now published a decision in which it concludes that, if an end-user decides to cancel the (retail) subscription for the voice segment of the access line (PSTN/ISDN), there is in fact no (wholesale) service being provided to the competing provider offering the broadband access connection.

OPTA is also of the opinion that there is no material need for KPN to physically disconnect/remove the line when an end-user cancels the PSTN/ISDN subscription. KPN will therefore not be allowed to charge the proposed (wholesale) "migration fee". KPN will however be allowed to charge the end-user a (retail) "cancellation fee" (recuperation via the retail market instead of the proposed scenario in which the costs would be recuperated via the wholesale market).

The OPTA decision (in Dutch only) can be by accessed by clicking here.

There is an interesting parallel with Sweden in this matter. On 24 Feb 2005, the Swedish regulatory authority Post & Telestyrelsen decided almost identically in a similar case.

In Sweden, the alternative operator Bredbandsbolaget raised an issue with the regulatory authority PTS: whenever an end-user would request to terminate its TeliaSonera voice subscription to its (shared access) line, TeliaSonera technicians would in 1 to 9% of cases terminate the entire line (including the upper portion of the spectrum) and not only the lower part of the spectrum (used for traditional telephony), thereby leaving Bredbandsbolaget's customers without access to the network.

In the Netherlands, KPN had requested OPTA to approve the wholesale charge for a "migration product". In Sweden, however, the situation was the opposite: Bredbandsbolaget requested the creation of a "migration product" by TeliaSonera which did not (and still does not) exist, in order to be able to migrate from shared access to full unbundling so as to solve the problem of erroneously cut lines.

The Swedish regulatory authority PTS launched an investigation into the reasons for TeliaSonera to remove the disused telephone connection at all. PTS found no particular reason. The regulatory authority then proceeded to abolish the act of disconnection and the accompanying fee. The line cards are now left as they are, until TeliaSonera needs the line card to connect a new custormer. TeliaSonera will then have to free the line card, but as TeliaSonera is already charging the new customer a (retail) connection fee, which is presumed to cover the cost of preparing the line card required to connect the new customer.

There is therefore still no migration product in Sweden, but the regulatory authority believes that its "solution" is satisfactory in that:

1. Bredbandsbolaget should not have erroneously disconnected customers anymore

2. Bredbandsbolaget does not have to pay the disconnection fee anymore

3. The end-user does not lose its xDSL service upon cancellation of the PSTN/ISDN subscription

4. The costs of TeliaSonera are assumed to be covered (by the retail connection fee for new PSTN/ISDN subscriptions)

The Post & Telestyrelsen’s decision can be accessed (in Swedish only) by clicking here.

In the Netherlands, the result of the exercise is similar to what has been decided in Sweden: there can be no wholesale (migration or disconnection) charge to the provider of the ADSL access for the act of termination of the PSTN/ISDN subscription. However the way in which the incumbent operators' costs can be recuperated are different.

If you wish to discuss this matter further, please contact Alexa Veller.