Friday 2 March 2007, the Dutch regulatory authority OPTA published a new letter
addressed to market participants relating to 'All-IP' (KPN's Next Generation
Network initiative encompassing an upgrade of its core network and a fundamental
restructuring of its access network, including the use of VDSL2 from street
cabinets and FttX).
new findings following its previous letter to market participants dated 24 Jan
2007 (and the publication of a study on the economic viability of sub-loop
unbundling by alternative operators) are as follows:
received by OPTA from operators (in particular the altnet association ACT,
bbned and Reggefiber) suggests that bilateral/multilateral discussions are
underway 'in various configurations', between KPN and alternative operators as
well as among alternative operators, with a view to determining appropriate alternatives
for MDF access, and/or conditions under which MDF access could be phased out in
a manner that is acceptable to alternative operators.
- OPTA considers,
given that direct discussions are underway, that it would NOT be appropriate,
for the time being, for OPTA to issue policy rules ('beleidsregels') for the
phasing out of local loop unbundling from Main Distribution Frames (MDF access).
Such phasing out had previously been explicitly envisaged by OPTA, but was
subsequently called into question by means of OPTA's letter of 24 Jan 2007 (see
the T-REGS news item with the same date). OPTA now considers that such policy
rules should be published at the same time as the draft new market analyses,
i.e. at the end of Q2 2007.
basis of its latest findings, OPTA now 'appeals' to KPN and to alternative
operators, essentially as follows:
- KPN is
being explicitly encouraged and enjoined to take an initiative to reach a
solution for phasing out MDF access that is acceptable to all parties
concerned. Such an initiative should encompass SDF (street-cabinet) backhaul,
modalities and conditions for phasing out MDF access, and the provision of WBA
(wholesale broadband access).
- OPTA is
explicitly asking KPN to make voluntary commitments, which could be taken into
account by OPTA when formulating its draft market analyses. OPTA adds that new
draft market analyses of M11 (unbundled access) and M12 (wholesale broadband
access) are scheduled to be published by the end of Q2 2007, and that these
will NOT be delayed, i.e. KPN is given 3 months at most to come forward with
voluntary commitments that are supported by the other market participants.
indicates that KPN has responded positively to OPTA's requests in this respect
(which were put by OPTA to KPN in the week of 19 Feb 2007). KPN has committed
itself to report on progress to OPTA by mid-March 2007.
operators are explicitly invited and enjoined to participate in the process,
and to consider KPN's current or forthcoming proposals. OPTA suggests bilateral
and multilateral meetings between the industry and KPN in the context of this
process, whereby OPTA will take a monitoring role, but OPTA is open to consider
Also on 2
March 2007, OPTA published a study on the UK approach to functional
separation of BT (voluntary undertakings made by BT Plc. to Ofcom, which led, amongst others,
to the creation of OpenReach).
conclusions drawn by OPTA from the study of the UK experience are as follows:
functional separation is not foreseen in current EU and Dutch law. Neither OPTA
nor the Dutch competition authority NMa currently have direct powers to impose
such separation. T-REGS Note: OPTA does acknowledge that Art 6a.11 of
the Dutch Telecommunications Law provides a possible opening, but invoking this
article requires a prior Ministerial Decision.
After the review of EU directives, and transposition in Dutch law (in
2009-2010), a functional separation remedy may become available. OPTA states
that the proportionality of applying this remedy will then have to be assessed
in the context of market analyses.
- OPTA's 'provisional
position' (based on the market analyses it conducted in 2005) is that imposing
functional separation on KPN would, in the currently prevailing circumstances,
represent a disproportionate intervention, and could, in the context of prioritising
infrastructure competition, have undesirable effects. OPTA's board (the 'College') states explicitly that it is of the opinion that the Dutch market
situation does not call for a remedy that would assume that effective and
sustainable infrastructure competition is non-existent or not attainable.
Functional separation is considered to be an intrusive remedy of last resort,
and the conditions for its imposition are not presently considered to be
OPTA also states explicitly that it can see advantages in achieving functional
separation, and that a voluntary commitment by KPN, covering (certain aspects
of) the UK
model, would be considered significant by the College, and could be considered
in the context of market analyses.