Late on Friday 2 March 2007, the Dutch regulatory authority OPTA published a new letter addressed to market participants relating to 'All-IP' (KPN's Next Generation Network initiative encompassing an upgrade of its core network and a fundamental restructuring of its access network, including the use of VDSL2 from street cabinets and FttX). 

OPTA's key new findings following its previous letter to market participants dated 24 Jan 2007 (and the publication of a study on the economic viability of sub-loop unbundling by alternative operators) are as follows: 

• Input received by OPTA from operators (in particular the altnet association ACT, bbned and Reggefiber) suggests that bilateral/multilateral discussions are underway 'in various configurations', between KPN and alternative operators as well as among alternative operators, with a view to determining appropriate alternatives for MDF access, and/or conditions under which MDF access could be phased out in a manner that is acceptable to alternative operators.

• OPTA considers, given that direct discussions are underway, that it would NOT be appropriate, for the time being, for OPTA to issue policy rules ('beleidsregels') for the phasing out of local loop unbundling from Main Distribution Frames (MDF access). Such phasing out had previously been explicitly envisaged by OPTA, but was subsequently called into question by means of OPTA's letter of 24 Jan 2007 (see the T-REGS news item with the same date). OPTA now considers that such policy rules should be published at the same time as the draft new market analyses, i.e. at the end of Q2 2007. 

On the basis of its latest findings, OPTA now 'appeals' to KPN and to alternative operators, essentially as follows:

• KPN is being explicitly encouraged and enjoined to take an initiative to reach a solution for phasing out MDF access that is acceptable to all parties concerned. Such an initiative should encompass SDF (street-cabinet) backhaul, modalities and conditions for phasing out MDF access, and the provision of WBA (wholesale broadband access).
  

• OPTA is explicitly asking KPN to make voluntary commitments, which could be taken into account by OPTA when formulating its draft market analyses. OPTA adds that new draft market analyses of M11 (unbundled access) and M12 (wholesale broadband access) are scheduled to be published by the end of Q2 2007, and that these will NOT be delayed, i.e. KPN is given 3 months at most to come forward with voluntary commitments that are supported by the other market participants.
  

• OPTA indicates that KPN has responded positively to OPTA's requests in this respect (which were put by OPTA to KPN in the week of 19 Feb 2007). KPN has committed itself to report on progress to OPTA by mid-March 2007.
  

• Alternative operators are explicitly invited and enjoined to participate in the process, and to consider KPN's current or forthcoming proposals. OPTA suggests bilateral and multilateral meetings between the industry and KPN in the context of this process, whereby OPTA will take a monitoring role, but OPTA is open to consider further roles. 

Also on 2 March 2007, OPTA published a study on the UK approach to functional separation of BT (voluntary undertakings made by BT Plc. to Ofcom, which led, amongst others, to the creation of OpenReach). 

Major conclusions drawn by OPTA from the study of the UK experience are as follows: 

• Imposing functional separation is not foreseen in current EU and Dutch law. Neither OPTA nor the Dutch competition authority NMa currently have direct powers to impose such separation. T-REGS Note: OPTA does acknowledge that Art 6a.11 of the Dutch Telecommunications Law provides a possible opening, but invoking this article requires a prior Ministerial Decision.  After the review of EU directives, and transposition in Dutch law (in 2009-2010), a functional separation remedy may become available. OPTA states that the proportionality of applying this remedy will then have to be assessed in the context of market analyses.
  

• OPTA's 'provisional position' (based on the market analyses it conducted in 2005) is that imposing functional separation on KPN would, in the currently prevailing circumstances, represent a disproportionate intervention, and could, in the context of prioritising infrastructure competition, have undesirable effects. OPTA's board (the 'College') states explicitly that it is of the opinion that the Dutch market situation does not call for a remedy that would assume that effective and sustainable infrastructure competition is non-existent or not attainable. Functional separation is considered to be an intrusive remedy of last resort, and the conditions for its imposition are not presently considered to be fulfilled.

• However, OPTA also states explicitly that it can see advantages in achieving functional separation, and that a voluntary commitment by KPN, covering (certain aspects of) the UK model, would be considered significant by the College, and could be considered in the context of market analyses. 

The full text of the OPTA letter of 2 March 2007 (6 pages in Dutch only) can be accessed by clicking here.

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 .