Developments 5G and fixed networks: new battle for access?

Bas Braeken & Jade Versteeg & Demi van den Berg & Joost van Belois
21 Mar 2024


The further development and roll-out of new telecommunications networks is still high on the European and Dutch agenda today. Following the much-discussed auction of the radio frequencies, 5G frequencies are expected to go under the hammer in the Netherlands in 2024. As touched upon in our earlier blog, there have been several legal proceedings in recent years that have delayed the process enormously. With the final decision on the allocation of frequencies published in February 2024, the 5G auction is finally in sight.

Besides the development of 5G, the roll-out of fibre-optic networks and access to fixed networks have been important agenda items for the Netherlands Authority for Consumers and Markets (“ACM”). In 2023, it published several decisions regarding the access of third-party providers to fixed copper and fibre-optic networks, thereby confirming the envisaged shift towards further deregulation in the area of wholesale access to the local loop (“local access”).

In this blog, we discuss recent competition and regulatory developments in the field of mobile and fixed telecommunications networks.

Developments 5G

Roll-out and development of 5G networks

In its February 2024 White Paper on digital infrastructure policy, the European Commission (“Commission”) once again calls attention to the (technological) investments needed to realise ‘Europe’s Digital Decade’ by 2030. The aim is to have the full 5G network rolled out in all populated areas of the EU by 2030. The associated costs are estimated at around € 400 billion. In that context, several mobile network operators (“MNOs”) expressed their concerns about rising costs due to the increase in network traffic. They argue that they do not have enough resources to invest (quickly) in the further development and roll-out of their networks. According to them, large online service providers, including some Big Tech and video streaming companies, should contribute towards the costly rollout of fibre-optic and 5G networks, as they are responsible for much of the network traffic.

The Commission therefore recently launched a consultation on the possibility of levying a certain ‘internet toll’ or ‘fair share’. The Dutch Ministry of Economic Affairs and Climate Policy (“Ministry”) already expressed a negative view on this initiative in 2023. Citing an Oxera report, the Ministry argues that any such tolls will not effectively lead to new or additional network investments. Moreover, price increases due to tolls will be mainly felt by consumers and such tolls are (potentially) in conflict with the European Net Neutrality Regulation (see our earlier blog on that subject). The interests of consumers – and not telecom parties – should come first, the Ministry said.

In recent years, the ACM has commented on competition and telecoms supervision of 5G-related issues in several papers and studies. In its paper “5G and the Netherlands Authority for Consumer and Markets“ of 12 December 2018, the ACM already took the position that R&D cooperation and mobile infrastructure sharing can be pro-competitive, provided that innovation and competition are not unnecessarily restricted. The ACM also states that the Net Neutrality Regulation provides ample room for the implementation of new 5G technologies. Furthermore, the ACM says it is aware of a possible increase in applications around number issuance and increasing complexity of mobile subscriptions for consumers.

With the increase in 5G applications, the ACM also expects an increase in demand for locations to erect antennas for mobile networks. However, in its July 2022 market review, the ACM concluded that it did not see any market-wide risks of potential scarcity in the supply of antenna sites. The ACM takes into account the expansion of the possibilities for shared use in the Dutch Telecommunications Act (“Tw”) and emphasises that reasonable requests for shared use must be granted. The ACM sees its dispute settlement powers as a means of dealing with any issues that could arise during such requests.


Freeing up frequency space

In the meantime, Dutch authorities are working on freeing up more frequency space for 5G. Already back in 2021, the Dutch Minister of Economic Affairs and Climate Policy (“Minister”) decided to amend the National Frequency Plan 2014 (“NFP”) to free up the 3.5 GHz band for the development of the 5G network from 1 September 2022 onwards. Satellite provider Inmarsat – which (until recently) made use of this frequency band – filed a preliminary injunction. The Rotterdam District Court ruled on 30 June 2021 that the Minister’s decision had been negligently prepared by failing to take into account the importance of undisturbed continuation of the emergency, urgent and safety communications (“EUS communications”) that Inmarsat secures via its ground station in Burum. The interim relief judge deemed it advisable for the Minister to first enter into consultations with Inmarsat and other parties to reach a solution that safeguards the continuance of EUS communications, and therefore suspended the amendment of the NFP.

Taking this ruling into account, the Minister published a temporary amendment to the NFP on 23 February 2023, in which the 3.5 GHz band was earmarked for both fixed satellite links and national mobile communications (also known as dual use). This decision was appealed by several parties for different reasons. According to MNOs VodafoneZiggo, Odido, KPN, as well as local parties such as Schiphol Airport, Port of Rotterdam and Europe Container Terminals, the Minister’s amended policy does not provide sufficient safeguards to make large-scale investments in 5G. Some locally active companies such as Venus & Mercury, Greenet Network (provider of private mobile networks) and VSC Observation (camera surveillance) also complained about the loss of protection for existing licence holders of (private) business networks and camera networks. They also argued that the auction policy favours larger parties and MNOs in particular. In a parliamentary letter dated 3 July 2023, the Minister subsequently informed the Dutch Parliament about the potential scenarios and possible further delay of the auction process, pending the appeal process.

In its ruling of 29 November 2023, the Rotterdam District Court dismissed all appeals. The court stated that the Minister enjoys a wide degree of discretion when determining the efficient use of frequency space. According to the court, the Minister did in fact prepare the decision carefully and gave sufficient reasons for his considerations.

After a consultation in the third quarter of 2023, a new decision amending the NFP was finally published on 8 January 2024, thereby permanently removing fixed satellite links for EUS communications on the 3.5 GHz band from 1 February 2024. As of 1 February 2024, Inmarsat’s operations have moved from Burum to Greece.


Frequency auction

After years of delay, the now vacant frequency space will soon be auctioned off by the Dutch Authority for Digital Infrastructure (“RDI”), formerly known as the ‘Telecom Agency’ (Agentschap Telecom). In the Auction Regulation of 14 February 2024, the Minister published the rules regarding the set-up and conditions of the auction and the minimum prices. The Auction Regulation provides that participating market parties can control a maximum of 40% of the total available frequencies. With this cap, the Ministry aims to maintain effective competition as at least three parties will be able to acquire frequency space. The proposed reserve prices for the licences, i.e. starting prices in the auction, total around € 170 million.

In practical terms, the licences will be distributed through a multi-round auction. In the primary phase, the total number of licences will be distributed among the auction participants. In doing so, three 60 MHz licences will be auctioned first (at a reserve price of € 39.22 million each), followed by (in principle) twelve 10 MHz licences (at a reserve price of € 4.36 million each). In the subsequent allocation phase, the ‘winning’ parties can express their preferences about placement within the spectrum band and, accordingly, it will be determined which part of the frequency space will go to which party. After the auction, the Minister will announce the winning parties and publish the entire bidding process.

Registrations for the frequency auction closed on 13 March. The RDI is currently assessing the registrations of the telecom companies. The intention is to start the auction this summer so that the auctioned frequencies can be put into use from August.

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General deregulation of local access

In addition to 5G developments, the (re)regulation of (access to) fixed networks has also been high on the ACM’s agenda recently. After the CBb annulled the ACM’s 2018 Market analysis decision on Wholesale Fixed Access (“WFA”) in 2020, the ACM launched a new market analysis. According to the CBb, the ACM had not sufficiently substantiated that KPN and VodafoneZiggo possessed joint significant market power (“SMP”). As a result of the annulment, the obligations for KPN and VodafoneZiggo to meet reasonable requests for providing access ceased to have effect. The ACM subsequently launched a new investigation to assess whether (re)regulation of access is necessary on the basis of the Tw and/or the Dutch Competition Act (“Mw”).

After the 2022 KPN/Glaspoort Commitment Decision, the ACM published its new market analysis decision for access to the local loop in late 2023, in which it concludes that it sees no need for additional regulation. This is most likely also related to the new possibility to submit a specific access request to the ACM as referred to in Article 6.3 Tw (based on the European Telecom Code). Indeed, in December 2023, the ACM published its first decisions based on this new power in response to an access request by YouCa. These three decisions will be discussed consecutively.


KPN/Glaspoort commitment decision

Alongside its investigation into the general regulation of local access, the ACM investigated the access conditions of KPN and joint venture Glaspoort on the wholesale market under Article 24 Mw/102 TFEU. According to the ACM, they potentially abused their dominant position on the wholesale market for local access (ODF, MDF and VULA) to their copper and fibre-optic networks by not ensuring (effective) access to parties like Odido. On 25 August 2022, the ACM declared the commitments offered by KPN and Glaspoort to be binding. KPN and Glaspoort committed to offer alternative providers local access (VULA, ODF and ‘WBT local’) to their existing and new fibre-optic networks under improved (tariff) conditions until 2030. An overview of the specific conditions and tariffs can be found here. In view of the increasing fibre-optic coverage and migration offerings of the parties, the ACM does not consider it necessary to require commitments in respect of the copper network.

Interestingly, whereas in the WFA-decision the ACM assumed a single broad wholesale market for both (virtual) unbundled access and wholesale broadband access (“WBA”), the ACM now considers that central access forms such as WBA and wholesale multiplay (“WMP”) are insufficient substitutes for forms of access to the local loop. For parties that have already invested in rolling out backbone and equipment to local fibre-optic exchanges, for example, the provision of WBA or WMP is not an alternative. The ACM stresses that the market for local access should be the centre of competition, as (alternative) providers can exercise control over internet speed, retail price and other product characteristics instead of merely acting as a reseller.


Market analysis local access

Upon publication of the Commitment Decision, the ACM already announced that it saw no reason to additionally regulate the behaviour of KPN and Glaspoort through a market analysis for the time being. After an extensive consultation, the ACM published its new ‘Market analysis decision for access to the local loop‘ in December 2023, confirming its earlier intention.

In addition to the market for business network services (which we will not discuss here), the ACM assumes in the decision the retail market for internet access delivered over a fixed connection (i.e. copper, fibre-optic and cable networks). Based on the network coverage in the various PC-6 postal code areas, the ACM identifies five different relevant markets, namely:

  1. KPN/Glaspoort fibre-optic network;
  2. Third-party fibre-optic network – urban (with both cable and copper as alternatives);
  3. Third-party fibre-optic network – outlying areas (with copper as only alternative);
  4. Cable network (with copper as only alternative); and
  5. Copper network KPN (without alternative).

The ACM concludes that there is no risk of SMP for one or more parties in any of these relevant markets. In the areas where KPN/Glaspoort has rolled out a fibre-optic network (market 1), the ACM finds that the commitment decision provides sufficient safeguards for local access. Where third parties such as Delta Fiber and Open Dutch Fiber have rolled out their fibre networks (markets 2 and 3), these also provide wholesale access and, according to the ACM, alternative providers can compete effectively on the retail market. In areas where there is only a cable network (market 4) or a copper and cable network (market 5), the ACM foresees that any potential risks will be mitigated by the planned fibre-optic rollout in those areas, thus tending towards the (non-problematic) competitive situation as in markets 1 and 2. Although VodafoneZiggo has a solid position in market 4 and there are indications that point to the existence of a less competitive market, the ACM expects that, by the end of 2025, the Netherlands will be almost fully covered with one or more fibre-optic networks. This will rapidly reduce VodafoneZiggo’s market share in these areas, the ACM said.

As the ACM deems the retail market “effectively competitive” in view of the above, there is no risk of SMP and the ACM sees no reason to further regulate local access to any of the networks. The ACM does however indicate that it will continue to closely monitor both the retail and wholesale markets.

As to the market for fixed and mobile call termination, the ACM recently announced that it does see reason to maintain the current regulatory regime. In its recent draft decision, the ACM concludes that there is (still) a risk of SMP for call termination providers that have both separate fixed and mobile networks. It therefore proposes that the existing access and transparency obligations will continue to apply to KPN, Odido and VodafoneZiggo. An additional tariff obligation is proposed for KPN. For all other operators, the ACM  intends to withdraw the obligations. Interested parties can submit their views (digitally) until 8 April 2024.


Access requests based on Article 6.3 Tw

During the same period of the market analysis investigation, the ACM dealt with YouCa’s request for so-called symmetrical access to VodafoneZiggo’s cable network in Amsterdam based on Article 6.3 Tw. In our earlier blog, we already discussed this relatively new power of the ACM to impose access obligations in case of barriers to replication, in accordance with the European Telecom Code.

The ACM published two separate decisions for the two different bases provided by Article 6.3 first and third paragraph Tw. With regard to Article 6.3 first paragraph Tw, the ACM can order access based on a reasonable request for access to facilities inside buildings or the first concentration or distribution point (“FCP”) outside a building. Although YouCa actually needs the requested network access, has made real attempts to obtain access on a voluntary basis through negotiations, and replication by YouCa itself is economically inefficient, the ACM concludes that it is disproportionate to oblige VodafoneZiggo to provide access. This is mainly due to the fact that within VodafoneZiggo’s network, the street cabinets (or multitap) should be considered as the FCP. With the street cabinets not allowing for access facilities, VodafoneZiggo would have to expand the current sites. Not only does this bring about significant costs for VodafoneZiggo, it also seems unrealistic for YouCa to get access at the multitap sites. Thus, the ACM rejects YouCa’s request for access on the basis of Article 6.3 first paragraph Tw.

With regard to article 6.3 third paragraph Tw, access to a higher point in the network can be enforced, but only if there are high and non-transitory entry barriers that significantly limit competition in the retail (consumer) market. Following the new market analysis decision for access to the local loop, in which the ACM did not identify any risk of SMP, the ACM finds that there is (also) sufficient effective competition in the Amsterdam region. A relevant factor in that context is that KPN and Open Dutch Fiber have concluded a covenant with the municipality of Amsterdam to significantly accelerate the roll-out of fibre-optic networks in Amsterdam. Based on this prospective analysis, the ACM concludes that the market in Amsterdam is (or at least: will become) effectively competitive soon, so that there is no basis for imposing obligations on the basis of Article 6.3(3) Tw. In the end, YouCa will thus not get access to VodafoneZiggo’s cable network.

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With the KPN/Glaspoort commitment decision and the ACM’s new powers to impose symmetric obligations to meet reasonable requests for providing access, the need for general ex ante regulation of local access on the basis of a market analysis decision seems to have faded. However, the question arises whether the ACM’s review of these individual access requests is too strict by linking the competitive situation to its market analysis. After all, the ACM has already decided that it sees no risk of SMP due to the increase of fibre-optic coverage, and established that there is (or at least: will be) effective competition on a wholesale level. This will render it difficult for third party providers to argue that individual access is necessary to maintain effective competition on the market.

2024 is nevertheless expected to mainly revolve around 5G. The upcoming frequency auction will reveal which parties manage to secure a spot on the spectrum, and whether the new mobile networks will be subject to a truly competitive playing field in the coming years.