KPN criticised in ACM fibre market study

23 Oct 2019

The Netherlands’ telecoms regulator, the Authority for Consumers & Markets (ACM), has published a market study on fibre-optic broadband access network deployment, which identifies problems of rollout bottlenecks in urban and rural areas around the country. ACM’s report noted that: ‘several parties often announce [plans for deploying] fibre-optics at the same location. The double rollout of fibre-optics is usually not profitable as an addition to the existing copper and cable networks. Within the current system, parties can respond strategically to fibre-optic projects of competitors, which are thereby delayed or limited. These behaviours towards competing fibre-optic projects increase the uncertainties for fibre-optic investors. This can cause investors to drop out and therefore lead to fewer investments in the rollout of fibre in certain areas. The opportunities currently available for the large-scale installation of fibre-optics in the Netherlands are therefore not being optimally exploited.’

ACM’s report implies that national incumbent telco KPN uses tactics regarding smaller competitors which could delay the installation of fibre; such practices include KPN announcing it is deploying fibre in an area where a rival is also planning fibre installation, despite the incumbent not having finalised such plans, thereby ‘scaring off’ potential local investors.

ACM suggested potential remedies to the fibre bottleneck issues, including:

• exploring opportunities for joint investments within the competition law framework at the request of the market parties involved

• municipalities, utilities companies and provinces coordinating and publicising conditions they apply for the installation of fibre networks, thereby providing clarity to all parties, avoiding uncertainty among investors and accelerating the rollout process

• giving municipalities options to temporarily protect a ‘first-mover’ party, i.e. the company that initially proposes a plan to deploy fibre in an area.

ACM will discuss its recommendations with the Ministry of Economic Affairs as well as municipality authorities.

As reported by online newspaper, KPN disagreed with ACM’s conclusions in an initial response, highlighting that it seeks agreements with competitors who want to install fibre networks in the same areas as KPN. The telco also indicated that it intended to discuss the matter with ACM.