Update 26 Jan 2007: OPTA has now released a 57-page 'public version' of the study entitled 'The Business Case for Sub-Loop Unbundling in The Netherlands'. The full text (in English) can be accessed by clicking here.

The Dutch
regulatory authority OPTA has today published a letter addressed to market
participants, which constitutes a major revision of the approach that OPTA had previously
set out in its Position Paper of 3 Oct 2006 (see the T-REGS news item of the
same date

essentially abandoning (for the time being) its announced intention to publish policy
rules ('beleidsregels') for the phasing out of local loop unbundling from Main
Distribution Frames (MDF access).

The motivation that OPTA puts forward for this fundamental revision
of the previously announced approach is that OPTA has provisionally concluded
that a fully fledged alternative ('volwaardig alternatief') for MDF access
cannot be guaranteed in the prevailing circumstances. Alternatives previously
examined included sub-loop unbundling from street cabinets, (limited
consideration of) backhaul from the street cabinet locations, and wholesale
broadband access (including over VDSL2).

OPTA states in today's letter that permitting KPN to withdraw MDF access would
only be conceivable if market entry possibilities and the continuity of service
provision by alternative operators would be sufficiently guaranteed. According
to OPTA, the studies conducted, and input received from alternative operators,
indicate that it is not sufficiently clear that a fully fledged alternative
would be sufficiently guaranteed.

The College
(board) of OPTA will now examine 'possible avenues for solutions', including explicitly
the possibility of maintaining traditional MDF access for local loop

T-REGS Note: Although this is not stated in the OPTA letter,
adopting a solution whereby MDF access is maintained whilst KPN would roll out
VDSL2 from street cabinets would certainly require the definition of precise
rules on spectral interference on the metallic local access network. There are
precedents for this in other EU Member States.

In the
letter, OPTA announces its intent to involve market participants in its
reflections. Subsequently, the College will examine whether the publication of
policy rules is opportune, and if so, in what timeframe. OPTA indicates that it
expects to be able to provide clarification on its stance by the end of Feb

One of the
key elements that has triggered OPTA's revised position, alongside the market
participants' reaction to the consultation, is the study it commissioned on the
business case for alternative operators using sub-loop unbundling from street
cabinets. OPTA's letter contains a short (2 pages) executive summary of this
study (this is the only part of the document that is in English).

T-REGS Note: We consider it inappropriate to attempt to summarise
this summary, given that the entire study is not being disclosed (OPTA states
in its letter that it is examining whether the study and underlying modeling can
in the future be disclosed for discussion). However, it seems clear that the study
concludes that the threshold for economic viability for an alternative operator
using sub-loop unbundling from street cabinets is unlikely to be achieved by
any alternative operator unless it reaches an enormous market share (in a
market that is characterised by major presence of cable networks) or can
operate on the basis of sub-loop unbundling very selectively whilst having a larger
global broadband market share than Dutch alternative operators currently
control, and under the assumption of considerably increased average revenue per

Today's OPTA
letter contains further important elements, including the following:

  • Draft revised market analyses for wholesale unbundled
    access (Market 11 of the European Commission's Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation) and wholesale broadband access (Market 12 of the same Recommendation) are progressing
    and are expected to be put to national consultation in Q2 2007.

  • OPTA will publish an external study that it
    commissioned on 'migration timelines' (for the phasing out of MDF access). Market
    participants are involved in this study. T-REGS Note: In its Position
    Paper of 3 Oct 2006, OPTA had put forward its own proposed timelines (see also the previous
    T-REGS new item

  • OPTA will issue its decision on KPN's proposed reference
    offer for sub-loop unbundling in Q2 2007. Market participants are involved in
    the consideration of this offer.

  • In mid-Feb 2007, OPTA will publish a study it
    commissioned on the UK 'equivalence' model, and its possible applicability in
    The Netherlands.

  • Based on input received in the consultation phase, OPTA no longer considers it a priority to attempt to
    achieve arrangements among all market participants for co-ordinated civil
    infrastructure deployment. T-REGS Note: This stance by OPTA stands in sharp contrast
    to the proposals made by the French regulatory authority ARCEP in the context
    of FttX roll out.

The full
text of today's OPTA letter (in Dutch except for the executive summary of the
study on economic viability of sub-loop unbundling which is in English) can be
accessed by clicking here.

For a discussion of these and other regulatory developments in
The Netherlands, please contact Yves Blondeel or Alexa Veller.