Tuesday, June 19, 2007

Regulation 2.0 in the Netherlands delayed

KPN and its competitors have asked OPTA for a delay of 1 month; now they have to come up with a 'Full Alternative' to LLU by July 15. Subsequently, OPTA will publish its new ruling by the end of the year.

Should the parties involved fail to reach an agreement, then OPTA has set itself a deadline for publishing a market analysis and proposed rulings by October 15.

I've written many times before about this extremely important topic. KPN is building its 'All-IP' network (including a nice headstart), which includes the closure of MDF-locations (of which there are 1300) and the extension of fiber to the street cabinet (of which there are 24k) level (FTTC). The consequenses include:
  • Heavy investments for KPN, to be financed from the sale of the related real estate, coupled with opex savings.
  • The ability to offer VDSL2 services for IPTV (and triple play). So far, the 'Mine' (IPTV) product is barely marketed, obviously because very few households are located near enough to an MDF (for top ADSL2+ bandwidth) or are covered by VDSL2 pilots.
  • Competitor DSLAMs will be rendered worthless, unless the MDF locations would be kept open after all. However, that in turn would cause interference problems (between KPN's VDSL and any altnet's ADSL services) and it would also give KPN a big advantage (VDSL v. ADSL performance).

Therefore, the closure of MDF locations signals the end of LLU. Sub-loop unbundling (SLU) is the obvious successor, but not economically feasible (according to Analysys). In other words, a 'Full Alternative' (other than resale) is hard to dream up. We will see.

In the meantime, KPN was allowed to buy yet another ISP (Tiscali NL), and T-Mobile is close to acquiring Orange NL. I am sure T-Mobile is interested in the mobile assets of Orange only, which effectively puts the former Wanadoo BB unit on the market. Any lack of interest among the remaining players (Tele2/Versatel and bbned/Telecom Italia):

  • May signal the end of infrastructure-based intramodal competition on the KPN-network, as it would put Tele2's and TI's commitment to the Dutch market in doubt.
  • Which would lead to a duopoly market (cable having near 100% coverage).
  • Which would highlight regulatory asymmetry (no resellers on cable networks).
  • Which would lead to open access to cable networks (OPTA will publish its cable market analysis in 07Q3).

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