POSITION PAPER OF THE NETHERLANDS ON THE REVIEW OF THE REGULATORY
FRAMEWORK FOR ELECTRONIC COMMUNICATIONS NETWORKS AND SERVICES

General objectives and principles
Digital infrastructure has become a prerequisite for the performance and competiveness of
Europe’s economy due to the ongoing process of digitisation. The current regulatory
framework for electronic communication networks and services has helped to foster
competition, create an internal market and protect end users. A modernised framework will
need to address many developments. Demand for reliable high capacity connections,
anytime and anywhere, is growing rapidly. Fixed and mobile services converge as users
expect services to work seamlessly on both networks. Telecom companies facing huge
investments consolidate in search of economies of scale. New services and service providers
are changing competitive dynamics of traditional markets. These ongoing technological and
economic developments make it a huge challenge to keep the framework future-proof.
The revision of the framework will benefit from agreement on a clear overarching objective.
In our view, this objective should be to realise reliable, high capacity connectivity for
citizens and companies, for objects and devices – in the most efficient way – while
protecting the rights of the connectivity users. Without efficient fixed and mobile
infrastructures to provide connectivity, there is no Digital Single Market in which citizens,
companies and governments communicate, trade and interact. This objective should also
set the direction for regulatory measures to promote competition.
From this overarching objective we derive four underpinning principles. We want to see a
framework that:
1.

2.

3.

4.

Supports investment and innovation in networks and services. This calls for improving
regulatory certainty (e.g. of access regulation) and predictability (e.g. of the timing and
duration of spectrum awards) and flexibility to adjust incentives for investment to local
circumstances. It also calls for removing any unnecessary regulatory burden (e.g. when
end user rights are sufficiently protected by generic rules).
Promotes fair and dynamic competition between and on networks, and between
communication services using these networks. This means preserving market dynamics
created by access regulation over the past years, and adapting to new market dynamics
resulting from new services, convergence and consolidation.
Protects the rights of end users of communication services, whether these are provided
by traditional or by new companies. Empowering end users will give them an important
role in creating and maintaining the right market dynamics.
Strikes the right balance between harmonisation of rules and space for tailor-made
solutions. Whereas harmonisation contributes to regulatory certainty and lower costs of
cross border operations, space for tailor-made solutions is necessary to accommodate
national circumstances, safeguard efficiency and set the right incentives for investment
and competition. The framework should provide for regulatory options in order to make
it work for all member states, for instance in the case of access regulation. It will also
need to leave certain competences at national level, for instance when it comes to
spectrum auction design and defining the scope of the universal service obligation. In
those cases more subtle and bottom-up approaches should be found to coordinate and
improve policy. Organisations of national authorities like the Body of European
regulators of Electronic Communications (BEREC) and the Radio Spectrum Policy Group
(RSPG) will play an important role in this.

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Network Access Regulation
An important cornerstone of the regulatory framework is the ex-ante network access
regime. National regulatory authorities decide on appropriate access regulation on the basis
of a prospective analysis of relevant markets and the identification of market parties with
Significant Market Power (SMP). The SMP-model has enabled market entry and has
stimulated competition over the past decade, ensuring the delivery of electronic
communication services for better prices and quality to both citizens and companies.
Moreover, by enabling market entry and competition, the SMP model has been an important
driver for investments in both fixed and mobile services and infrastructure.
The SMP-model is built on the notion that new entrants benefit from regulated access to the
fixed infrastructure and climb the ‘ladder of investment’. These competitors would in time
become ‘full’ infrastructure competitors independent of regulated access. By then ex-post
competition law would be sufficient to maintain effective competition between the
infrastructure competitors, and ex-ante access obligations could be lifted. This blueprint for
establishing effective competition in the telecoms markets has worked out differently in
different Member States, depending on economic, social and political factors, regulatory
choices and – foremost – by different infrastructural starting points. In some areas
infrastructure competition has emerged, or might still emerge, as a result of regulated
access. In other areas infrastructure competition between fixed networks will be more
difficult to establish due to low population density. In these areas infrastructure might be
characterised by a natural monopoly. Finally, some areas have seen infrastructure
competition arise only thanks to the convergence of cable networks and telecommunications
networks. One of the challenges of this review is to make the framework fit for providing
solutions for all these situations. Regulatory intervention should ensure access to the inputs
that allow operators to deploy NGA networks and compete effectively on a regional, national
or European level. As operators may be active in several geographical areas, it will be
important to recognize that intervention in one area might influence competition in other
areas.
Proposed changes in the SMP-model
The SMP-model seems suitable to address competition problems in (regions within) member
states with one ubiquitous network, and no indication of infrastructure competition
emerging. The Netherlands proposes a number of changes to simplify the SMP-model and
make it more effective and efficient.
First of all, the regulatory period for static markets like the fixed and mobile call termination
markets - where each operator is designated as having SMP on its own network - could be
extended. From a harmonisation perspective, the European Commission could even consider
a separate regulation as an appropriate tool for these markets.
Secondly, a decision on the imposition, maintenance and withdrawal of wholesale
obligations should be based on the assessment of competition in the relevant retail market.
The Framework Directive (article 16) links this decision to the market analysis of the
relevant (wholesale) market. However, the ultimate aim of regulatory intervention is to
create competitive retail markets. This principle should be more clearly established in the
framework. This would simplify the framework and make it more efficient, as a separate
analysis of the (hypothetical) wholesale market will no longer be necessary.
Thirdly, the focus on retail competition problems should be combined with more flexibility
towards appropriate remedies. The approach taken in the current framework is to analyse

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and regulate the wholesale market most upstream from the retail market. The level of
access regulation should be more explicitly based on the competition problems observed in
the retail market. This would make the framework more effective and also better equipped
to deal with unexpected access demand, for instance caused by the virtualisation of
communication networks.
Fourthly, a more flexible approach towards access remedies is needed to ensure technology
neutrality in the future framework. This principle is becoming increasingly important in a
time where different network technologies are used to provide comparable retail services
(cable networks, copper networks, fibre networks and possibly also wireless networks).
However, the fixed network topology of the telecom incumbents is still the starting point
when it comes to (wholesale) market definition and access regulation. The future framework
should be flexible enough to deal with the technological difference between the network
operators, and if necessary impose remedies on different network access levels.
Finally, the European Commission raises the question of whether National Regulatory
Authorities (NRA’s) should have the possibility to address bottlenecks in relation to other
inputs, for instance access to content, if these are considered to be decisive for the
development of the retail market. Differentiation in (exclusive) content could enhance
competitive dynamics in the market and is not necessarily anti-competitive. However, in
light of the growing importance of content in competition between providers of electronic
communication networks and services, it is appropriate for the European Commission to
assess this development and carefully consider if it is necessary to include content within
the scope of the framework.
The need for a symmetrical regulatory model
The changes proposed above would make the framework better equipped for dealing with
cases of joint dominance, although the legislative text could still provide more guidance on
this to NRA’s. However, they do not provide a suitable answer to the most prominent
challenge the Netherlands faces: a duopolistic market structure in fixed access networks
(incumbent and cable) that also has implications for mobile markets. In this market
structure long term competition concerns arise even if there is no clear case of joint
dominance.
Access to fixed networks is an important input for maintaining competitive dynamics in a
fixed/mobile connectivity market. Consumers, business and increasingly devices, require
access to both fixed and wireless high-speed networks. Fixed-mobile convergence will
accelerate and, indeed, be business-as-usual by the time the review of the framework is
finalised. This leaves both fixed and mobile operators dependent on access to their
respective networks in order to compete effectively with each other. However, in doing so
they face different conditions. In the mobile market a Mobile Virtual Network Operator
(MVNO) wholesale market has emerged as a result of competition. Also, market entry can
be established, if needed, through spectrum licences. In the fixed network market no
wholesale market has emerged on commercial grounds and network economics prevent
market entry at the level of the access networks. This gives fixed network operators a
significant strategic advantage over their mobile competitors. They can obtain mobile
inputs, while mobile operators are dependent on access regulation to obtain fixed inputs.
However, access regulation is uncertain in a duopolistic market structure. Regulatory
certainty and predictability of access to fixed networks is needed to maintain investment
incentives for mobile network operators.

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Access to fixed networks for other network operators is also important to ensure future
investment in fixed infrastructure. Over the past decade, regulated access in the
Netherlands has proven that competitors on the network provide important investment
incentives for network upgrades. ‘Full’ infrastructure competitors may push each other
towards more investment, but can also be inclined to compete less and price above the
competitive level. Less competition on quality (product innovations, capacities and
broadband penetration) and (relatively) higher prices would lead to consumer harm.
Towards a more market-based approach
For these reasons the Netherlands proposes to introduce a complementary regulatory
model, in order to maintain competitive dynamics and investment incentives in a duopoly.
This model comprises of an ex-ante symmetrical access regime that would co-exist with the
SMP model and apply to at least fixed networks. Whether it would also need to apply to
mobile networks should be carefully considered in light of the existing MVNO-market and
the possibilities spectrum licensing offers. A complementary (or parallel) regime means that
specific ex-ante access obligations will - simultaneously - still be possible under the
framework, in markets with a case of individual or joint SMP.
In markets with no clear case of individual or joint SMP, more leeway can be given to
market dynamics. However, this should not imply deregulation or relying on ex-post
competition law to deal with access regulation. Intervention under competition law (article
201 TFEU) will not suffice because it is also based on the existence of single or joint
dominance. Ex-ante, but more market-based, provisions are necessary, accompanied by
regulatory provisions for lowering switching barriers.
The basis for such a more market-based model would be a general obligation for (at least
fixed) network operators to negotiate on access arrangements with other fixed or mobile
network operators. Operators would have the obligation to meet reasonable requests for
access to their network under fair and reasonable terms and conditions. NRA’s would have a
dispute settlement competence and take binding decisions to resolve any disputes taking
full account of the principle of proportionality (for instance, if access is unjustifiably refused
or only offered on unreasonable conditions). More leeway for market dynamics means a
shift in the role the NRA’s will play. Instead of deciding on access obligations well in advance
they would only intervene if problems arise in negotiations on access arrangements. Setting
clear policy objectives in the framework would provide NRA’s with means for dispute
settlement.
Comparable symmetric obligations are already in place under European law. For instance in
the provisions on co-location and sharing of network elements and associated facilities in
the Framework Directive, or in article 3 of the Broadband Cost Reduction Directive. These
obligations apply irrespective of the existence of SMP.
The proposed complementary regulatory model combines market-based incentives for
competition and investment with an additional option of regulatory intervention. We believe
this addition is necessary to face the challenges that different market structures pose for
member states. As it is equipped to deal with technological innovations in network access
and unexpected access demand, it would also help to make the regulatory framework
future-proof.

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Spectrum management and wireless connectivity
Harmonisation of the use of spectrum
Due to new users, devices and applications wireless data traffic is increasing rapidly.
According to the Radio Spectrum Policy Programme every effort should be made to identify
at least 1200 MHz of suitable spectrum by 2015. This figure has now been reached. Further
demand for spectrum will depend on population density and user behaviour and will vary
between member states. Therefore, we do not favour setting a new target for the amount
of spectrum to be made available.
We support technical harmonisation of the conditions for using a spectrum band.
Harmonisation of the use of additional spectrum should be done on a case by case basis and
is only called for in the following circumstances:
•
If the development of equipment for new services operating in a spectrum band relies
on the creation of a European-wide market (economies of scale);
•
If a lack of coordination in reallocation of the band could seriously limit the possibility
of deployment of wireless broadband in a country if the neighbouring country
continues to operate another application (Cross-border issues);
•
If telecoms services that are provided EU-wide rely on the availability of a frequency
band across Europe (EU-wide telecom services).
Most importantly, a scarce resource like spectrum will need to be used efficiently. Since not
all frequency bands allocated to mobile broadband need to be available in all member states
flexibility needs to be provided to deal with differences in market demand. When the
amount of harmonised spectrum is more than the demand for spectrum for electronic
communication services, part of that harmonised spectrum should be allowed to be made
available for other purposes. This will prevent spectrum from being left unused. Flexibility
can be provided for instance by allowing private use or governmental use.
In general, spectrum policy will have to rely more and more on the shared use of bands due
to a more intensive usage of the spectrum by various sectors. This will optimise efficient use
of a frequency band based on local circumstances. This is not a new approach; several
examples exist where the use of spectrum is shared in time or in confined geographical
areas. New technologies (sensing, geo-databases) can be used to optimise possibilities for
sharing. Spectrum sharing will tend to become the norm in the years ahead and national
trials and efforts are expected to increase in size and number.
The efforts made by Member States to ensure a proper implementation of new sharing
approaches should be recognised and encouraged as a possible voluntary regulatory
approach based on a common legal framework. Best practices of sharing should be actively
stimulated. The new regulatory framework should recognise that sharing possibilities are
not to be defined at an EU level but are to be left to the national or local radio environment.
Harmonisation of procedures and conditions
The regulatory framework can bring about further common political objectives for spectrum
policy. Member States are best equipped to decide how these translate into the design of
the spectrum award process. This depends to a large extent on specific national objectives,
e.g. creating more competition in the mobile market, enhancing coverage in rural areas or
improving efficient use of spectrum. National objectives may differ due to differences in
national circumstances and preferences. The design of an auction and the conditions under
which spectrum is licensed may therefore differ between member states.

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In order to enhance predictability for market operators, various mechanisms (each designed
for a specific circumstance) could be set out in a “toolbox” of policy options, from which
spectrum authorities can choose. Of course, it is important that Member States are
transparent and involve stakeholders in the decision making process.
In addition, predictability could be enhanced if Member States would be mandated to
periodically publish a long term strategy of spectrum policy and awards. Such a strategy
should include spectrum bands to be awarded, timing of the award procedure and duration
of the licences.
In order to further harmonize spectrum policy we are in favour of sharing best practises and
performing friendly peer reviews. Members of the Radio Spectrum Policy Group (RSPG) have
a broad expertise in designing award processes and could be tasked with defining best
practices. The RSPG could also play a role in performing peer reviews of intended spectrum
award designs of Member States. This could best take the form of an input to the normal
public consultation process.

Standardization and interoperability of DAB(+) and DOCSIS
The encouragement of standards by the European Commission would play a positive role in
the creation of economies of scale which would in turn create benefits for European
businesses and consumers. The Framework Directive provides options for the Commission
to stimulate the harmonisation of standards across Europe. This opportunity should be used.
For instance when it comes to ensuring interoperability of radio devices across Europe. With
regard to digital terrestrial radio, DAB and DAB+ are already the ‘de facto’ standards in
Europe. These need to become more widespread. Ideally, provisions are also made to
promote the inclusion of both analogue (FM) and digital (DAB / DAB+) capability in all new
radio receivers (automotive and domestic) in Europe. This will ensure the interoperability of
receivers across Europe – especially as Member States start to switch-off FM signals.
With regard to the development of DOCSIS cable standards, the Netherlands would like to
stress the important role the European Commission and NRA’s play in the process of
incentivising suppliers and operators of the DOCSIS community to develop a standard
allowing Virtual Unbundled Local Access. As the European Commission points out in its
decision on the notification of the wholesale local access market (NL/2015/1794), technical
considerations do not appear to be the main obstacle to offering local access products on
cable networks, but rather economic and strategic considerations. The European
Commission points out the possible role of NRA’s in incentivising suppliers and operators in
developing an open standard. The Netherlands invites the European Commission to consider
how the review could facilitate such a role of NRA’s, and how the European Commission
itself could incentivise the DOCSIS community into developing such a standard. The
question will need to be addressed of whether the current policy tools of the European
Commission provide a sufficient solution or whether the framework needs additional
provisions.

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The Universal Service Regime
The universal service regime is still needed as a safety net, to ensure that a minimum set of
electronic communication services is made available to all end users at an affordable price
at a fixed location. It should allow flexibility to cope with different national situations; for
example to withdraw obligations when services are satisfactorily delivered by the market or
have become obsolete. The universal service regime should also be technology-neutral.
The current scope of the universal service, targeted at the provision of a connection to an
electronic communications network at a fixed location, is adequate. The provision of
telephony services at a fixed location is still important and should be kept within the scope
of the universal service regime. Public payphones, directories and directory enquiry services
could however be removed from the scope of the universal service .
Due to market, technological and social developments, functional internet access has gained
more importance compared to telephony. Any universal service obligations with regard to
internet access should remain limited to the provision of a basic safety net, to avoid any
disruptive effects. The need to guarantee internet access for the sake of social and
economic inclusion should be distinguished from the objective to reach more ambitious
broadband targets. The term “functional internet access” is therefore still valid in the future
universal service regime. Other public policy tools are better suited to foster broadband
deployment in case the market fails or the outcome is unsatisfactory.
The objective of a universal service obligation for functional internet access is to ensure
social and economic inclusion. It is most appropriate to define the scope and characteristics
of functional internet access at a national level.

Sector specific regulation for communication services
Technological and commercial innovations have given rise to new players that offer
communication services that are not in the scope of the regulatory framework, such as
“Over-The-Top” services. Simply broadening the current definitions to include the variety of
services and players would not make the framework future-proof and would be too crude.
The new framework will need to be structured differently. A distinction could be made
between the regulation of the services that are offered via/over the different networks and
the regulation of the networks itself. New definitions will be necessary, such as a definition
of “communication services”. However it is important to note that even within the category
of “communication services” differences in characteristics may require differences in
regulation.
Just like traditional communication services, OTT-services may affect public interests. This
calls for a re-assessment of the regulatory framework to see if public interests are protected
sufficiently and to see if traditional communication services face an unnecessary regulatory
burden compared to newcomers. The overall objective should be to empower end-users in
the EU in order to make them a driving force for competition and innovation. Creating a
level playing field between all services can be too far-reaching, as there may be good
reasons for taking a different regulatory approach to services that have different
characteristics. The new regulatory framework should be as simple and proportionate as
possible.

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As a starting point, the Netherlands prefers general regulation over sector specific
regulation. General regulation can better encompass future developments and offers more
stability. It also offers the same level of empowerment and protection for all end-users,
regardless of the category of service that is involved: a traditional ECS or a competing OTTservice. The European Commission should look closely at where general regulations offer
sufficient protection to end-users and where specific provisions can be (partially) removed.
Examples are article 20 of the Universal Services Directive on contract requirements and
article 34 on alternative dispute resolution. They could, at least, be made leaner and refer
to the Alternative Dispute Resolution Directive (2013/11/EU) and the Directive on Consumer
Rights (2011/83/EC). Transparency for end-users on the protection of their personal data is
needed for all services, whether traditional or OTT. Once the European Data Protection
Regulation is finalised the Directive on privacy and electronic communications (2002/58/EC)
should be checked for overlap and consistency. A focused and proportionate E-privacyregulation should remain.
Sector specific regulation should be continued where a level of empowerment and protection
is needed that cannot be provided by general regulation. Sector specific provisions are
needed, at least, for switching. Increasing bundling of services may have lock-in effects for
end users. Provisions for provider switching should apply to all elements of a bundle that
contains at least one electronic communication service. Rules on the control of consumption
and contract termination in case of the tacit extension of contracts are need (the latter can
also be regulated generally).
Currently, several obligations and rights in the framework are linked to the use of telephone
numbers. We propose to evaluate if certain rights and obligations, such as the
interoperability obligations of Article 28 of the Universal Service Directive, can be linked to
certain services or specifications rather than being linked to the mere use of numbers.
The Commission should take into account the impact of specific market developments such
as OTT services and M2M on the usage of numbers. The Commission’s focus regarding
numbering should be on the availability of adequate numbers, access of emergency
services, number portability (including maximum throughput times and including the
relationship between number portability and contract duration) and the extra-territorial use
of numbers. In this context any changes to the current framework should be closely
coordinated with CEPT.
National number resources serve applications for national markets and can also – in
addition to global number resources – be used in specific cross-border situations, facilitating
e.g. M2M. National resources can be managed most efficiently at the national level, also in
the case of cross-border use. A European number range to facilitate M2M communication
should only be considered if there is a clear need for it and if industry supports it.
International management of such resources (e.g. by BEREC) may be the most viable
option.
In the future, the obligation to provide access to emergency services (112) for providers of
electronic communication services and networks could be broadened to other market
players. In principle, all emergency calls need to be identifiable (for call back). They also
need to be accompanied by accurate location information, since location information is of
increasing importance to emergency services. Minimum requirements (e.g. standards for
data formats and interfaces) are desirable for emergency apps.

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Institutional set-up and governance
BEREC plays an important role in the harmonised application of the telecommunication
framework by delivering opinions on draft measures of NRAs concerning market definition,
the designation of undertakings with significant market power and the imposition of
remedies, and by advising the Commission and individual NRA’s. In order to realise a more
harmonised application of the framework the role of BEREC should be strengthened.
This can be accomplished by giving BEREC a role in assessing the aforementioned draft
measures earlier on in the process, prior to any second phase investigation by the European
Commission. It can also be accomplished by mandating BEREC to issue guidelines on
specific subjects. A good example is set by the Telecom Single Market Regulation on net
neutrality and roaming. It stipulates that in order to contribute to the consistent application
of the Regulation, BEREC shall, after consulting stakeholders and in close cooperation with
the European Commission, issue guidelines for the implementation of the obligations of
national regulatory authorities.
According to the Framework Directive “Member States shall ensure that the goals of BEREC
of promoting greater regulatory coordination and coherence are actively supported by the
respective national regulatory authorities” and that “national regulatory authorities take
utmost account of opinions and common positions adopted by BEREC when adopting their
own decisions for their national markets” (article 3b). In case BEREC takes an opinion on
spectrum policy not all member states are represented, as spectrum management
sometimes lies outside the NRA. This situation can be improved by giving the RSPG a more
prominent and formal role in EU spectrum management issues. In the RSPG all member
states are represented by the appropriate spectrum authorities of their choice.

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