The CNMC approves the regulation of the fiber optic wholesale markets
Oct 18, 2021
- In a total of 696 municipalities, (they make up 70% of the Spanish population), Telefónica will be exempt from offering its competitors wholesale access services to its optical fiber.
- In the rest of the municipalities, where there is less competition between operators, wholesale access obligations continue.
- Telefónica will have to guarantee, throughout the national territory, that other companies can access its civil works infrastructure (conduits, conduits and poles) to carry out their fiber optic deployments.
- Within three years, the CNMC will assess whether it is necessary to review the areas considered "uncompetitive" or even withdraw the regulation of wholesale access to fiber throughout the territory.
The CNMC has approved the definitive regulation of the wholesale broadband access markets (Markets 1/2020 and 3b / 2014). The Commission seeks a balance between guaranteeing competition and promoting investment in new generation networks (NGA), those that allow very high-speed Internet connections , mainly fiber optics .
The new measure, which establishes differentiated obligations based on existing competition, updates the 2016 regulation. Since then, the number of fiber connections to the home (FTTH) in Spain has gone from 3.1 million in 2015 to almost 12 million in 2020 ( CNMCData ). In other words, if in 2015 fiber lines to the home (FTTH) represented 23% of the market, they are currently the predominant technology with about 75% of total broadband connections . These figures place Spain as one of the leading European countries in both coverage and penetration of FTTH fiber connections.
New regulation: zones and municipalities
As a consequence of the competitive dynamics observed since the previous regulation in 2016, the CNMC has expanded the competitive zone to 696 municipalities (compared to 66 in 2016). The rest of the municipalities (7,453 municipalities) will be part of the non-competitive zone.
The competitive area is characterized by high competition in infrastructure based on next generation networks (NGA). In each of these 696 municipalities, Telefónica's share in the broadband retail market is less than 50% and there are at least three networks (NGA) with a minimum coverage of 20%.
In this competitive area, the CNMC establishes that Telefónica maintains its obligations of access to the civil works infrastructure (conduits, conduits and poles) , as well as the obligations of unbundled access to the copper pair. However, it does not impose wholesale access obligations on its fiber network .
Access to civil infrastructure is essential in any fiber optic deployment, since it allows alternative operators to use the conduits and poles of the Telefónica network, and to make their runs from Telefónica's head exchanges to the homes of end users .
The unbundled access to the copper pair , on the other hand, is a wholesale physical access to the traditional copper access network, which is provided at the local exchange level.
The decision taken by the CNMC implies significant deregulation. In this way, the competitive zone will go from 66 municipalities (35% of the Spanish population) to 696 municipalities (70% of the population). At the end of 2020, more than 75% of the fiber accesses installed by Telefónica were located in those 696 municipalities, where with the new regulation, Telefónica will only be obliged to allow access to its civil works infrastructure.
The deregulation of these 696 municipalities will not be applied immediately, as a transitional period of 6 months is set, from the publication of the CNMC resolution in the Official State Gazette.
In the rest of the territory (7,453 municipalities), a non-competitive area, the CNMC establishes, in addition to the above services, the imposition on Telefónica to provide wholesale services of virtual unbundled access to fiber optics (local NEBA) and NEBA broadband fiber.
Differences by type of access
The difference between NEBA local and NEBA fiber is the proximity to the end customer. The local NEBA is provided in the local fiber network head exchanges, while the connection point of the wholesaler NEBA fiber service is further from the customer (there is one connection point per province).
In addition to these services, in the 7,453 municipalities, Telefónica is also required to provide indirect access services over copper called NEBA copper, and regional and national ADSL IP .
To facilitate the definitive migration from copper to fiber services, the measure contemplates a reduction from 5 to 2 years in the period regulated for the closure of Telefónica's copper exchanges.
Evolution of the situation
Likewise, the CNMC will closely monitor the competitive situation of the market and assess whether it is necessary to adopt within a period of 3 years a new measure in which the geographic areas of the market are reviewed or, even, if the competitive situation of the market justifies it, move to a framework in which regulated access to Telefónica's civil infrastructure was imposed exclusively and the obligations on local NEBA and NEBA fiber services were withdrawn throughout the territory.
This measure has the approval of the European Commission, which is in charge of supervising the market analysis and regulatory obligations that regulators must notify in accordance with community regulations. In its analysis, the European Commission makes a single comment, of a technical nature, encouraging the CNMC to define a separate market for access to civil infrastructure in the framework of the upcoming reviews.
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