On 13 April 2010, the Appeals Court (College van Beroep voor het Bedrijfsleven) in Rotterdam annulled the Dutch regulatory authority OPTA's decision on Market 6 (wholesale terminating segments of leased lines) of 19 December 2008.

A key characteristic of that OPTA decision was that it distinguished the market for leased lines up to 20 Mbit/s (‘low capacity') from the market for leased lines above 20 Mbit/s (‘high capacity') at the retail level and at the wholesale level (with regulation adopted only at the wholesale level).

The annulment (following appeals filed by many operators, on various grounds and defending a variety of positions) relates specifically to OPTA's market definition/market segmentation, and is remarkable, as it relies to a great extent on technical detail, and addresses questions surrounding copper and fibre as supply-side and demand-side substitutes.

In particular, the Court's judgment concludes that, in the specific context of leased lines, OPTA should have found that that neither pair-bonded copper nor VDSL2 constitute valid substitutes for fibre.

The Court's judgment was only recently published in its entirety and this now allows us to provide an analysis of the precise reasoning relied upon by the Court.

1. Supply-side: technical analysis - pair-bonding and VDSL2

First of all, the Court considers that OPTA's assessment of the development of certain technical solutions, such as pair-bonding of copper lines, was incorrect. It finds that there appear to be insufficient resources (insufficient number of copper lines serving the premises) in many areas where businesses are located. Pair-bonding is therefore considered by the Court not to be a feasible alternative to high-capacity fibre in these areas. Even if sufficient copper lines are physically present, the Court considers that OPTA has not sufficiently analysed whether they are available to be pair-bonded into high capacity (20 Mbit/s or more) leased lines.

Secondly, the Court considers that OPTA has not sufficiently assessed the length of the copper loops, and the impact thereof on the possibility to achieve high speeds by utilising pair-bonding. The Court states that, in locations where the copper loops are too long, bonded loops will not achieve performance matching a >20 Mbit/s fibre connection.

Thirdly, OPTA has, according to the Court, erroneously assessed the potential of VDSL2, and the Court adds that the asymmetrical nature of VDSL2 makes it only suitable for residential markets but not for business markets (which, according to the Court, require symmetrical connections). Distance from the MDF also plays a role, and hence the suitability of VDSL2 as a substitute for high capacity leased lines should have been more critically analysed. The fact that VDSL2 was not substantially rolled out at the time of the OPTA decision also contributes to the doubts expressed by the Court.

2. Supply-side: proportion of copper/fibre in the >20 Mbit/s segment

The Court's judgment, in the specific context of leased lines, is that OPTA's conclusion that pair-bonded copper can generate disciplinary price pressure on fibre is flawed.

OPTA had not researched the proportion of copper and fibre access used. According to the Court, such research was necessary to ascertain in reality whether copper really exercises sufficient disciplinary price pressure on high capacity fibre, and for OPTA to conclude that they can be placed in the same markets.

The Court adds that re-migration from fibre to copper is not a plausible option, as this would annul the investments already made in fibre.

3. Demand substitution

The Court finds that the data on which OPTA has based itself to research demand substitution is insufficient to come to a valid conclusion, and that OPTA has therefore incorrectly assumed that the data (provided by Dialogic in 2008 in the form of a report) was sufficient to gain insight into this matter. OPTA's conclusion with regard to demand substitutability is therefore ruled invalid by the Court.

The Court also concludes that, in stating that a price comparison of leased lines offers is impossible due to the many different packages and bundles, OPTA has not been able to put forward a solid basis for its statement that there is a price jump between 2 Mbit/s and 34 Mbit/s, which in turn would lead to an absence of demand substitution between leased lines with a capacity up to 20 Mbit/s and leased lines with a capacity above 20 Mbit/s.

The Court therefore concludes that a correct delimitation and definition of low capacity and high capacity leased lines has not been established by OPTA, and that the market analysis decision must be annulled.

OPTA is given 6 months to issue a new decision; in the meantime, the annulled decision stands.

The full text of the CBB judgment (in Dutch only) can be accessed by clicking here.

For a discussion of this case, and its possible implications for other markets, please contact This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .