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Broadband Access
Dutch Regulator Jumps to Altnets' Aid
Forces KPN to Delay Closure of Exchanges
by Iain Morris
OPTA, the Dutch regulator, is proposing legislation that will
prevent incumbent operator KPN from closing exchanges at
which its competitors have installed their own equipment.
But the regulator says that it will allow KPN to scrap them once
alternate network providers have recouped their investments. It hopes this will
foster infrastructure competition in years to come.
KPN is currently rolling out high-speed Fiber-to-the-Curb
infrastructure in the Netherlands – an investment that it wants
to finance by closing its 1,400 local exchanges and selling the
properties that house them. Doing so will cripple the business
of alternative providers that have installed their own
equipment in those exchanges during the process of local
loop unbundling.
However, OPTA is planning to give competitive providers just two and a half
years to begin investing in similar street-level networks to
KPN’s before it does allow the incumbent to shut down those
exchanges. In instances where competitive providers’ equipment has not
depreciated, that timeline will be extended to five years.
OPTA believes that encouraging the rollout of new networks is
the best way to boost competition and reduce regulation in
the long run, but it admits that unless new investments are
forthcoming the country will have taken ‘two steps back’ in
terms of competition.
And already the outlook is bleak. Uncertainty has compelled
some of KPN’s rivals to sell their businesses to the incumbent
and quit the market – a development that has so far made
the sector far less competitive than before.
Only last month, KPN acquired the Dutch operations of
Italians ISP Tiscali, paying €255 million for the business and, in
the process, increasing its share of the DSL market to more
than 70 percent.
At the time, Tiscali complained to the regulator that it could
not justify additional investment in its Dutch business
because of market insecurity. Analysts have speculated that
the survival of more than one rival DSL player is unlikely, and
that most of the future competition to KPN will come from
cable operators.
The growth of the cable business and new marketing
initiatives undertaken by KPN have exacerbated the problem
for the DSL community.
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