On 15 Feb 2007, the Swedish regulatory authority PTS issued a 164-page document (available only in Swedish) containing extensive proposals for a new national broadband strategy. 

The stated aim of PTS is to achieve an increase in the accessibility of broadband infrastructure with the short-term objective of broadband for all households (permanent housing), businesses and public entities no later than 2010 and to promote and protect sustainable retail market competition for broadband services. Broadband is defined in the context of this 2010 target as connections that can be upgraded to a downstream transmission speed of at least 2 Mbit/s. 

Several simultaneous 'policy trajectories' are put forward by PTS to achieve the stated 2010 goals. The first trajectory involves financial and regulatory requirements for government funded infrastructures; the second trajectory addresses regulation of the fixed incumbent operator TeliaSonera's network infrastructure and wholesale activities (including proposals for functional as well as legal separation). The third trajectory focuses on openness and neutrality of (often government-owned or funded) fibre infrastructures. 

T-REGS Note: Sweden is the EU Member State in which widespread local access fibre infrastructure was developed first, often funded and operated by local municipalities or regional governments. Many of these infrastructure projects were started in the early 1990s, and were not notified to the European Commission under State Aid rules. This stands in marked contrast to the situation in many other Member States (recently especially Austria, France, Ireland, The Netherlands, and the UK), where municipal and regional public funding of fibre access projects has come under scrutiny of the European Commission in application of State Aid rules (Article 87 of the EC Treaty). 

An explicit element of PTS' newly proposed policy is to take steps to encourage or ensure that municipal authorities that currently own and operate broadband networks in areas where the commercial roll-out of so-called "future-proof broadband infrastructure" has been carried out, or is possible, should consider disposing of such operations, or alternatively, should take special measures to ensure that competition is not distorted. 

The three 'policy trajectories' put forward by PTS, including potentially substantial regulatory interventions, are as follows:

Update 26 Jan 2007: OPTA has now released a 57-page 'public version' of the study entitled 'The Business Case for Sub-Loop Unbundling in The Netherlands'. The full text (in English) can be accessed by clicking here.

The Dutch regulatory authority OPTA has today published a letter addressed to market participants, which constitutes a major revision of the approach that OPTA had previously set out in its Position Paper of 3 Oct 2006 (see the T-REGS news item of the same date).

OPTA is essentially abandoning (for the time being) its announced intention to publish policy rules ('beleidsregels') for the phasing out of local loop unbundling from Main Distribution Frames (MDF access).

The motivation that OPTA puts forward for this fundamental revision of the previously announced approach is that OPTA has provisionally concluded that a fully fledged alternative ('volwaardig alternatief') for MDF access cannot be guaranteed in the prevailing circumstances. Alternatives previously examined included sub-loop unbundling from street cabinets, (limited consideration of) backhaul from the street cabinet locations, and wholesale broadband access (including over VDSL2).

Specifically, OPTA states in today's letter that permitting KPN to withdraw MDF access would only be conceivable if market entry possibilities and the continuity of service provision by alternative operators would be sufficiently guaranteed. According to OPTA, the studies conducted, and input received from alternative operators, indicate that it is not sufficiently clear that a fully fledged alternative would be sufficiently guaranteed.

The College (board) of OPTA will now examine 'possible avenues for solutions', including explicitly the possibility of maintaining traditional MDF access for local loop unbundling.

T-REGS Note: Although this is not stated in the OPTA letter, adopting a solution whereby MDF access is maintained whilst KPN would roll out VDSL2 from street cabinets would certainly require the definition of precise rules on spectral interference on the metallic local access network. There are precedents for this in other EU Member States.

In the letter, OPTA announces its intent to involve market participants in its reflections. Subsequently, the College will examine whether the publication of policy rules is opportune, and if so, in what timeframe. OPTA indicates that it expects to be able to provide clarification on its stance by the end of Feb 2007.

One of the key elements that has triggered OPTA's revised position, alongside the market participants' reaction to the consultation, is the study it commissioned on the business case for alternative operators using sub-loop unbundling from street cabinets. OPTA's letter contains a short (2 pages) executive summary of this study (this is the only part of the document that is in English).

Update 23 Feb 2007: Today's Bundesgesetzblatt contains the Act amending the Telecommunications Act. Key provisions, including those relating to 'emerging markets' come into effect on 24 Feb 2007.

A separate T-REGS news item addresses today's development.

Update 15 Dec 2006: The Bundesrat has now voted the Bill. The next steps are: (a) forwarding the text to the President of the Federal Republic for signature to pass it into Law, and (b) its publication in the Bundesgesetzblatt.

Update 14 Dec 2006: The Bundesrat (Upper House of Parliament, representing the Länder) is now expected to debate the Bill on 15 Dec 2006 (item 74 on the agenda). The full text (in German) can be accessed by clicking clicking here. 

Update 30 Nov 2006: The Bill was voted today by the Bundestag (Lower House of Parliament). 

The parties that currently constitute the majority in the German Federal parliament (CDU/CSU and SPD) have agreed to make modifications to the Telecommunications Bill, a draft of which was approved by the Federal Government in May this year.

(see also the T-REGS news item of 17 May 2006 which addressed the previously adopted text).

The proposed amendments to the Telecommunications Act, which have been under intensive discussions within Germany and between the German authorities and the European Commission for well over a year, focus mainly on the regulatory approach to 'emerging markets' and on consumer issues.

It is with regard to the concept of 'emerging markets' that today's political agreement contains important modifications.

Modifications were agreed to Paragraph 9a of the Bill, which now reads as follows:

§ 9a (Regulierung neuer Märkte): 

(1) Vorbehaltlich des nachfolgenden Absatzes unterliegen neue Märkte grundsätzlich nicht der Regulierung nach Teil 2.

(2) Wenn Tatsachen die Annahme rechtfertigen, dass bei fehlender Regulierung die Entwicklung eines nachhaltigen wettbewerbsorientierten Marktes im Bereich der Telekommunikationsdienste oder -netze langfristig behindert wird, kann die Bundesnetzagentur einen neuen Markt abweichend von Absatz 1 nach den Bestimmungen der §§ 9, 10, 11 und 12 der Regulierung nach Teil 2 unterwerfen. Bei der Prüfung der Regulierungsbedürftigkeit und der Auferlegung von Maßnahmen berücksichtigt die Bundesnetzagentur insbesondere das Ziel der Förderung von effizienten Infrastrukturinvestitionen und die Unterstützung von Innovationen.

A new Paragraph (Paragraph 3, Nr. 12b) was also agreed and contains the definition of 'new markets':

§ 3 Nr. 12b - neu (Definition "neuer Markt"): "ein Markt für Dienste oder Produkte, die sich von den bislang vorhandenen Diensten oder Produkten hinsichtlich der Leistungsfähigkeit, Reichweite, Verfügbarkeit für größere Benutzerkreise (Massenmarktfähigkeit), des Preises oder der Qualität aus Sicht eines verständigen Nachfragers nicht nur unerheblich unterscheiden und diese nicht lediglich ersetzen".

The modifications have as a consequence that emerging markets are now more explicitly excluded from regulation (the new point 1 of Paragraph 9a affirms that: "in principle, new markets markets are not regulated" (economic regulation)).

IF there are facts that justify the assumption that, without regulatory intervention, (this is now stated explicitly) the development of a sustainable competition-oriented market for telecommunications services or networks would be hampered in the long-term, the Regulatory Authority can regulate according to Paragraphs 9, 10, 11 and 12 of the Telecommunications Act.

T-REGS Note: The previous draft approved by the Federal Government only contained a reference to regulation according to Paragraph 10, which pertains to market definition, whereas in the text that has now been agreed, potential regulation also refers to the market analysis (§ 11) and the consultation and consolidation procedures (§ 12) and the basic principles stipulated in Paragraph 9.

With regard to the verification as to whether a market should be regulated and concerning the regulatory remedies that can be imposed, the text makes no reference to the principle of proportionality. The only criteria are now promotion efficient infrastructure investment and the support of innovation.

The definition of 'new markets', which is new in the text adopted today, is as follows:

"A market for new services or products, which differ in a non-insignificant way with regard to their performance, reach, availability to larger user groups (capability to sell to mass market), price or quality, from the perspective of an intelligent customer and which are not a mere substitute thereof."

T-REGS Note: This new definition focuses on services (rather than on the underlying infrastructure), which addresses what was a key issue for the European Commission, but the new definition inserts new elements as well, which will be the subject of substantial debate going forward.

For a discussion of this important development, please contact This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .