Monday, March 05, 2007

The market will decide on regulation 2.0 in the Netherlands

OPTA, in its 'late February' (February 30, aka March 2) letter, has decided to let the market come up with an alternative for LLU. KPN will not be separated, neither functionally (Openreach style) nor structurally.

(As fiber is pushed deeper into the network, LLU will be replaced by SLU.)

Market parties (KPN, the ACT body (excluding bbned), bbned and Reggefiber) responded to OPTA's January 24 letter and are in talks. OPTA will monitor the process and expects a solution within 3 months. By 07Q2 it will publish both findings and rulemakings.

Further, OPTA has asked NERA to look into options for Openreach-style separation of KPN in the Netherlands. Unsurprisingly, NERA concludes that there are some large differences between the Dutch v. the British market: national cable coverage; Dutch regulators legally cannot force structural separation upon KPN (Ofcom threatening BT to refer the case to the Competition Commission was instrumental in getting the company to cooperate); service-based competition on the PTT-network takes away the stimulus for both altnets & PTT to invest in the local loop (FTTH).

In other words, the reach of cable and KPN's willingness to work with altnets stave off the threat of separation (functional or structural).

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