The Dutch regulator ACM has confirmed regulation opening up VodafoneZiggo's network to competitors will take effect from 01 October. The final decision on wholesale fixed access, also covering access to KPN's fibre and copper networks, incorporates the earlier comments from the European Commission in August. VodafoneZiggo announced that it plans to appeal the decision.
The ACM said that KPN and VodafoneZiggo together dominate the market and could use their position to harm competition, such as through complicit price increases or changes in terms of service. As both KPN and VodafoneZiggo could act in such a way, it is only fair that both are forced to open up their networks to competition, the ACM said. This should ensure sufficient competition on the retail market, along with more choice and good prices for consumers.
Less regulation for KPN
To date, only KPN's network has been open to alternative operators. Under the new decision, the incumbent will face a slightly lighter touch regulation. For example, in areas with fibre coverage, the operator can gradually phase out copper access. KPN and ACM consider MDF unbundling as outdated and a barrier to the development of faster services over the copper network.
KPN gave a muted response, reiterating that it does not see the need for regulation on the highly competitive Dutch market. A spokesman pointed to the existing commercial agreements, noting that the company has had an open network for years already, which providers make successful, voluntary use of, with the oversight of the ACM.
Ziggo plans appeal
The wholesale access is entirely new for VodafoneZiggo. It will have to allow rivals to use its cable network to offer broadband, TV and fixed telephony services. However, the operator only has to invest in providing the access if an interested party emerges. The ACM will check whether the interested candidates are to be taken seriously.
VodafoneZiggo must offer offer access from a central location, or at least several sites across the country. Alternative operators must supply their own customer premises equipment.
In a response, VodafoneZiggo said it was disappointed that the ACM had ignored the comments from the European Commission. The company said it does not see a need for more regulation given the "very competitive" broadband market in the Netherlands, where attractive packages are offered at competitive prices. The ACM's decision is putting a well-functioning market in danger, without any legal basis, the company said. As a result, VodafoneZiggo plans to appeal the decision.
The ACM published the draft decision in February, which was then subject to a public consultation. The European Commission supported the Dutch regulator's market analysis of joint dominance, while asking for some clarification on the proposed remedies.
In addition to the main decision taking effect from October, additional regulations implementing the rules and setting tariffs are expected to follow. This may lead to changes for alternative operators such as M7, Tele2 and T-Mobile, which previously agreed commercial access deals with KPN that were later incorporated in the ACM's previous market decision. These seven-year deals are still running.
T-Mobile expects legal battle
T-Mobile gave a cautious response to the ACM's decision, questioning whether the regulation will lead to more and effective competition. The company noted that it's already difficult to negotiate with parties that don't really want to negotiate. It will also take considerable time to set the prices and conditions for access to the KPN and VodafoneZiggo networks. The process, including expected court appeals, could take years, the operator said in a statement.
T-Mobile said it did not yet have enough information to determine whether there was a feasible business case for the new forms of network access. Furthermore, the ACM decision does not provide any protection against a margin squeeze for operators using the wholesale access, despite T-Mobile and others already pointing out to the ACM their negative margins in the fixed market.
T-Mobile is in the process of acquiring Tele2 Netherlands. The company has said the merger will make it a strong number-three player in the market that can compete better with the two integrated operators offering fixed-mobile bundles.
YouCa wants cable access
The start-up YouCa has already approached Ziggo for access to its network, and the company said it hopes to reach quickly a fruitful cooperation for both parties, offering consumers more choice on the cable market. The upcoming roll-out of Docsis 3.1 on the cable network offers a good opportunity to experiment with new service provider models, it said. Prior to the ACM's decision, the company hired telecom entrepreneur Gert-Jan Raatgever to work with YouCa founder Taco Jelgersma on the commercial and operational preparations.
