Belgian telecom regulator BIPT and the regional media regulators in Belgium have proposed opening up the wholesale broadband and TV market further, saying the current level of competition in the fixed market is falling short. The draft decision calls for opening up the cable networks Telenet and Voo further to include also fixed telephony and also looks at making incumbent Proximus provide wholesale access to its FTTH network.
Proximus, Telenet, Brutele and Nethys (Voo) and Coditel (SFR, since acquired by Telenet) are confirmed as dominant operators that must offer alternative operators access to their networks. Together, the operators control some 98 percent of the residential broadband market, and depending on the region, the top two operators always have at least 80 percent of TV customers. The highly concentrated market has led to steadily rising prices in Belgium, which are higher than in neighbouring countries, and made it difficult for any new competitors to enter the market, BIPT said.
In addition to maintaining the current wholesale requirements such as non-discrimination, transparency and the publication of reference offers, BIPT proposed a new pricing structure for wholesale access. Wholesale cable prices would no longer be based on a 'retail minus' method, but be cost-oriented, the same as Proximus already faces on the copper network.
However, cable and fibre networks may charge "fair" access prices, that is with a margin higher than costs, in order to stimulate investment in high-quality infrastructure, BIPT said. The regulator proposed several methods to determine the new price levels, without having to wait for cost models from the operators. In an attempt to narrow the difference in prices applied by the different cable operators based on the 'retail-minus' method, the new prices could be based on national or international benchmarking, followed by cost validation. The dominant and alternative operators also could negotiate their own commercial agreements, which could then be validated by BIPT based on a cost model. Prices for all technical and ancillary services must still be completely cost-based, and the regulator would conduct price-squeeze tests to ensure a proper functioning of the market.
In addition, the BIPT is proposing a new geographical application of the regulation, with a lighter touch in areas where at least three operators offer speeds of more than 30 Mbps. In defining these areas, the regulator would also take into account co-investment plans by multiple operators. In other areas with only one provider of high-speed services, the regulator wants to focus on stimulating infrastructure competition. Hence operators rolling out new infrastructure for high-speed access in these areas could also benefit from reduced regulation, notably in terms of central office access.
The new proposals follow the implementation of wholesale access to cable networks in the last broadband decision from 2011. Since then Orange has started providing fixed services over cable networks across the country, but has struggled to build a large customer base due to its inability to offer a traditional triple-play plan. Its offer only includes broadband and TV, bundled with its mobile services. BIPT is proposing requiring wholesale access to EuroPacketCable, so alternative operators can also offer fixed telephony.
The wholesale obligations could also be extended to Proximus' fibre network, which the operator last year said would be substantially expanded. Several options are proposed for fibre access, ranging from passive access, enabling the alternative operator to install its own equipment, to active access, if the passive access option is technically or economically impossible. BIPT is seeking more feedback from the market on the technical possibilities and interest before proposing a more detailed model.
Orange, which has also invited Proximus to cooperate on fibre roll-out, called for improvement in the wholesale regulation and a quick implementation. It welcomed the proposed strengthening of non-discrimination obligations. These include ensuring an 'equivalence of output' for all network functions, giving alternative operators equal access to technical upgrades, 'Chinese walls' between the network operators' commercial departments and wholesale operations, and allowing a choice of customer premises equipment.
Orange also backed the move to a 'cost-plus' method for setting wholesale cable prices rather than the current 'retail minus' in order to ensure alternative operators can compete. Based on its own analysis of the market and prices in other countries, it wants a a reduction in the cost of wholesale cable access to around EUR 10 per customer per month.
The proposals are open for public comment until 15 September.
