• Categories

  • Pages

  • Digg”
  • Statcounter

  • Shinystat

  • Expertcounter

    Free Counter, Blog Counter

EU: Broadband – Commission consults on regulatory strategy to promote very high speed Internet in Europe – frequently asked questions

12 06 2009 – The European Commission has launched a public consultation on its revised proposals for the regulation of Next Generation Access (NGA) broadband networks, in the form of a draft Commission Recommendation.

A previous public consultation held during the last quarter of 2008 confirmed general support for the objective of the Commission to achieve a common regulatory framework for NGA in order to foster timely investment in very high speed networks while ensuring that the competitive structure of the market is maintained.

In the light of comments from stakeholders, the revised draft Recommendation includes mechanisms to allocate the investment risk between investors and operators seeking access to NGA networks. The draft Recommendation forms part of the European Broadband Strategy that the March European Council invited the Commission to develop by the end of 2009. The public consultation will be open until 24 July 2009. The Commission plans to adopt the Recommendation, taking account of comments received, before the end of 2009.

EU Competition Commissioner Neelie Kroes stated: " For consumers and businesses to be able to reap the benefits of competitive very high speed broadband services, we need a common pan-European regulatory approach to NGA broadband networks. This consultation will help to ensure that the Commission Recommendation gives the necessary legal certainty to encourage large scale investment in new fibre infrastructure for very fast broadband internet services while safeguarding effective access to NGA networks for competitors."

EU Telecoms Commissioner Viviane Reding said: "High speed fibre networks are the new generation of broadband infrastructures in Europe. In order to give citizens and businesses across Europe access to fast broadband Internet, very large sums of private and also public money will need to be injected in the coming years. Investors therefore need to know the rules of the game. The aim of the planned Commission Recommendation on next generation access is to provide legal certainty for all players by providing national regulators across Europe with clear guidance on the regulatory approach to be taken. I call on all stakeholders to contribute actively to the new public consultation in order to help us achieve the right balance between effective competition in the broadband market and giving the right incentives for sustainable investment in Europe’s high speed networks."

The revised draft Recommendation would include mechanisms to allocate investment risk between investors and access seekers. In particular, to foster market-driven investment outside densely populated areas, the draft Recommendation defines conditions under which co-investment schemes could be deemed pro-competitive. Under the draft Recommendation, deployment by the dominant operator of multiple fibres could justify less stringent regulatory obligations. The competitive advantage of having multiple fibres in the ground is that it allows immediate and undistorted infrastructure competition.

The revised draft Recommendation endeavours to develop a pan-EU common regulatory approach, which telecoms regulators would adapt to national market conditions. The approach proposed by the Commission aims at driving infrastructure-based competition where it is possible and efficient, while ensuring a seamless migration from copper to fibre-based networks.

The Commission organised a first public consultation on a draft Recommendation on the regulated access to Next Generation Access Networks in 2008 (see IP/08/1370 ). The consultation confirmed the need to provide guidance on how the current regulatory framework should apply to NGA investment, in order to avoid Single Market distortions and create legal certainty for stakeholders. It also confirmed general support for the proposed balance between investment incentives and the protection of broadband competition. However, there were also calls to consider alternative mechanisms to diversify the specific risk of NGA investment as a way to foster investment in fibre.

The March 2009 European Council called for cooperation between investors and operators to be authorised so as to diversify the risk of investment in NGA, whilst ensuring that the competitive structure of the market and the principle of non-discrimination are maintained.


Broadband access is currently regulated by national telecoms regulators. The objective of the Commission’s Recommendation will be to foster the application of consistent access remedies on dominant NGA operators.

See also MEMO/09/274 .

The Commission’s public consultation document can be found at:


Input to the Commission’s public consultation can be sent to:


Commission consults on regulatory strategy to promote very high speed Internet in Europe – frequently asked questions (see also IP/09/909 )

What are Next Generation Access networks?

Currently broadband is provided by telecommunications operators to their subscribers via the same copper wires that have been used for telephony since its invention in the 19 th century. However, new broadband services such as online gaming, high-definition TV and interactive applications require enhanced network characteristics including higher bandwidths that cannot be provided over copper infrastructure. To provide these services it is necessary to replace the copper infrastructure connecting the end-users to the local switches (the "local loop") by optical fibre. These new fibre-based access networks are referred to as "Next Generation Access networks" or "NGAs".

Two main forms of next-generation fibre access can be distinguished, depending on how close the fibre is brought to the end-user. Fibre can be rolled out all the way to the customer’s premises (Fibre To The Home, "FTTH" also designated as Fibre to the Building "FTTB"), or it can be rolled out to an intermediary concentration point (Fibre To The Node, "FTTN" also designated as Fibre To The Cabinet "FTTC") and copper wires remain in use for the final connection to the customer 2 . FTTN architecture allows download speeds of up to 50 Mbit/s depending on the configuration. FTTH architecture allows download speeds of 80 Mbits/s or more with current technologies, and almost unlimited bandwidth in the long term with technological advances in photonics equipment.

Why regulate NGAs?

In the EU Member States, national telecoms regulators currently regulate broadband to avoid distortions of competition. Incumbent operators are required to provide access to their networks, which cannot be duplicated in a reasonable time period, to enable consumers to choose between broadband providers. The roll out of NGA networks does not remove the existing competition concerns regarding broadband, i.e. that incumbents could leverage the dominant position they enjoy as owners of non-replicable legacy access infrastructure to monopolise new broadband services provided over this infrastructure and thereby limit consumer choice.

Currently, the wholesale broadband markets warrant ex-ante regulation, under the Commission Recommendation on relevant markets (see IP/07/1678 ). Unless it can be established that NGA access services are markets different from the current regulated wholesale broadband markets, dominant operators with significant market power (SMP) in these markets are within the scope of the Recommendation and access to their NGA networks should be regulated. Proper broadband regulation remains a necessity to ensure a level playing field amongst NGA investors and brings benefits to consumers, including better services, more choice and lower prices.

Who regulates NGAs?

The regulation of broadband in each Member State is the responsibility of the national regulatory authority (NRA). In accordance with the EU’s Telecoms Rules, where an NRA determines that a relevant market is not effectively competitive, it shall identify operators with significant market power and impose appropriate regulatory obligations (see MEMO/07/457 ).

Some NRAs have already adopted obligations concerning access to the NGA infrastructure of the dominant national operator (including France and Portugal in the case of FTTH and Germany in the case of FTTN). Other NRAs have further specified obligations concerning infrastructure sharing.

The national regulators have started reflecting on the regulation of NGA and published a position paper on this issue at the occasion of the review of the EU electronic regulatory framework 3 .

Why is the Commission now intervening?

The Commission believes that it is important to provide regulatory guidance to the NRAs at an early stage of NGA rollout to ensure a smooth transition. Inconsistent regulatory responses throughout the EU would undermine national and cross-border investment in NGA. Moreover, competition may be harmed due to improper regulation or the absence of regulation which would allow incumbent operators who own most of the infrastructure and have the largest customer bases to monopolise the broadband retail services.

The Commission’s Recommendation will provide a framework to examine the measures proposed by the national regulators for the rollout of NGAs under the Community consultation mechanism (the so-called Article 7 procedure). For a key development such as the roll out of NGA networks, it is more efficient to provide overall ex-ante guidance to the national regulators than case-by-case comments.

What will be the potential effects of the Commission’s intervention?

So far, f ibre networks have been deployed slowly across the EU, covering often only a marginal share of national markets. The deployment of NGA networks will occur gradually. Regulatory predictability is clearly one of these conditions. The Commission’s Recommendation will provide regulatory certainty to investors by ensuring a consistent application of regulatory remedies throughout the EU, thereby facilitating cross-border investment, and consolidating the internal market for electronic communications.

As importantly, the Recommendation will guarantee fair competition during the roll out of NGA by ensuring that national regulators mandate appropriate access to the infrastructure of the SMP operators. This will ensure long term sustainable competition and increase consumer choice and innovation.

How will consumers benefit from the Commission’s intervention?

The deployment of NGA is necessary to allow EU consumers to use various new broadband services. Therefore, the NGA rollout will contribute to long term consumer welfare. It will also offer large growth opportunities to the IT and content industries and to the European economy as a whole.

Enhanced competition between operators helps to encourage service innovations and to convey broadband prices to the lowest level, as illustrated already in the French or the UK market. More competition and choice for consumers are the essence of the new EU Telecoms Rules proposal (see IP/07/1677 and MEMO/09/219 ).

Will regulation only be imposed on dominant operators (SMP operators)?

The overall objective of the Recommendation will be to foster the application of consistent regulatory remedies on dominant NGA operators in broadband markets in order to prevent them from leveraging their dominant position to new broadband services markets. The recommendation is therefore mainly "asymmetric", i.e. rules are imposed only on dominant operators with significant market power.

However , the Recommendation is without prejudice to stricter measures adopted by Member States.

What type of access will be imposed on dominant operators?

In general, the Commission considers the facilitation of infrastructure competition as the preferred regulatory option. It allows sustainable competition in the long term and increases consumer choice and innovation. With civil works representing up to 80% of the total rollout costs of NGA, an efficient remedy would be to ensure a cost orientated non-discriminatory sharing of legacy physical infrastructure. In most cases however the deployment of parallel fibre networks is not viable because no ducts are available or because the population density is too low for a sustainable business model. Access to other passive elements (unbundling of the fibre loop) or access to active elements – service based competition ("bitstream") – should also be mandated, according to the draft Recommendation.

The draft Recommendation requires NRAs to analyse the entire telecoms value chain in a consistent manner and in particular to analyse markets 4 & 5 in a coordinated way. This should lead to a minimum, proportional and consistent set of remedies resulting in effective competition on the downstream market.

How is the question of NGA investment risk addressed in the Recommendation?

The draft Recommendation recognises the risk involved in certain NGA investments and the need to properly allocate it between access seekers and providers in order to foster investment in fibre.

In particular, the deployment of FTTH networks normally entails considerable risks given the demand uncertainty for enhanced services which can only be delivered via fibre and the possibility of large irreversible investments. In such cases, the draft Recommendation provides that NRAs should assess whether a higher risk premium should be granted when deriving access prices. IfAdditional mechanisms to distribute the risk between investors and access seekers could also be used, such as long-term commitments or volume discounts. Such adjustments should however only reflect the reduction of risk for the investor.

Co-investment in NGA also allows distributing the risk between co-investors. Co-investment schemes will foster the deployment of NGA networks, in particular outside densely populated areas. The draft Recommendation defines the conditions under which such co-investments can be deemed pro-competitive.

Is the Commission not granting a form of "regulatory holiday" to the incumbent operators by allowing co-investment or risk-sharing mechanisms?

Incumbent operators with SMP will remain subject to regulation and will have to provide appropriate access to their NGA infrastructure. The draft Recommendation acknowledges however that under specific circumstances, co-investment schemes are likely to lead to effectively competitive situations and thus to the absence of SMP. In addition, co-investment schemes should in all cases be regulated proportionally to the objective of promoting efficient competition and investment. In certain conditions, listed in the draft Recommendation, less restrictive regulation will be sufficient to attain these objectives.

In all cases of more flexible regulation, additional safeguards will ensure that the SMP operator cannot engage in abusive practices, be it unilaterally or in collusion with co-investors. The draft Recommendation provides therefore that NRAs should control the SMP operator’s pricing behaviour by applying a properly specified margin-squeeze test to ensure that a sufficient margin remains to allow entry. NRAs should also co ntrol possible collusive behaviour between NGA co-investors. In any circumstance NRAs will reassess the competitive situation at each periodic market reviews (every 2/3 years) and impose stringent access conditions if deemed necessary.

Why is the deployment of multiple fibre lines important?

With Multiple fibre FTTH, an investor deploys more fibre lines than needed for its own purposes in order to sell access to the additional fibre lines to other operators. The deployment of new networks provides a unique opportunity to develop long-term sustainable infrastructure-based competition. Multiple fibre deployment costs marginally more than single fibre infrastructure and will from the outset allow for infrastructure competition and consumer choice. Multiple fibre deployments will also preclude operational difficulties of sharing one access line between several operators, as is still experienced today for copper loop unbundling (10 years after the first unbundling regulation was adopted). In contrast to single line unbundling, multiple fibre allows immediate access to the end-user (no unbundling procedure) and full independence between the operators to provide high-speed broadband offers and to compete on the retail market.

See exhibit 1 (Source OFCOM’s public consultation September 2007 http://www.ofcom.org.uk/consult/condocs/nga/future_broadband_nga.pdf )

See exhibit 2 (Source idem)


and http://www.erg.eu.int/doc/publications/erg_07_16rev2b_nga_opinion_suppl_doc.pdf

Vodafone proposes $6b broadband consortium

image 21 05 2009 – Vodafone New Zealand has submitted a proposal to the Ministry of Economic Development (MED) for the government’s plan to install a national next generation network (NGN), Stuff.co.nz reports.

Vodafone’s white paper suggests a co-investment model, combining public and private investment to fund a new network business, dubbed FibreCo.

"Competitors become investors and investors become competitors," Vodafone said.


Vodafone said, ‘This idea assumes [industry-wide agreement] that we will not accept moving from a copper access monopoly to a fibre access monopoly.’ Vodafone’s plan calls for itself, Chorus – Telecom New Zealand’s network arm, and TelstraClear to put their network assets into the new business that would be jointly owned by the trio and the government, which would invest through its NZD1.5 billion (USD906 million) broadband fund. FibreCo would then provide wholesale services to its shareholders, and its shareholders would compete in retail markets.

How it would work

FibreCo would only sell to its shareholders and its shareholders would compete in downstream wholesale and retail markets. Non-investors would gain access to the network as wholesale customers of shareholders on competitive commercial terms.

FibreCo would treat its shareholder customers on an equal basis and be independent of them, operating on an arm’s length basis.

By way of example, three shareholders could invest $1.5 billion each and the Crown could invest $1.5 billion to provide $6 billion for a network.

Effectively the co-investment model is a "pay then take" arrangement for shareholders.

FibreCo would operate at a modest profit in the long-term and not overbuild existing assets. It would have the ability to buy rights over shareholders’ existing assets.

Where to from here?

Vodafone said it did make a submission to the Ministry of Economic Development (MED) on the government’s broadband plan.

Its "white paper" released on Thursday was fuller than the submission and it was sent to MED on Wednesday.

Vodafone argued that the existing regulatory model may not be appropriate for next generation access networks.

"The FibreCo concept will rely on a commitment from the government not to intervene in the operation or FibreCo or its downstream markets," Vodafone said.

This agreement would be conditional on FibreCo meeting agreed criteria.

Vodafone said FibreCo was a big idea that required co-operation between the government and private sector.

"This idea assumes industry wide agreement that we will not accept moving from a copper access monopoly to a fibre access monopoly," Vodafone said.

Source: Telegeography

YME: Ημερίδα “Δίκτυα Επόμενης Γενιάς και Εφαρμογές”

05 05 2009 – Το Υπουργείο Μεταφορών και Επικοινωνιών σε συνεργασία με τη Διεθνή Ένωση Τηλεπικοινωνιών (ΙΤU) πραγματοποιεί ημερίδα με θέμα: «Δίκτυα Επόμενης Γενιάς και Εφαρμογές».

Τα επί μέρους θέματα της ημερίδας, στο αμφιθέατρο του ΥΜΕ την Παρασκευή 8 Μαίου 2009 και ώρα 09:00, είναι τα παρακάτω:

• Αρχιτεκτονικές των Δικτύων Επόμενης Γενιάς. Θα περιγραφούν τα σημαντικότερα χαρακτηριστικά τους, η τυποποίησή τους από την Διεθνή Ένωση Τηλεπικοινωνιών καθώς και οι μελλοντικές προοπτικές.

• Μελέτες περιπτώσεων Δικτύων Επόμενης Γενιάς. Θα εξεταστούν θέματα που σχετίζονται με την εφαρμογή των Δικτύων Επόμενης Γενιάς σε επίπεδο τεχνικό, ρυθμιστικό καθώς και κανονιστικό ως προς τις αναγκαίες υποδομές για την υποστήριξή τους.

• Εφαρμογές των Δικτύων Επόμενης Γενιάς. Θα γίνει παρουσίαση των υποστηριζόμενων υπηρεσιών, όπως ευρυεκπομπής – πολυεκπομπής, διανομής πολυμεσικών εφαρμογών και αντιστοίχων αρχιτεκτονικών, καθώς και τρόπων βελτίωσης της απόδοσης των δικτύων και των υπηρεσιών.

Η ημερίδα αυτή είναι η δεύτερη από τρεις ημερίδες που πραγματοποιούνται στο διάστημα Απριλίου – Ιουνίου 2009 και που εντάσσονται σ’ ένα ευρύ πρόγραμμα συνεργασίας με την ΙΤU το οποίο μεταξύ άλλων περιλαμβάνει και την ανάπτυξη επιδεξιοτήτων μέσω της συνδιοργάνωσης με την ITU ειδικών εκδηλώσεων, ημερίδων και σεμιναρίων.

Πηγή: ΥΜΕ

Portuguese govt commits funds to next-generation networks

The Portuguese government has signed agreements with the major telecom network operators on developing next-generation networks for the country. The agreements include a line of credit worth EUR 800 million for investments in new networks and possible EU development funds for broadband deployment. The agreement includes two protocols signed between the ministry for communications and the industry groups AET and APDC. In December the government already agreed to include broadband development in its economic recovery plans. It has now also committed to developing legislation to reduce barriers to investment in new networks and ensure equal access to the new infrastructure. It will also work on developing more fibre ducts, improving fibre access to buildings and supporting rural broadband projects through tax benefits. In return the operators have agreed to roll out fibre networks supporting 1.5 million users this year, and also cooperate with regulator Anacom on developing the new regulatory framework. They will also work to promote broadband and develop new services for business and social improvements.

More …

Telecom Italia, FastWeb to Build Italy’s Next-Generation Broadband Network

Πηγή Communication Direct News – 23 06 2008

Telecom Italia and local rival FastWeb have signed an agreement to partner in the roll out of a next-generation broadband network in Italy. In a move which will likely create a template for other European countries faced with the likelihood of multiple high-speed network roll-outs, Telecom Italia and FastWeb said they will collaborate on an industrial scale to hasten network roll-out and avoid unnecessary duplication of high-speed networks across the country and rationalise costs. Under a memorandum of understanding signed by Oscar Cicchetti, head of Telecom Italia’s Domestic Market Operations division, and Stefano Parisi, chief executive of FastWeb, both companies said they will jointly plan cable laying for their respective fibre-optic networks and will also exchange rights of use of civil infrastructure. In addition, the companies said they will jointly study and test innovative infrastructure techniques, such as the latest generation of micro-tubing for laying optical fibre.