KPN has sent the proposal to market regulator ACM for consideration. A spokesman for the regulator was not able to comment.
In addition to the proposed Ziggo-UPC merger, KPN is planning to take control of its FTTH venture Reggefiber, and the ACM has started new market analyses for the new regulatory period. If the acquisitions go ahead, the market will have two dominant players. According to KPN, this is a unique situation in Europe. For the first time, the incumbent will no longer be the dominant player, as Ziggo-UPC would be bigger.
However, the other, smaller market players still depend on the regulated access to KPN's networks for their very existence. This current asymmetry in the regulation is untenable and unacceptable, KPN said. Under its proposal, part of the regulation would disappear. This would also bring more certainty and stability to the market, with fewer legal appeals against the ACM's decision delaying implementation. KPN claims that the ACM's legal position is weak if it tries the alternative, of regulating both KPN and Ziggo. The current competitive situation between KPN and the cable operators makes it difficult to prove they have "joint dominance".
Under KPN's proposal, it would provide guaranteed access prices and terms to alternative providers for five years, until the end of 2019. This would include access to planned upgrades, such as vectoring, G.fast and PON. In exchange, the alternative providers would have to agree to a plan to shut down gradually the older unbundled copper network. Legacy services such as ISDN/PSTN would be guaranteed until at least 01 January 2018, including WLR/CPS, but KPN expects to market is already moving on its own to Voice over IP. The operator also pledged to maintain the separate market for high-quality broadband (leased lines), based on the current regulation.
KPN said its portfolio would be stable and prices would only go up by inflation, plus the price stability is longer than the usual three-year regulatory cycle. It does mean that market players will have less room for differentiation, as they will no longer have access to the passive network layer. On the other hand, the operator is offering to invest in higher broadband speeds. During the five-year period, the ACM would be expected to conduct new market analyses and works toward a situation with no ex ante regulation, only ex post enforcement under the general competition law.
