In March 2013, the Danish Government launched a plan entitled "Better broadband and mobile coverage throughout Denmark". One of the plan’s objectives is the improvement of competitive conditions in the fixed broadband market.
A major concern is the present structure of the Danish broadband market, which is dominated by TDC. The problems root in the fact that TDC is integrated across all three platforms (copper, cable TV and fibre network) and across all services (broadband, voice, television).
The investigation goes beyond the market reviews conducted by the Danish Business Authority (DBA), which identify specific competition problems related to Significant Market Power ("SMP") in wholesale markets and which lead to the imposition of a comprehensive set of access remedies.
In May 2014 DBA asked WIK-Consult to assess the structure of the Danish fixed broadband market and its implications for the competitive situation. In this respect, DBA asked WIK-Consult to analyse certain topics regarding vertical integration, horizontal integration and specific issues regarding fiber networks. Furthermore, DBA asked WIK-Consult to identify options – that go beyond the sector-specific regulation of competition – for solving the competition problems caused by the structure of the fixed broadband market.
In July 2014 WIK-Consult provided the DBA with a study regarding the analysis of the Danish fixed broadband market. Based on positive experience in other countries WIK-Consult identified the following options for further assessment:
- Municipalities could further facilitate the roll-out of passive infrastructure, notably ducts, and provide access to ducts of public utilities under their ownership;
- DBA (or another competent authority, as appropriate in Denmark) could impose symmetrical regulation of fibre terminating segments involving access to co-investment in, and rental of, such segments;
- Utility companies that have invested in and operate fibre networks could offer access on commercial terms;
- TDC could functionally separate its local access network and provide wholesale services on an "Equivalence of Input" basis; and
- TDC could divest its cable assets.
Only two options can be mandated and therefore be regarded as genuine policy options: The first option is giving a greater role to municipalities in fostering digital infrastructure readiness. The second option is imposing symmetric FTTH terminating segment network sharing.
The other options considered lack a legal foundation and therefore cannot be imposed on a mandatory basis. They become relevant if they make commercial sense to the relevant operators, respectively company shareholders. This applies in relation to access to fibre networks, but also to functional separation (unless imposed through SMP regulation, which was not considered) and divestiture of cable assets of TDC.
The study was published by the DBA on December 9th 2014 and is available for download.
