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ACM: extensive roll-out of fiber-optic needed for making the telecommunications network future-ready

18-10-2019

Fiber-optic connections offer consumers more freedom of choice, and they are needed in order to meet the growing demand for fast broadband access, now and in the future. The number of fiber-optic connections is climbing steadily again, however the deployment rate has suffered setbacks in some cases, especially in urban areas. These are some of the findings of the market study into the roll-out of fiber-optic, conducted by the Netherlands Authority for Consumers and Markets (ACM) and published today.

In the past 12 months, the roll-out of fiber-optic has attracted much attention in various municipalities, both in cities and towns as well as in rural areas. ACM carried out this market study in order to find out in what way this important innovation is introduced by the market. In part because of local initiatives, more and more households in rural areas now have access to fast broadband access over fiber-optic. However, bottlenecks have emerged in built-up areas (in big cities and smaller towns). In response to these identified bottlenecks, ACM has put forward several suggestions on how to ensure the market is able to function better.

Henk Don, Member of the Board of ACM, comments: ‘We have found that, in built-up areas, multiple operators often announce the deployment of fiber-optic at the same location. Such duplicate deployment of fiber-optic in addition to the existing copper and cable networks is generally not cost-effective. Within the current system, market participants may respond strategically to fiber-optic project announcements of competitors, which are consequently either delayed or scaled down.’

Such strategic moves in response to fiber-optic projects of competitors add to the uncertainty that investors in fiber infrastructure face. In turn, this may deter investors, and thus lead to fewer investments in the deployment of fiber-optic in certain areas. The result of this effect could be a situation where the opportunities that currently exist for an extensive introduction of fiber-optic across the Netherlands are not fully used.

ACM’s suggestions

In response to the identified bottlenecks, ACM has put forward several suggestions in the market study, which, within the current system, can help towards fully using the opportunities that are currently present in the fiber-optic market.

First, operators that are currently rolling out fiber-optic could explore opportunities for co-investments. ACM is prepared to assess the different opportunities within the context of competition law if so requested by the operators involved. Under the right circumstances, consumers may benefit from collaborations between market participants, for instance, if such collaborations help operators offer fiber-optic-based services sooner or in a larger area.

Second, ACM has found that much can be gained if municipalities, water boards, and provinces publish and harmonize as much as possible the requirements that they set for building fiber-optic networks. This offers clarity to all market participants that wish to deploy fiber-optic networks, prevents uncertainty among investors, and expedites the roll-out process.

Finally, ACM sees sufficient reason to start monitoring the market more closely. In that way, it can better assess whether competitive behavior between market participants causes friction.

See also

18-10-2019 Market study into the roll-out of fiber-optic in the Netherlands (in Dutch)