The expansion of fibre broadband in the Netherlands is at risk due to competitive operators duplicating networks, the ACM warned. The competition and telecom regulator's fibre market study suggests operators should cooperate more on the roll-out and local authorities can do more to stop duplicate networks.
The ACM started investigating the market earlier this spring after several cases emerged of two operators rolling out FTTP in the same area. A complaint from T-Mobile, on behalf of E-Fiber, and the industry group NLconnect suggested that incumbent KPN may be trying to frustrate efforts of newcomers on the fibre market by targeting their areas with duplicate networks.
The regulator said it was unlikely two fibre networks could be economical, given they must also compete with the existing copper and cable networks. Network duplication is happening especially in urban areas, leading to delays in projects and uncertainty for investors. The ACM warned this could slow the overall roll-out of fibre in the country.
Co-investment encouraged
To alleviate the problem, the regulator sees more room for operators to cooperate on roll-outs. The new EU telecom regulatory code encourages this type of co-investment in high-capacity networks, and the ACM said it can vet cooperation proposals to ensure they meet competition regulations. Not only does this save costs on the roll-out, operators in a co-invest scheme can also benefit from lighter access regulations. The ACM said it will evaluate any cooperation agreements at the operators' request.
The ACM also sees a bigger role for municipalities to support the 'first mover' and avoid duplicate networks. To improve the investment climate and help speed up roll-outs, the local authorities need to be more clear on their permitting procedures and the conditions for rolling out fibre, the regulator said. These criteria could be harmonised more across cities in order to ease the path of potential investors.
In addition, cities could use their permitting power to stop a second operator from starting excavation work, the ACM said. Such a decision can be justified by the public interest. The regulator plans to start talks with the economic affairs ministry and local authorities on how the Telecom Act can be used further to improve the competitive dynamics in the market.
KPN active
It is mainly KPN frustrating the efforts of smaller players, in order to protect its market share. In addition to directing its roll-out to areas where others already have coverage plans, the incumbent is active in targeting customers in fibre roll-out areas with offers on its copper and 4G networks. VodafoneZiggo also runs campaigns in areas planned for fibre coverage. The network duplication can undermine the business case of newcomers, while increased competition slows their return on the investment.
However, the regulator had not discovered any illegal practices, ACM director Henk Don said in an interview with Het Financieele Dagblad. As there is little the ACM can do to intervene in such cases, it is hoping to use the study as a way to raise awareness and encourage market players to adapt their practices, he said.
