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OPTA wishes consumers to have a choice between providers on cable

OPTA, the Independent Post and Telecommunications Authority of the Netherlands, would like consumers to have greater choice when it comes to cable television. Therefore OPTA has imposed two obligations on the two largest cable companies in the Netherlands, UPC and Ziggo. Firstly alternative providers must be able to offer their own digital TV-packages via cable. Secondly, UPC and Ziggo have an obligation for administrative resale of the analogue cable connection to other parties. However, in this case these parties will need to make their own arrangements with regard to the broadcasting rights. This means that consumers will be able to switch entirely from one provider to another for an analogue cable subscription or a digital package via cable (or both). This will ensure that consumers have a choice between various packages and levels of services. Additionally, OPTA expects that the increased competition may yield substantial profits for the TV viewer due to pricing constraint.

Alternative providers
OPTA has decided in favour of these remedies based on a prospective analysis of the Dutch broadcasting market, which it has published today. Despite the rise of alternatives, such as Digitenne, IP TV and satellite, UPC and Ziggo remain as powerful as before with a combined market share of 81%. OPTA does not expect this to change sufficiently in the period ahead without its intervention. In addition, the regulator envisages that consumers will increasingly purchase services, such as those for telephony, television and the Internet, in a bundle (‘triple play’). Since OPTA expects that the bundle will become the market, it is important that alternative operators are able to offer a bundle. This way OPTA aims to prevent that in the end there will be only two providers for the consumers to choose from for their bundle. Since two is not enough to secure ongoing competition in the electronic communication markets. OPTA enables third parties to resell this service from UPC and Ziggo to the consumer to ensure they can offer television, separate or in a bundle.

Digital television
Digital television is increasingly gaining ground in the broadcasting market, because this technology offers better quality and greater potential, for example, for video-on-demand. Almost 40% of viewers watches TV digitally, but half of these viewers also still use their analogue connection. To date, the analogue cable connection has shown itself to be an indispensable aspect of the battle to secure television viewers. The resale of analogue cable connection may act as a springboard for alternative providers to offer their own enhanced packages. By offering consumers a decoder for their own digital packages alongside the analogue packages they will be able to compete fully with the range of television services provided by the cable companies. By using unbundled access to KPN’s network for telephony and internet, alternative parties are able to offer triple play packages. This acts as a stepping stone for alternative providers to compete in the electronic communication markets which are increasingly subject to digitalisation and bundling.

Two connections
In the future consumers will be able to purchase bundles through both the cable connection and KPN’s connection. To stimulate the cable companies and KPN to invest in their own networks, OPTA will not grant them the right to access each others network as yet. More concrete: in principle KPN may not provide television services via the cable companies’ network, just UPC and Ziggo are not allowed to offer telephone services using KPN’s network.

Future steps
This analysis of the broadcasting market and the relevant remedies are set out in the draft decision which OPTA has published today. Market parties, interest groups and others have until 29 September to present their views in