OPTA gives KPN more scope for discounts: Draft decisions on telephony, broadband Internet access and leased lines
The Commission of OPTA, the Independent Post and Telecommunications Authority, has decided to grant KPN more scope to give discounts in the fixed telephony market, which is experiencing increasing competition thanks, for instance, to the emergence of Internet telephone services. In this respect alternative fixed telephone service providers are finding it possible to sell subscriptions to end users themselves. OPTA has imposed a duty on KPN to assist with this, which is expected to stimulate even more competition. The regulation of the market for international telephone calls will cease in its entirety. In addition, OPTA has determined that the broadband Internet access market is regulated properly. Some of KPN’s obligations in several leased line markets will lapse.
KPN still enjoys significant market power in virtually all fixed telephony markets. Many of the duties which KPN is still required to perform in order to facilitate the operation of market forces, will therefore remain in effect. What is new is that so-called carrier selection and preselection companies will be given the opportunity to offer their customers a comprehensive package of services. This is to say, they will be able to send out a single bill for both the relevant subscription and telephone calls. At present KPN still issues invoices for the subscriptions, while the calls are billed by the alternative providers.
Competition is expected to increase further in the fixed telephony markets in the years ahead. Consequently, it will become possible to give KPN greater freedom to offer end users discounts, flat-tariff services and bundled products. KPN will no longer be required to seek OPTA’s prior consent for any discounts which clearly may be offered, because in these cases OPTA would itself subsequently examine whether there has been a contravention of the rules. If this is the case, the sanctions will be more severe.
In order to ensure that its competitors can also offer Internet telephone services, KPN may not offer them below cost (which in itself amounts to less than current call charges). After all, Internet telephone services are competing with traditional telephony and KPN enjoys significant power in this market.
The broadband Internet access market is operating smoothly. In this respect KPN will continue to have a duty to allow its competitors access to the local loop. No new duties will be imposed, not even for access to the cable networks. There are grounds to relieve KPN from its existing obligations in several leased line markets, because they are experiencing effective competition.
These are the conclusions which OPTA presented today in its draft positions covering the markets for fixed telephony, broadband Internet access and leased lines. These draft decisions will now be the subject of extensive national consultations, as part of which anyone will be able to submit their views on them to OPTA. In addition our fellow regulators in the European Union can also present their opinion and the European Commission’s consent will be required for these decisions. OPTA anticipates that the latter will come into effect in late autumn. During the spring just past, OPTA assessed whether there was sufficient competition in a total of 19 electronic communication markets.