TDC networks are forced to open
The Danish broadband access market is unique in the EU because in a substantial part of the country both the networks capable of providing broadband services, DSL and cable, are controlled by the same operator, TDC. The regulator has long considered that this situation created biased incentives for TDC to invest in one of those networks alone and to circumvent wholesale broadband access regulation which is limited to the DSL network only. Thus alternative operators which depend on TDC’s DSL network risked being unable to compete with TDC’s cable products.
In March 2009 the regulator introduced measures to compel TDC’s Operations and Wholesale division to open its cable network to competitors, allowing them to provide broadband services via TDC’s YouSee cable unit. The move formed part of a policy to open access to different infrastructure for broadband platforms, and followed the Dutch obligation on UPC and Ziggo to open their cable networks to rivals. The regulator’s move to open broadband access was approved by the EC in August 2009, which was concerned that the absence of cable regulation in Denmark might hinder alternative operators from offering broadband. TDC was duly obliged to open its cable TV network to broadband competitors in December 2009, having determined that the company’s control over both the copper network and YouSee’s cable TV network distorted competition in the broadband access market. The regulator considered that TDC had an economic incentive to upgrade only the unregulated cable TV network infrastructure, which currently provides a higher capacity than the DSL network. Without regulated access, competitors were unable to offer consumers the same services as TDC. In addition, TDC’s acquisition of DONG Energy’s fibre network has also encouraged the regulator to assess the need to regulate access to TDC’s new fibre network. This would also be in line with current EC policies – indeed the EC has enforced a number of provisos on the regulator: in addition to regulating cable access, it is obliged to ensure that wholesale costs are not exorbitant, and must extend its vigilance to the fibre access market in anticipation of imposing remedies should TDC launch extensive fibre-based retail offers.
Cablecos remain unconvinced that regulating the cable network for broadband is economically attractive or commercially viable, since such networks cannot support multiple competitors and have limited geographic coverage. Given the cost of providing wholesale access, which must be borne by TDC alone, the regulator is happy to see a case-by-case scenario whereby TDC provisions access on request. This solution may also be extended to fibre broadband in future.
For more information on Denmark’s telecom market, see:
Tagged in: Denmark, Europe
