Presentation is loading. Please wait.

Presentation is loading. Please wait.

Broadband to everybody!? Torstein Olsen Director Norwegian Post and Telecommunications Authority LLU Conference, Bucharest, 5 July 2005.

Similar presentations


Presentation on theme: "Broadband to everybody!? Torstein Olsen Director Norwegian Post and Telecommunications Authority LLU Conference, Bucharest, 5 July 2005."— Presentation transcript:

1 Broadband to everybody!? Torstein Olsen Director Norwegian Post and Telecommunications Authority LLU Conference, Bucharest, 5 July 2005

2 Agenda 1.Background for the reference offer for LLU ( and bit-stream access ) in Norway 2.Regulatory framework; issues and actions 3.Broadband development 4.New regulatory framework 5.Conclusions

3 Process prior to the launch During 1999, Telenor and Telia were undergoing an approval process towards the European Commission aiming at merging the two companies Quite early in the process, it was clear that an LLU offering would be a prerequisite from the Commission to approve the merger A draft offer was presented to the Commission The merger was cancelled Dec 1999, and the undertaking was no longer binding for the parties However, March 2000, Telenor decided to launch the product - without any legal requirement

4 Rationale behind the launch Deployment of competing access networks: Telenor intended to be a market player within resale of access Contributions to innovation and value creation in Telenor’s access network One of several initiatives to ensure a maximum level of broadband rollout, paving the road for new services Indications from EU and national regulatory authorities that new entrants should be provided with access to the incumbent's access network

5 Regulatory framework (2001-2005) Regulations on public telecommunications networks and public telecommunications services (amended 6 February 2001), section 3-2a (Access to the local loop): –Bit stream access to the local loop shall be offered to other providers on equivalent and non-discriminatory terms and at a quality equivalent to that offered to own undertakings. All reasonable requests for specific capacity shall be complied with. The Ministry may make decisions concerning cost orientation. –Access to the local loop shall also include full and partial access in compliance with Regulation (EC) No. 2887/2000 of the European Parliament and of the Council of 18 December 2000 on unbundled access to the local loop. The Regulation is hereby adopted as secondary law. In connection with the provision of full and partial access to the local loop the requirements regarding cost orientation shall apply, cf. Regulation (EC) No. 2887/2000.

6 Issues related to the LLU product (1) The Reference Offer (Agreement) published by Telenor in 2000: –The terms were in our view biased (not reasonable). –Based on our comments Telenor made some changes in the agreement –Decision made by NPT 3 July 2001 covering i.e.: Fault handling (compensation) Service Level Agreement (SLA)

7 Issues related to the LLU product (2) Collocation –Section 4-7: “Telenor shall comply with any reasonable request for collocation” –Inspections made by NPT staff (space in 3 exchanges) –For a period of time Telenor had to report to NPT all cases were requests for collocation were “turned down” Pricing of shared access: –Decision made by NPT 11 April, 2002; 50/50 split of costs between telephony and broadband service, which led to substantial reduction of price for shared access Automatic change from shared to full access if the subscription for telephony is ended (naked DSL) – an extra fee is added Broadband providers decide how to price the end user product (how to include the extra fee for “naked DSL”)

8 Broadband subscriptions

9 Share of residential/business customers

10 Broadband penetration – residential market Approx. 80% of subscriptions are based on ADSL The coverage in Norway is 90% in 2005

11 The new regulatory framework NRA responsible for: –Market Definition – identification of relevant markets –Market Analysis – assessing the degree of competition and finding operators having significant market power (SMP) –Remedies – imposing appropriate obligations on SMP operators NPT published the analysis of the broadband markets for consultation in 2004: –Telenor has close to 100 % of the market for unbundled lines – strong indication of SMP –Telenor has about 65 % of the market for bit stream access – indication of SMP

12 Regulations of market 11 (LLU) Infrastructure based competition is not likely –Focusing on service competition –Give incentives for maintenance and upgrading Continued regulated access to the fixed access network Existing prices of LLU are cost oriented and based on the principle of current cost (CCA) –Other methods could be used

13 Regulation of market 12 (Bit-stream) Infrastructure competition is more likely –Enable new entrants to establish a customer base and gradually build their own infrastructure –Ladder of investment Obligation to offer a bit-stream product –Milder overall regulation than in marked 11 Existing bit-stream product is not price regulated

14 Draft decisions published July 1, 2005 Draft new decision on remedies according to the new framework in the relevant broadband markets (market 11 and 12) –Confirms mainly the existing regulations of the markets but LLU –Cost method is changed from CCA to Historical Cost Accounting (HCA) which means –A requirement to reduce the wholesale price with approx. 40% in 2 steps in 2006 and 2007 –From NOK 135/75 to NOK 82/46 for full/shared access (VAT excluded) –To achieve an even keener competition and lower prices for the benefit of all end users

15 Conclusions Alternative networks (e.g. cable) are a challenge to the incumbents fixed access Mobile telephony is a challenge to fixed telephony Alternative use of the fixed network might be necessary Shared use of the fixed access network might be a way forward; several players can do more to promote the broadband rollout by ADSL, but A balanced RUO is necessary to encourage new entrant to invest

16 Further information www.npt.no www.bredbandsporten.no www.telepriser.no


Download ppt "Broadband to everybody!? Torstein Olsen Director Norwegian Post and Telecommunications Authority LLU Conference, Bucharest, 5 July 2005."

Similar presentations


Ads by Google