T-REGS - Telecoms Regulatory Expertise Europe - Netherlands: OPTA fundamentally revises its proposed position on KPN’s ‘All-IP’ Project

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).

T-REGS Note: We consider it inappropriate to attempt to summarise this summary, given that the entire study is not being disclosed (OPTA states in its letter that it is examining whether the study and underlying modeling can in the future be disclosed for discussion). However, it seems clear that the study concludes that the threshold for economic viability for an alternative operator using sub-loop unbundling from street cabinets is unlikely to be achieved by any alternative operator unless it reaches an enormous market share (in a market that is characterised by major presence of cable networks) or can operate on the basis of sub-loop unbundling very selectively whilst having a larger global broadband market share than Dutch alternative operators currently control, and under the assumption of considerably increased average revenue per user.

Today's OPTA letter contains further important elements, including the following:

Draft revised market analyses for wholesale unbundled access (Market 11 of the European Commission's Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation) and wholesale broadband access (Market 12 of the same Recommendation) are progressing and are expected to be put to national consultation in Q2 2007.

OPTA will publish an external study that it commissioned on 'migration timelines' (for the phasing out of MDF access). Market participants are involved in this study. T-REGS Note: In its Position Paper of 3 Oct 2006, OPTA had put forward its own proposed timelines (see also the previous T-REGS new item).

OPTA will issue its decision on KPN's proposed reference offer for sub-loop unbundling in Q2 2007. Market participants are involved in the consideration of this offer.

In mid-Feb 2007, OPTA will publish a study it commissioned on the UK 'equivalence' model, and its possible applicability in The Netherlands.

Based on input received in the consultation phase, OPTA no longer considers it a priority to attempt to achieve arrangements among all market participants for co-ordinated civil infrastructure deployment. T-REGS Note: This stance by OPTA stands in sharp contrast to the proposals made by the French regulatory authority ARCEP in the context of FttX roll out.

For a discussion of these and other regulatory developments in The Netherlands, please contact This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .