OPTA’s response to incorrect report in the newspaper, Trouw

This morning the newspaper, Trouw, contained a front-page article entitled OPTA staat dure kabel-tv toe [OPTA Allows Expensive Cable TV]. The article wrongly gives the impression that the OPTA Commission has adopted a position on the level of cable tariffs and is planning to allow cross-subsidisation.

On 19 May 2005 OPTA announced that it wished to examine the prices which the cable companies (large and otherwise) charged for their standard television plans, so as to peg them at a cost-oriented level (the actual costs involved plus a small profit margin). This announcement was made in connection with the analysis of the market for the transmission of broadcasting signals. As required by law, this decision was the subject of extensive consultations involving all of the stakeholders in the Netherlands. OPTA accepted some of the objections which were submitted, and incorporated them in its decision. The next step in the process of finalising a ruling is to request the approval of the European Commission. If the latter consents to a decision, OPTA will finalise it. This provides the legal basis to investigate the actual costs incurred by the cable companies. During this investigation the cable tariffs are ‘frozen’ and may only be increased at a tariff identical to that of inflation. Once the expenditure has been established, OPTA can set the tariffs.

At present, OPTA does not know what the cable companies’ expenses are and it therefore does not yet know what implications they may have for the level of the standard plan tariffs. Any statement about the level of the tariffs that OPTA allows therefore does not have any basis in fact at present. Tomorrow OPTA will send its decisions to the European Commission for its approval. Depending on the European Commission grants its consent, OPTA expects to commence its investigations into the relevant costs at about the beginning of December.

OPTA does not allow any cross-subsidisation which would restrict competition. Cable companies may therefore not recover the cost of other services, such as telephony or the Internet, or of peripheral equipment such as decoders, from subscribers confined to analogue television. The digitisation of the network (or its final section) itself represents a technological advance, which is well underway, and which OPTA does not wish to discourage. Good infrastructure facilitates the development of new services and technological innovation, which is in everyone’s interest. OPTA is of the opinion that it is therefore reasonable to include the costs involved in this limited part of the digitisation process in its calculations of the relevant expenses of the cable companies. At present it is not known what effect this will actually have on the level of cable tariffs.

This morning the newspaper, Trouw, contained a front-page article entitled OPTA staat dure kabel-tv toe. The article wrongly gives the impression that the OPTA Commission has adopted a position on the level of cable tariffs and is planning to allow cross-subsidisation.