Transcript Der Beitrag der Regulierung zur Entwicklung von

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Strategies to achieve for Broadband for all:
Is there an alternative to US?
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Dr. Annegret Groebel, BNetzA
Head of Department International Relations / Postal Regulation
APRITEL Conference – Lisbon, 17 June 2010
Name des Referenten
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Clear answer to the question: yes, there is an alternative:
A market-based approach with a predictable regulation
promoting competition and thereby fostering investment!
© Bundesnetzagentur
Broadband (market) development in Germany
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Number of BB access lines increases continuously: 25mio (end 2009)
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Meanwhile ar. 2.6 mio lines are provided by alternative technologies, mainly
cable connections that bring an additional element of competition
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Market share of competitors in the BB market more than 50%
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With 30.4% penetration, Germany has gained a good position in the
international and EU comparison
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Nearly 25% of all users have a bandwidth of more than 10 Mbit/s.
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With ar. 63% of households having broadband access, for the majority of users
broadband is available
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Broadband Availability in Germany
Total number of broadband connections 2001-2009
Broadband wireless access, fixed connections, FTTx, cable modem, powerline, satellite
 In total around 25 million broadband connections are in operation.
 Almost 90% of all broadband connections are based on DSL.
© Bundesnetzagentur
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National Broadband Plan
Federal Government‘s Broadband Strategy (February 2009):
Goals:
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Nationwide capable broadband access with a minimum of 1 MBit/s by no later than the end of
2010.
A total of 75 % of households should have high speed broadband access with transmission
rates of at least 50 MB/sec by 2014; nationwide access with this high-speed broadband as
soon as possible.
By means of:
(as far as the competences of the Federal Network Agency are concerned)
Regulation geared to growth and innovation
 Infrastructure mapping
 Supportive spectrum regulation
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© Bundesnetzagentur
Broadband Availability in Germany
Broadband map
Broadband availability
01.07.2009
• Broadband internet „1MBit/s“
available for 96.5% of
households (as at end of 2009).
• For 1.35 million German
households capable internet
access is not available.
< 2%
2-25%
25-50%
50-75%
75-95%
> 95%
© Bundesnetzagentur
BB availability without US
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BB is available to the majority of households and 1 MBit/s is available to 96.5% of
German households at the end of 2009 (becoming ubiquitious)
At the end of 2009 BNetzA analysed whether it would therefore be necessary to
include broadband in the US, but came to the conclusion that this is not needed as
it cannot be said definitely that the unavailability of broadband to a minority leads to
social exclusion as the overall availability provides a general net benefit to all
endusers
The most important argument was that with a predictable regulatory framework
fostering competition and thereby investment taking up the technological and
market dynamic shall not be distorted by changing the general conditions as
operators that are now investing out of commercial interest may stop and wait for
public funding or US financing.
Thus there is a risk to reduce the incentives for private investment making use of
the synergies of joint roll-out and using jointly existing passive infrastructure thus
counteracting the Broadband Strategy‘s initiatives and jeopardizing its goals
© Bundesnetzagentur
Umsetzung der Breitbandstrategie der Bundesregierung
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BNetzA‘s tasks of the National Broadband Strategy of the Government (1)
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growth and innovation oriented regulation
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Supporting spectrum policy/regulation (auctioning of the digital dividend)
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Setting up of an (passive) infrastructure mapping (data base)
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Close cooperation with the Cartell Office on co-operation agreements
(The German Federal Cartel Office has published its own assessment of cooperations for fibre roll-out on the grounds of general competition law.)
© Bundesnetzagentur
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BNetzA‘s tasks of the National Broadband Strategy of the Government (2)
(1)
Key elements on the regulatory framework conditions for the development of
modern telecommunications networks and the creation of high speed
broadband infrastructures (NGA Key elements)
(2)
Clarification of regulatory and competition law questions related to cooperation
projects (together with the Cartell Office)
(3)
Developing principles of a consistent rates regulation with a view to promote
efficient infrastructure investment (published in November 2009)
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NGA Key elements (1)

Draft NGA Key elements published for consultation on 13th May 09,
consultation period ended on 1 July, comments were evaluated
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Final version published on 17th March 2010
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Principles for a growth and innovation oriented regulation
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14 key elements outlining the fundamental principles of NGA regulation
confirming applicability of regulatory framework and underlining the
importance of pursuing both objectives: promoting sustainable
competition fostering at the same time efficient investment in highspeed
broadband network infrastructure

Fit in regulation in existing framework providing consistency, and make a
considered choice of ex-ante/ex-post regulation to achieve these
objectives
© Bundesnetzagentur
NGA Key elements (2)
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NGA Key elements for the the development of modern telecommunications networks
and the creation of high speed broadband infrastructures
Published 17 Mach 2010
Main topics
 Open Access
 Co-operations and Co-investment
 Planning certainty
 Access products for NGA-networks
 Migration
 New pricing structures for wholesale products
 Risk adequate equity rate of return (study)
 Setting up of a NGA-Forum
 Importance of the infrastructure mapping
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NGA Key elements (3)
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BNetzA is aware of the importance of modern high speed broadband
infrastructure for the country‘s competitiveness
 Economic and legal predictability to take account of long term planning for
NGA investments, i.e. have longer market review periods – change of the
law from 2 to 3 years (envisaged)
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Necessary transparency on NGA roll-out to have an overview of the
changes of the network architecture
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Continue with a technological neutral regulation

Creating a NGA Forum for a constructive dialogue
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NGA Key elements (4)
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BNetzA welcomes the roll-out of highspeed broadband infrastructure, e.g. by
regional companies
Non-SMP operators should offer voluntary (network-) access products on a nondiscriminatory, transparent and open basis (Open Access). They are not regulated
A scenario where DT AG offers voluntarily access products satisfying the access
seekers‘ demand on a non-discriminatory basis at reasonable prices, is preferable
to a regulatory intervention.
BNetzA supports appropriate models of infrastructure-sharing that are in
conformity with competition law rules and welcomes in principle a nondiscriminatory implementation of co-operation projects
New pricing models (e.g. upfront payments) are in principle compatible with the
cost standard of the cost of efficient service provision, but shall not create a margin
squeeze
In general, transparency shall be increased (e.g. NGA-Forum, infrastructure map.)
© Bundesnetzagentur
Important Regulatory Activities
Setup of a NGA forum:
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Proposed by the Federal Network Agency in its key elements on NGA general
regulatory conditions.
Consists of high-ranking representatives of undertakings, associations, cartel office
and ministry.
Its objective is to discuss practical problems arising from the broadband roll out and
find sustainable solutions on a consensual basis.
First meeting was held at the beginning of May.
Focus on:
• Open Access
• Interoperability
• Infrastructure sharing
• Co-investment
© Bundesnetzagentur
NGA-Forum I
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The NGA-Forum is moderated and chaired by BNetzA. Several
high-level experts that represent the market and have
considerable experience, were invited
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The NGA-Forum shall discuss concrete topics that play a role
for the deployment of NGA networks. In particular it shall be
discussed which possible solutions can be considered for the
improvement of the broadband availability.
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The NGA-Forum shall work transparently and will publish results
– whenever possible – on the BNetzA website.
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Publication of the mandate, mission, members and topics to be
addressed on 17 April:
http://www.bundesnetzagentur.de/cln_1911/DE/Sachgebiete/Telekom
munikation/RegulierungTelekommunikation/NGAForum/NGAForum_n
ode.html
© Bundesnetzagentur
NGA-Forum II
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First informal meeting took place on 16 March 2010.
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First regular meeting took place on 5 May 2010.
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Second regular meeting took place on 14 June 2010
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Issues relevant in the short term shall be clarified until fall 2010
and an interim report published
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Final report envisaged for spring 2011.
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Mandate:
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Incentives for efficient investment
Ensuring sustainable competition
Incentives for an efficient usage/operation of networks
© Bundesnetzagentur
NGA-Forum III
Main topics:
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Open Access
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Cooperation and co-investment
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Technical and operational aspects of access to fibre
networks and other NGA networks (in particular questions of
interoperability)
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Shared infrastructure (e.g. inhouse-cabling)
© Bundesnetzagentur
Infrastructure mapping (1)
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What is the infrastructure mapping?
 A database of BNetzA that contains the existing infrastructure and (planned) rollout projects together in order to exploit synergies in the roll-out by optimizing the
joint use of existing passive infrastructure (cost reduction)
 BNetzA collects the data, feeds it into the format and compiles it in the data base
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Which data is contained in it?
 fibre, ducts, masts etc.
Where is the data from?
 More than 120 companies and institutions provided the data voluntarily
 So far information regarding the infrastructure in more than 2,200 cities,
municipalities or parts thereof have been provided. This covers 6.8 million
inhabitants and 3.2 million households.
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Does the mapping provide a complete overview?
 No, as there is no obligation to participate
© Bundesnetzagentur
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Infrastructure mapping (2)
Compilation of an infrastructure map:
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Task arising from the Broadband Strategy in
order to unleash possible synergies in the
construction of NGA infrastructure.
Infrastructure atlas officially started on 8th
December 2009.
Not only telecommunications infrastructures are
included in the map, but also infrastructures of
other industries, such as energy.
120 undertakings have so far provided their data
on a voluntary basis.
In the initial phase the Federal Network Agency
only provides information on application about the
identity of an undertaking having infrastructure in
a certain area and the competent person to
contact.
183 applications have already been made.
© Bundesnetzagentur
Spectrum Auction 2010
BNetzA‘s tasks of the National Broadband Strategy of the Government (3)
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Regarding the allocation of the digital dividend:
Ensure that digital dividend spectrum is made available timely
BNetzA has published on 16 March 2009 a consultation document regarding the UHF
spectrum (790 – 862 MHz)
On June 12th the German Parliament adopted an amended version of the Frequency
Allocation Ordinance allowing the quick allocation of the digital dividend spectrum
On Oct. 12th the Advisory Council of BNetzA has given its consent to the Decision on
the conditions and procedure of the auction of a total of 360 MHz in the first half of
2010
In order to use the digital dividend to cover the „white spots“ first, roll-out obligations on
a subnational level will be attached to the spectrum, so operators have to start in rural
areas as well
The tasks of the BB Strategy confirm BNetzA‘s regulation promoting effective
competition and efficient investment setting incentives for innovation for the benefit of
the consumer
© Bundesnetzagentur
Spectrum Auction - Coverage obligations
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Each Federal State compiled its own list of all areas needing coverage
Degree of coverage: 90% of the population by 2016
General requirement for each assignee to meet this obligation with 800 MHz
spectrum but it has to be fulfilled only once
Obligation to start roll-out and fulfil the coverage obligations in the less densely
populated areas before being allowed to roll-out in cities etc.
According to the agreement with the European Commission of Dec. 2009 the
Federal Network Agency will scrutinize the level of competition in the mobile
market three months after the auction and take corrective action if competition
issues need to be addressed.
© Bundesnetzagentur
Spectrum auction – Rules
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Auction follows the same rules as previous spectrum auctions (UMTS, BWA)
Entrants bid for desired frequency blocks each bidding round (simultaneous and
independent)
Bidders submit their bids confidentially in separate rooms that are sectioned off
from the publicly accessible parts of the building
The auction ends, when no valid bid for any frequency block is brought forward
Bidding commences 12th April, 13:00
Bidding rounds last 90 minutes, an auction day last from 8:00 a.m. to 6:00 p.m.
© Bundesnetzagentur
Spectrum Auction – Results (1)
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First in Europe to auction digital dividend spectrum.
A total of almost 360 MHz of the 0.8 GHz (“digital dividend“), 1.8 GHz, 2.0 GHz und
2.6 GHz frequency band were auctioned.
Auction started on April 12th and ended on May 20th after 224 rounds of bidding.
Participants in the auction were the 4 German mobile network operators:
Deutsche Telekom, Vodafone, Telefónica o2 and E-Plus.
Altogether the frequencies were auctioned for 4.4 bn €, including more than 3.5 bn €
(appr. 80%) for the digital dividend spectrum.
Successful bidders of digital dividend spectrum need to fulfil a special coverage
obligation to provide services in “white spots” and rural areas which are currently
lacking broadband:
• Licensees will have to cover at least 90% of the population in the cities, which the
federal states identified as being “white spots”, by January 1, 2016.
• Small cities and communities must be covered first.
© Bundesnetzagentur
Spectrum Auction – Results (2)
Outcome of the auction
45
E-Plus
40
40
40
Telefonica O2
40
Telekom
Vodafone
35
30
Spectrum in MHz
30
25
25
20
20
20
20
20
19,8
19,2
20
15
9,9
10
9,9
10
10
5
5
0
800 MHz (paired)
1,8 GHz (paired)
2,0 GHz (paired)
2,0 GHz (unpaired)
Frequency band
© Bundesnetzagentur
2,6 GHz (paired)
2,6 GHz (unpaired)
Regulatory framework and decisions - Investment incentives
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Bundesnetzagentur …
 … has created a stable, transparent and predictable regulatory framework
which is key for investment decisions
 ... especially focuses on setting the right incentives for efficient investments
and promoting innovation.
 … entered early on in a constructive dialogue with all market parties in order to
manage a smooth transition to NGN/NGA promoting both investment and
maintaining the level of competition reached with regulation, namely ULL
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The regulatory decisions have …
 … ensured an approriate balance between service-based and infrastructure
based competition (following the model of the ladder of investment)
 … has set the right incentives for roll-out of fibre infrastructure and innovation
(e.g. by imposing an obligation of access to street cabinets and ducts,
combined with a bitstream product regulation adjusting to the development of
modern broadband networks
© Bundesnetzagentur
Important Regulatory Activities
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Imposition of obligations concerning the market of unbundled local loop:
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In June 2007: fundamental decision on remedies for the unbundled local loop
market:
Collocation in street cabinets
Access to ducts
Access to dark fibre (annulled by the Federal Administrative Court)
In December 2009: Decision specifying the technical modalities of collocation in
street cabinets and access to ducts.
In March 2010: Decision concerning the rates for collocation in street cabinets and
access to ducts.
Draft definition and analysis of bitstream and local loop markets
• Inclusion of FTTH infrastructure due to Deutsche Telekom’s announcement of
FTTH roll-out
• Denial to define subnational markets
after thorough examination.
© Bundesnetzagentur
Access to cross connects and service area interfaces
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DTAG is obliged to offer access to
 service area interface
 empty conduits between main distribution frame (MDF) service are interface
(SAI)
Further obligation to offer access to dark fibre when there is no room left in the
conduits has been overturned by Federal Administrative Court
DTAG has been further obligated to offer access to cross connect, allowing
competitors to bring high speed networks to the customers where the
incumbent is unwilling to invest
© Bundesnetzagentur
Conclusion (1)
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A complete broadband coverage requires the efforts of all market players and the
competition of ideas, technologies and business models. A competitive environment is
the best way to foster investment in NGA-networks to make broadband available to all.
Flexibility in the application of regulatory instruments allows for timely reactions to
technological changes
The Federal Network Agency welcomes co-operation and open access models which
are non-discriminatory and in line with the applicable rules. Voluntary agreements are
preferable to the imposition of obligations by the regulator.
The mobile network operators are called on to promptly make use of the acquired
digital dividend spectrum and start the LTE roll-out.
Key questions still need to be solved. The opportunities offered by the Federal Network
Agency to find consensual solutions, such as the setup of a NGA-forum, should be
actively used and supported by the market players.
Range of regulatory and other instruments must be used consistently to push roll-out of
modern high speed networks to ensure broadband availability for all users
© Bundesnetzagentur
Conclusions (2)
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The tasks of the BB Strategy confirm BNetzA‘s regulation promoting effective
competition and efficient investment setting incentives for innovation for the benefit
of all consumers
Regulation must be consistent and adjusted to NGA economics
Ensure migration from copper to fibre networks and possible convergence with
mobile broadband
There is no contradiction between infrastructure and service competition, but
balance has to be reviewed in an NGA environment as economics of scale change,
adjustment of existing wholesale access products where necessary
Ensure current state of competition is maintained in an NGA environment by
adapting the regulation to deal with technological change while incentivising
efficient investment in new high speed infrastructure and avoid leveraging of SMP:
Telecom Infrastructure will remain an attractive investment for investors
BNetzA’s market-oriented approach is highly successful in promoting competition
and encouraging efficient investment
© Bundesnetzagentur
Conclusions (3)
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The ladder of investment concept remains valid in an NGA environment
as pro-competitive regulation encourages efficient investment
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NRAs need flexibility to adjust regulation appropriately as there is not a
one-size-fits-all approach for NGA with national circumstances varying
largely
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NRAs need to ensure transparency by announcing early on the regulatory
strategy as predictability is key to give investors the necessary
confidence, but investment decisions should be left to operators
rewarding the investment with a risk-adequate rate of return
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Above all the competitive gains and perspectives should not get out of
sight and NRAs should continue to ensure non-discrimination and
prevent margin squeeze to enable a competitive NGA roll-out with joint
projects where appropriate.
© Bundesnetzagentur
Annex
© Bundesnetzagentur
Investments
 Investments in network infrastructure 1998–2008
© Bundesnetzagentur 2010
© Bundesnetzagentur
Jahresbericht 2009
33
Investment in fixed assets for mobile a. fixed networks
© Bundesnetzagentur
Broadband lines - total
30
25,0
25
22,6
1,7
19,6
Mio.
20
2,6
1,1
15,0
15
0,6
10,8
0,3
10
7,0
0,2
4,5
5
3,3
1,9
1,9
0,03
0,1
0,08
3,2
4,4
6,8
10,5
14,4
18,5
20,9
22,4
2002
2003
2004
2005
2006
2007
2008
2009
0
2001
DSL
BWA, Festverbindungen, FTTx, Kabelmodem, Powerline, Satellit
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Broadband market shares
 Retail market share of broadband access
© Bundesnetzagentur 2010
lines 2001–2009
© Bundesnetzagentur
Jahresbericht 2009
36
Broadband penetration worldwide
© Bundesnetzagentur
Broadband penetration in Europa (EU 27)
© Bundesnetzagentur
DSL lines – ladder of investment
 DSL lines and wholesale access
© Bundesnetzagentur 2010
products 2001–2009
© Bundesnetzagentur
Jahresbericht 2009
39
LLU lines
 LLU lines 1998–2009
© Bundesnetzagentur 2010
© Bundesnetzagentur
Jahresbericht 2009
40
Download rates
≥ 10 Mbit/s
24,8%
> 144 kbit/s < 2 Mbit/s
14,6%
2 Mbit/s < 10 Mbit/s
60,6%
Basis:
25 Mio. BB lines (end of 2009)
© Bundesnetzagentur
Data volume in mobile broadband traffic
Mio. GB
33,500
35
30
25
20
15
11,471
10
3,542
5
0,215
0
2005
0,841
2006
2007
© Bundesnetzagentur
2008
2009