Comreg

Report
Policies and initiatives for regulating
access to FTTC and FTTH
9th May 2013
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Fibre roll out in Ireland

Eircom is rolling out FTTC to approx one million premises:

delivered over five phases; investing €400m in fibre
infrastructure across the Republic’s 26 counties.

Deployment of FTTC architecture + vectoring to deliver
speeds of 70 – 100 Mbs but negligible FTTH envisaged.

UPC has upgraded its fibre power network to DOCSIS 3.0:
 over 600,000 households capable of achieving 100 Mbs and
over 725,000 attaining 30 Mbs access.

ESB announced its intentions to roll out FTTH to urban and
semi-urban areas and is seeking a JV partner.
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The challenges for regulation in Ireland

To drive investment and yet maintain competition;
 Achieved through improved conditions of wholesale access and market
lead/flexible pricing structure and consistent pricing along value chain.
 Possible due to dynamic retail competition and by supporting alternative
investment on all platforms

Considered European Digital Agenda targets and National
Broadband Plan – ensure market lead investment with
minimal state intervention.

Minimise regulatory barriers to investment therefore support
the business case for investment by all market players.

Acknowledge reality that in the Irish market, the business
case for FTTC is stronger than for FTTH, at this point in time.

Ensure Access remedies are sufficiently flexible to allow the
market to move to an FTTH solution over time.
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ComReg’s approach
1. Technology neutral approach - safeguard for competition,
regardless of underlying technology
2. Mandated fibre access and virtual unbundled access
3. Supports continued investment in LLU and SLU
4. Recognise competitive dynamic in the retail market
 Allowing a flexible pricing structure
5. Paramount to create a level playing field:
 Ensuring equivalence of access through Equivalence of Input (EOI) for
next generation
 Consistency of pricing across the value chain
6. Incentivise improved equivalence with potential to relaxing
controls of the test in line with increasing competition.
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Checking technical and economic replicability of retail
products?

Use of margin squeeze obligation, between retail and
wholesale products and services; and between various
forms of wholesale products and services.

Specify appropriate margin squeeze models to ensure that
operators investing in networks but who rely on key input
prices are not discriminated against when compared to
those investing and may get a preferential wholesale input
price.

Ensure appropriate economic space is maintained along
value chain of regulated access products.

Ensure equivalence of access (EoI)

Objective is efficient infrastructure investment and
promotion of effective competition, at the retail and
wholesale levels
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Managing access to SLU with Vectoring

Vectoring deemed necessary for platform to compete with speeds
available on cable

First generation vectoring not compatible with SLU; implication is
continued dominance of sub-loop

Alternative demand may emerge

ComReg approach
 SLU to be available on reasonable request

Criteria
 Unreasonable if:
 FTTC/Vectoring roll out has taken place or is credibly
imminent
 No commitment to wholesale access (VUA/Bitstream)
 SLU will be available where NGA clearly not viable
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European Policy aims to drive Digital Agenda

Draft Recommendation:


“Consistent non-discrimination obligations and costing methodologies”.
Pricing flexibility should support investment where there is a
safeguard to competition
 Margin Squeeze test and economic replicability (would apply to any
future fibre unbundling)
 Strong retail competition
 Equivalence of Inputs

Predictable/stable copper prices in a band of €8-10 for LLU
provides anchor price
 Particularly relevant where there is virtual unbundling and until a fibrebased anchor is in market

Ensure consistent pricing for ladder of investment to safeguard
competition.

Supports pricing agreements which foster NGA

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