Wednesday, 9 December 2009

Chris Fonteijn, OPTA vision on infrastructure and next generation networks (fixed and mobile)

I start with some propositions. Propositions are never fully true, but that will lead to debate.
1. We’re doing very well in The Netherlands
2. FTTH is only used for downloading of movies and music and there are no services available for it
3. Municipalities should only facilitate the FTTH roll out and not invest in it.
The Netherlands is leading Europe in broadband connections. The price for broadband internet have dropped with84%. According to the OECD we’re the cheapest country in the world with regards to mobile bundles. Bundling is very important in the Netherlands. With FTTH we see steady growth and Reggefiber has 388.000 connections. We believe that the market has the primacy. The market delivers new innovation. Even though market is a dirty word at the moment.
If you look at competition in The Netherlands. We have always focussed on infrastructure competition. There has been some evolution in our thinking. The Commission started with the ladder of investment. New entrants would grow and would roll out multiple networks to the end-user. We do see that this vision hasn’t become reality. And we do believe that 2 is not enough. Having just cable and KPN is not enough for the market. Access regulation has served us well with KPN. We will look at cable too. We want to give investors long term regulatory certainty.
The future is bundling. We haven’t looked at bundling yet in our market analysis, but this will come. We expect in the future that content will become part of it too. We are concerned about the business market where KPN is still too large. With the Wholesale Cable regulation we want to give new entrants access to the analogue signal. This is still a very important competitive advantage for the cable networks. With fibre we want an open network, but have also seen that it isn’t going as fast as we had expected. This however isn’t our concern.
We do see a roll for the government in FTTH but it should be very limited. They should only facilitate. Competition should be the idea. Competition is the reason we have Docsis 3. Competition is why KPN works with Reggefiber. I do wonder what the consumer will benefit from fiber. We haven’t seen much yet. We don’t care too much about the technology, but what the consumer will get. We do see fiber as an end play.
We understand fiber is a risky investment. As the first regulator in Europe we have given long term certainty to private operators. We don’t see a big roll for the government in  investing financially in the network. In the Netherlands competition is taking the lead and I don’t know if municipalities can accelerate growth. Governments can disrupt competition if they invest financially in new networks. We also wonder if private parties don’t profit too much from governments cooperating with them. Profit too much compared to other existing parties. We expect much from competition. Combined with our regulation and local governments making FTTH roll out easy. I do believe we have created the right conditions and the business now will have to do it.

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