16 Rev2b NGA Opinion Supplementary doc - IRG

ERG (07) 16rev2b NGA Opinion Supplementary Doc 27 / 69
by case basis the most suitable access product. An inconsistent price system would distort
incentives for climbing up the ladder (Arcor). One comment explicitly supports the proposed
modifications of the ladder in order to ensure continuity of investment and competition in an
NGA environment (ECTA). But this does not imply that substantial further investment up the
ladder will be efficient or viable in all areas. Rather, the ‘ladder’ should be seen as providing
a complementary suite of products that will enable investment as far is feasible (FttX roll-outs
in some regions, LLU or WBA in other). The complementary notion of the ladder - in particular
for regions without own network deployment - is also emphasized in another comment
calling for maintenance of a full range of access offers (Colt). Even an incumbent agrees
with the ladder as presented by the ERG, pointing out that “in given areas new entrants can
climb up by FttCab investments or moving directly towards, FttB/H (TI).
Others also stress the increasing importance of Bitstream (ONI, QSC) as difficulties for competing
at an infrastructure level increase making it necessary to reposition on the ladder
(ONI). The other comments see insufficient chances for entrants to step on the next rung of
the ladder as a reason for increasing importance of Bitstream. Line Card Access should be
closer looked at as a realistic step on the ladder (QSC).
Another comment, supporting the idea of the ladder, sees the risk that the ladder “might degrade
to a one step ladder, by applying Bitstream access as NGA for new entrants only”
(Silver Server).
ERG Considerations
From the ERG’s perspective, providing multiple access points on different rungs of the ladder
is not contradictory to the aim of infrastructure competition and the principle of promoting
competition at the deepest level.
This principle is still applicable and appropriate in an NGA context. Infrastructure based
competition should be followed where it is practical and economically feasible.
In order to take account of the comments and to clarify the ERG’s understanding as regards
the ladder concept, the following points were added to Chapter 4.6 of the Opinion (4.5 in the
Consultation Document):
Thus, NRAs will strive to maintain the level and balance of infrastructure competition
achieved and pursue the movement up to the economically viable rung which may vary
across Member states and within Member States depending on regional characteristics.
The ladder of investment may become more “sophisticated” and the relative importance of
the rungs may change in an NGA environment, albeit not the overall form of the ladder with
several rungs requiring more investment in own infrastructure the higher the rung reached.
In case an SMP operators phases out its MDFs, the reactions from competitors can be different
and the picture will become more differentiated. Some alternative operators will not
move to the street cabinet, but make more use of such an enhanced BSA product, while others
will invest in own infrastructure and move further down to the customers. However, even
those who do invest, will not do so everywhere (as the incumbent), but only in those areas
where the economics will allow a business case, i.e. to street cabinets with a minimum number
of reachable customers. In order to reach national scale, these operators will draw on
BSA products (and other access products) too in areas where they do not roll-out to the customers
to complement their offers.