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ACM: besides KPN’s fixed network, VodafoneZiggo’s must be opened up to competitors, too

Dutch telecom providers KPN and VodafoneZiggo must each grant other providers access to their networks. That is one of the conclusions drawn by the Netherlands Authority for Consumers and Markets (ACM) in its market analysis decision on Wholesale Fixed Access. This new regulatory regime will take effect on October 1, 2018.

Henk Don, Member of the Board of ACM, explains: ‘We see that these two companies jointly enjoy a dominant position on the market. As such, they could tacitly collude and use that position, for example, to raise prices for consumers or to change conditions to their advantage. As both KPN and VodafoneZiggo have these opportunities, ACM believes it is fair to grant their competitors access to both of their networks. In that way, providers without networks of their own will still be able to offer their services to consumers and businesses. And that will ensure there is sufficient competition on the retail markets, with more choice and competitive prices.’

What will change?

Previously, other providers without fixed networks of their own only had access to KPN’s network. From now on, they can also offer their broadband, television and fixed-telephony services over VodafoneZiggo’s fixed cable network. For KPN, the new rules are less strict than before. For example, in geographic areas with fiber-optic, KPN is allowed to phase out access to its copper network. ACM does attach several conditions to this phase-out to make sure that other providers that use KPN’s network are able to continue to compete.

Making sure there is sufficient competition

In its market analysis, ACM established that, on the market for fixed networks, KPN and VodafoneZiggo together have significant market power in an unregulated market. KPN and VodafoneZiggo are in similar positions on the telecom market, each having their own fixed and mobile networks. Their market power enables them to exclude alternative providers from the market, and then charge too high retail prices for end-users. ACM has decided to regulate the market in order to make sure there is sufficient competition.

Effects on consumers

Several steps in the process still need to be taken before consumers will notice anything from the regulatory regime on the cable market. First, VodafoneZiggo must draw up a reference offer, and propose tariffs for access to its network. Next, the other providers will have the opportunity to negotiate the tariffs and reference offer. If they have any concrete plans for offering services over VodafoneZiggo’s network, VodafoneZiggo must ensure that its network is capable of offering those services. VodafoneZiggo’s network is expected to be ready in the course of next year.

The procedure

The market analysis decision has been drawn up in accordance with a strict procedure. In late-February 2018, interested parties had the opportunity to submit their opinions regarding a draft version of the market analysis. A total of 18 market participants took advantage of this opportunity. ACM subsequently incorporated the opinions of market participants as well as its responses to them in the decision. As a result of these opinions, several elements in the decision have been adjusted. In late-July, ACM submitted the draft market analysis decision including the opinions of market participants to the European Commission. In late-August, apart from several comments, the Commission fully approved the decision.