Approaches to VDSL regulation in European Countries
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1 Approaches to VDSL regulation in European Countries Dr. Iris Henseler-Unger, Vice-President of the Federal Network Agency WIK Conference on VDSL- The Way to Next Generation Access Networks Königswinter, 22 March 2007
2 I. Status quo broadband in Germany Almost 15 mill. fixed broadband access lines Competitors share by marketing broadband lines about 50% 1) Strongest growth of DSL-lines in the EU 2) 96 % of broadband access lines are based on xdsl-technology Competitors access lines are based almost completely on wholesale products: - ULL/ Line Sharing 55% - DSL Resale 45% 1) by the end of ) in the period between July 2005 and July
3 DSL lines in operation (in m) Entwicklung der geschalteten DSL-Anschlüsse Broadband total: 14,7 14, ,38 Mio ,40 6,77 Prognose 4 3,16 1, e 3
4 DSL-lines of the competitors by sort of access 1) Own realisation ~5.000 ULL Line-sharing Bitstream Resale ) by the end of
5 DSL-Lines and bandwidth in Germany DSL Lines are mainly marketed with bandwidths between - 1 Mbit/s, 2 Mbit/s, 6 Mbit/s and 16 Mbit/s. - Since October 2006 also 25 and 50 Mbit/s via VDSL-Technologie 2 Mbit/s mostly sold bandwidth Distribution of bandwiths in March 2006: 1Mbit/s 2Mbit/s 6 Mbit/s 22,5% 71,2% 6% 5
6 Newest trends in high bandwidth offers DTAG started with the roll out of VDSL-lines: FTTC - investment of 3 billion in 2 years - 12 cities in the 1st stage; another cities later on - demand for regulatory holidays - reconsider of investment plans after change of CEO? Net Cologne started investment in FTTB Competitors and DTAG using ADSL2+ -offers Competion of triple-play-offers 6
7 II. Regulatory Questions & Possible Answers 7
8 Fibre access regulation BNetzA believes that VDSL will be the most important access-scenario in Germany in the next few years Verzweigerkabelbereich Hauptkabelbereich phone TAE jack Installation Montagestelle point Street KVz Cabinet Outdoor- DSLAM Kabelschacht MDF Glasfaser fibre Kupferkabel copper Verzweigerkabel Hauptkabel HVt APL/EVz 8
9 Characteristics of German situation Overlay strategy of DTAG Special situation in number of street cabinets, length of copper lines, therefore in economies of scale High number of LLU-competitors Low competition with cable network operators 9
10 Regulatory Options 1. Access to ULL at street cabinet - Own competitor DSLAM near DTAG s street cabinet - Own competitor DSLAM in DTAG s street cabinet - Own competitor line card in DTAG s street cabinet Neccessary Complement Backhaul services (s. n. slide) 2. Bitstream Access at MDF 10
11 Regulatory Options Backhaul: A competitive investor has three options to reach the street cabinet: 1. Investment in own fibre lines between MDF and street cabinet 2. Rental of ducts 3. Access to leased lines or to dark fibre 11
12 1. Market 11: Unbundled local loop Bundesnetzagentur will publish a new draft Market Definition, Market Analysis and Remedies Decision of market 11 National consultation 12
13 Do all types of acces to the local loop belong to the same market? Copper pair Subscriber PCP MDF DSLAM copper copper Hybrid local loop (special for historical reasons) Subscriber PCP MDF DSLAM copper optic fibre Shorter connection (in future reorganisation of the access network)? DSLAM Subscriber copper PCP optic fibre MDF 13
14 2. Market 12: Bitstream Access Two Bitstream Access markets defined: - ATM Bitstream Access - IP-Bitstream Access Access regulated for both types at parent and distant PoP Access at MDF level included in Market Definition not included in Remedies 14
15 Further Questions in the context with the upgrading of DSL-networks What will happen to the market structure due to technological changes? Are new bottelnecks arising, and do old ones become obsolete? In which timeframe the access networks will change? How broad will be the migration to access network with a shortened ULL (up to the cabinet)? Which is the economical feasible access point for competitors in such a migrated network? Will other wholesale products than ULL become more important in the access/backhaul network? 15
16 BNetzA Challenges Intensify competition further Incentives for efficient investment Supporting innovation Supporting efficient usage of networks Minimizing transaction costs and regulatory costs 16
17 Waiting for: A clear midterm strategy of DTAG and competitors concerning NGN-access-network A voluntary offer by DTAG for access A strategic investor in alternative infrastructure 17
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