• The European Commission is proposing to relax the regulation on incumbent national fixed network operators
• Deregulation of wholesale fixed access services would be a ‘backwards step’, state competitive operators 
• Vodafone, Iliad, Colt, Bouygues Telecom and 1&1 are among those calling for the preservation of the current model

A group of major European fibre and broadband network operators, including Vodafone and Iliad, has called the European Commission’s proposals for the deregulation of wholesale fixed network services as a “backwards step” that would “lead to re-monopolisation and stifle competition and investment in fixed connectivity services, particularly during the migration from copper to fibre,” and has called for a rethink by lawmakers. 

The heads of the nine operators – Bouygues Telecom, Colt Technology Services, Eurofiber, Fastweb+Vodafone, Iliad Group, Open Fiber, Three Group, 1&1 AG and Vodafone Group – that collectively operate fixed networks serving about 240 million customers across the European Union’s 27 member states, have signed an open statement. In it, they argue that any such move, proposed as part of the EC’s Digital Networks Act, would lessen the investment case for competitive fixed network investments in Europe, suppress future take up of services by consumers and businesses, inhibit network innovation, and make it more challenging for the EC to achieve its Digital Decade 2030 targets.

The companies express alarm that the European Commission is proposing to relax regulation on former fixed monopolies and argue that the commission’s proposals are a backwards step. The statement notes that the deregulation of wholesale access would lead to re-monopolisation, stifling competition and investment in fixed connectivity services, particularly during the migration from copper to fibre.

The operators argue that the market conditions impacting fixed network operators are different to those impacting mobile operators. “In contrast to mobile, fixed access, including ducts and poles, remains a de facto natural monopoly across much of the EU and is impossible to fully replicate. To serve European businesses and enterprises, operators must also offer connectivity at a variety of urban and rural sites. Given that only incumbent operators have nationwide coverage, wholesale access remains key. It is, therefore, alarming that the European Commission is now proposing to relax regulation on former fixed monopolies,” note the telcos.

They want the EC to preserve current regulations, which remain “essential for wholesale local access” and “wholesale dedicated capacity for business connectivity… including dark fibre access.” In addition, the EC must ensure ongoing access to physical infrastructure, including ducts and poles, as in many EU member states, “this infrastructure is still largely controlled by a single operator, creating a de facto monopoly.” 

The European Competitive Telecommunications Association (ECTA) has also stepped into the fray by publishing a joint statement with other European industry groups, including Breko, the German broadband operators’ association, that accuses the EC of basing its “disruptive proposals concerning access regulation” on “incorrect and problematic premises” related to how the region’s fibre access market is developing and the potential impact of associated regulations, particularly the Gigabit Infrastructure Act.

ECTA and its partners state that “the downgrade put forward by the European Commission entails serious risks of dismantling the carefully balanced framework that supports wholesale access, competition and technological progress – jeopardising the development of next-generation services, such as cloud and edge computing, 6G and AI, and jeopardising investors’ confidence, creating uncertainty and increasing risk.” The ECTA statement is lengthy and detailed and can be viewed here. 

The message is clear, though – competitive fixed network operators in the European Union are concerned that the Digital Networks Act could hand even greater market power to the likes of Deutsche Telekom, Orange and Telefónica and make it harder and more expensive for them to build alternative fixed network infrastructure in EU markets at a time when Europe is collectively trying to present itself as a competitive digital market. 

The European Commission is taking feedback on its Digital Networks Act proposals until the end of the day on 11 July.  

- Ray Le Maistre, Editorial Director, TelecomTV