French example offers support for ACM for opening cable networks

Wednesday 29 October 2014 | 09:38 CET | Market Commentary
The French Competition Authority has approved the acquisition of SFR by cable operator Numericable with several conditions. The acquisition became definitive in June of this year, with SFR owner Vivendi receiving EUR 13.5 billion plus a 20 percent stake in SFR Numericable. The conditions set by the Authority include selling the copper network of Numericable’s business subsidiary Completel as well as selling the mobile operations of its subsidiary Outremer Telecom in Reunion and Mayotte. Another condition is the presence of a special envoy at SFR Numericable’s board meetings to prevent the exchange of strategic commercial information between the company and its major shareholder Vivendi. The latter condition is added because both companies compete in the French pay TV market and the French overseas telecom markets.

The most interesting condition set by the Competition Authority is enforcing Numericable to open up its cable network for broadband service from other providers including Orange, Free, Bouygues Telecom and MVNOs, who want to start offering broadband. These providers should be able to offer their own services and modems to end users on the Numericable network with SFR Numericable offering a bitstream access service. The conditions and prices for the bitstream services will have to be approved by the Competition Authority before becoming valid.

Another possible reason for enforcing Numericable to open its cable network is ensuring that SFR Numericable continues to invest in SFR’s FTTH network. This could then become more attractive to invest in FTTH instead of the cable (FTTB) network as the FTTH network has no regulatory restriction, opposed the cable network.

The French Competition Authority goes a step further than the European Commission which approved the acquisition of the largest cable operator in the Netherlands Ziggo by the parent of the second largest cable operator Liberty Global. The EC only ordered Liberty Global to sell off its premium movie channel Film 1 to prevent significant market power (SMP) of the new combination on the Dutch pay TV market. Still, opening of the French cable network could be a starter for a similar regulatory move in the Netherlands.

Dutch telecom authority ACM will present its new market analysis and regulations for operators with SMP at the end of this week that could include the possibility to enforce the new Ziggo to open its cable network for broadband services from third parties to create a more level playing field. At the same time, ACM can keep the current regulatory regime for access to KPN’s copper network and Reggefiber’s fibre network. The latter has been pressed for by providers without their own fixed network like Vodafone and Tele2 following approval of the Ziggo take-over.

If the ACM chooses this so-called symmetric regulation path, which will not be accepted without a legal fight by the new Ziggo, it has support from France.

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