Nkom unveils proposed FTR pricing; submits draft rulings on broadband markets to ESA

6 Nov 2018

Norway’s National Communications Authority (Nasjonal kommunikasjonsmyndighet, Nkom) has proposed designating ten operators as having significant market power (SMP) in the market for wholesale call termination on individual public telephone networks provided at a fixed location (Market 1). In a press release regarding the matter, the regulator named the following as having SMP in Market 1: Altibox, Broadnet, eRate, ICE, NextGenTel, Orange, Puzzel, Telenor Norge, Telia Norge and Verizon. Alongside the SMP determination, the Nkom has confirmed its proposed pricing for fixed termination rates, setting the rate at NOK0.005 from 1 July 2019, down from the current rate of NOK0.006, which will then slide to NOK0.004 from 1 January 2021. According to the authority, its decisions related to Market 1 are based on an updated analysis and updated long run incremental cost (LRIC) model for the calculation of termination costs.

With the regulator having now called for feedback on its plans, it has set a deadline of 28 November 2018 for submissions. Once it has evaluated comments arising from the consultation, it will then submit updated draft decisions to the EFTA Surveillance Authority (ESA) for assessment. On receiving feedback from the ESA, the Nkom then expects to issue a final decision, likely in the first quarter of 2019.

Meanwhile, the Nkom has also confirmed the submission of draft decisions related to the broadband and capacity markets to the ESA for its assessment. With regards to Market 3a (wholesale local access provided at a fixed location) and Market 3B (wholesale central access provided at a fixed location for mass-market products), the regulator said it had concluded that Telenor Norge holds SMP in accordance with the new market definitions, and as such will continue to be subject to separate regulation.

In the new regulatory period – which will apply from the start of 2019 – Telenor will be required to provide access to both its copper-based and fibre access networks, though the Nkom said it had found no basis for requiring Telenor to allow access to its HFC network. With regards to access to the telco’s fibre infrastructure, the regulator said it believed there needed to be a change in the existing wholesale product so that alternative operators have better options for designing their own retail offerings. As such, it has been recommended that this improved wholesale product be designed jointly by Telenor and access buyers, via dialogue conducted by the Broadband Forum (Bredsbandforum).

Meanwhile, with access to copper and fibre access networks to be granted on non-discriminatory and transparent terms, Telenor will continue to be subject to price regulation in the form of price caps for traditional access products offered via its copper network, and the Nkom has confirmed its intention to reduce the cost of local loop unbundling from NOK85 per month to NOK73 per month from the start of 2019. For access to fibre-based access networks, meanwhile, Telenor will continue to be subject to margin claims to ensure that its investment incentives are safeguarded, while ensuring that effective access buyers can compete in the retail market.

Rounding out its raft of regulatory decisions, with regards to Market 4 (wholesale high-quality access provided at a fixed location) the Nkom has confirmed that Telenor will still be regulated in wholesale markets for access to fixed access networks. In the capacity market, however, the regulator said it had not found a basis for separate regulation, and as such said the current regulation would be lifted.