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OPTA: Less regulation for telephony market, broadcast market open

Today the Commission of OPTA, the Independent Post and Telecommunications Authority of the Netherlands, is presenting its new preliminary draft decisions for the markets for fixed telephony, broadband internet access and leased lines. In them OPTA sets out the measures, which it feels are required to promote innovation, investments and competition in consumers’ interests during the regulatory period ahead. Partly thanks to the remedies which OPTA has imposed on KPN in the telephony market to date and the fact that cable telephone services are gaining ground, it is possible to dispense with KPN’s obligations in the consumer market. From now on KPN is exempt from retail obligations, such as those governing minimum and maximum tariffs, and it is allowed to compete freely. However, OPTA has had to impose stricter obligations on KPN in the wholesale telephone market in order to achieve this relaxation. In addition, OPTA has imposed a duty on cable service providers to resell cable connections, otherwise the regulatory authority foresees insufficient competition in the broadcasting markets. In this way consumers will be able to choose from whom they wish to obtain their analogue television bundle in the same way that they are already able to choose between various telephone service providers using KPN’s network.

Benefits for business users
OPTA notes that there is not enough dynamics in the business segment. Further intervention is required to ensure that business users benefit as much from competition as private consumers. In view of the fact that business customers have too few alternatives to choose from, KPN’s current duty to sell telephone subscriptions to other telephone service providers has been extended, so as to ensure that alternative parties are able to offer a competing range of services not only to consumers but also to business customers.

Access to cable networks
While KPN’s dominance in its home market of telephony has been partly eroded, the cable companies remain dominant in the broadcasting market. Casema, @Home and Multikabel have merged to establish the cable company, Ziggo. Digitenne, IP TV and satellite do not appear to bring enough pressure to bear on cable tariffs and have failed to produce a greater choice of analogue cable subscriptions. The cable companies’ temporary tariff freeze is not a sustainable solution which will produce greater competition. It is for this reason that OPTA has imposed a resale of the cable subscription, so as to ensure that alternative providers are able to compete on the cable network. This will give consumers a choice of providers from whom they can buy an analogue cable bundle.

Access to KPN’s network
At present KPN’s competitors have access to its network through the local exchange. Thanks to this access the Netherlands is leading the way in broadband Internet access (price and bandwith). As a result of KPN’s plans (ALL-IP) to switch to fiber optic cable and VDSL, a rather advanced innovation which OPTA applauds, these local exchanges will be abolished. KPN’s competitors will need to be provided with alternative access. This access be exist either more up in the copper network through regulated wholesale broadband access, or on the fiber network in the optic exchanges. The tariffs for both forms of access include a reasonable return on KPN’s investments. This will have the effect of encouraging efficient investment and innovation in networks on the part of both KPN and other parties.

Sustainable competition
Thanks to convergence different networks can provide the same services. OPTA expects fiercer competition in relation to bundled products. In a bundle, consumers opt for a single provider of Internet, telephony and television services. In order to ensure that we are not left with only two dominant netw