Update 20 Dec 2013: On 20 Dec 2013, the Danish Erhvervsstyrelsen (DBA) adopted a decision (available only in Danish language) supplementing its existing Market 4 decision, in which it determines the regulatory obligations relating to the vectored VDSL2 roll-out of TDC. This follows the rules for vectoring trials issued by the DBA on 16 Aug 2012 (shown below in this T-REGS article).

Update 19 Dec 2013: On 16 Dec 2013, the Austrian Telekom-Control-Kommission (TKK) adopted a decision (available only in German language) on the analysis of Market 4. Aside from confirming wholesale copper unbundling charges at €5.87/month to reflect low retail prices practiced in Austria, this decision also sets out the conditions under which A1 Telekom Austria may phase-out copper sub-loop unbundling in the context of its vectoring deployment.

Update 29 Aug 2013: Today, Decision Chamber 3 of the German regulatory authority BNetzA issued Decision BK 3d-12/131 (modifying its earlier Decision BK3g-09/085) enabling the deployment of vectored VDSL2 by Telekom Deutschland and by other operators, subject to several categories of conditions, including for the phasing-out of copper sub-loop unbundling obligations imposed on Telekom Deutschland. The conditions include, in particular, the possibility for not only Telekom Deutschland, but also for alternative operators, to be first-movers (subject to detailed criteria), and the requirement for all operators of vectored VDSL2 deployed at the street cabinet to provide Wholesale Broadband Access (bitstream access) to access seekers. The exact wording of the BNetzA decision is very extensive. Links to the BNetzA press release (in English) and to the full text of the decision (in German) are inserted below in this T-REGS article.

Update 1 Feb 2013: On 31 Jan 2013, the Irish regulatory authority ComReg issued Decision D03/13, which amends remedies on Markets 4 and 5, specifically to address Next Generation Access, and modifies the copper sub-loop unbundling obligation imposed on Eircom. The exact wording of the ComReg decision is inserted below in this T-REGS article. Accompanying text is contained in Section 4.3 of ComReg Decision D03/13 and in paragraphs 2.35-2.42 of the executive summary of the same decision.

Update 1 Dec 2012: On 28 Nov 2012, at the ECTA Regulatory Conference Breakfast Briefing entitled 'Competitive and regulatory challenges related to Vectoring', chaired by Yves Blondeel of T-REGS, representatives of Alcatel-Lucent and Huawei Technologies both indicated that co-existence of competing operators deploying vectoring on copper sub-loops is possible within their respective equipment ecosystem (i.e. using the same vendor), subject to reaching agreements with each-other. They also indicated that vectoring co-existence is not currently the subject of standardisation efforts between equipment vendors.

VDSL2 vectoring, which was approved as ITU-T G.993.5 in 2010 with amendments, is an xDSL technology evolution which boosts transmission performance on short twisted-pair copper loops or sub-loops (typically <500m from the customer’s modem).

VDSL2 vectoring is asserted by at least one equipment vendor to consistently deliver >100 Mbit/s downstream speed for all lines in a copper bundle at 350m from the customer’ modem. Several equipment vendors have recently announced actual or imminent commercial availability.

Belgacom and Alcatel Lucent announced the first large-scale customer trials in the world by end- 2012Belgacom subsequently announced that it expects its commercial VDSL2 vectoring upgrade to cost €150-200m – taking account of the fact that Belgacom has already rolled-out street cabinets and fibre backhaul to cover >80% of the Belgian population, and on 19 February 2014, Belgacom announced that it had activated vectored VDSL2 in Mechelen, kicking-off its nation-wide roll-out. Deutsche Telekom’s CEO has also hailed Belgium as having ‘approved’ vectoring in an announcement foreshadowing roll-out in Germany.

The downstream speed deemed realistically achievable for all or for a very large proportion of customers by deploying VDSL2 vectoring on short twisted-pair copper loops or sub-loops is highly relevant to the European Commission’s Digital Agenda for Europe, which includes targets of >30 Mbit/s coverage for all, and in particular the target of having 50% of EU households actually subscribing to >100 Mbit/s by 2020. The European Commission’s Digital Agenda Scoreboard shows the extent of progress being achieved towards meeting these targets.

For the past several months (indeed more than a year), the telecommunications policy and regulatory community in the EU has increasingly focused on VDSL2 vectoring on short twisted-pair copper loops or sub-loops. Regulatory proceedings and public consultations have been organised by NRAs in several EU Member States (formal exercises in Belgium, The Netherlands, Denmark, Ireland, Italy; informal exchanges occurred elsewhere), and parties to these proceedings have made their positions known.

One of the key issues in these regulatory proceedings has been the question as to whether VDSL2 vectoring, which, as it stands today, requires control over all copper lines in a copper bundle to be effective, is compatible with the key copper local loop / sub-loop unbundling obligation imposed in the EU from 31 December 2000, and whether it would be justified to phase-out (partially or totally), the copper sub-loop unbundling obligation in this context.

Under the current EU regulatory framework (as adopted in 2002 and amended in 2009), NRAs are required to assess whether network operators hold Significant Market Power (SMP) on Market 4 (Wholesale (physical) network infrastructure access (including shared or fully unbundled access) at a fixed location). To date – all NRAs in the EU27 Member States have come to the conclusion that SMP exists in Market 4. The NRAs have typically imposed obligations on the SMP operators including copper full loop unbundling as well as copper sub-loop unbundling, with differing degrees of detail with regard to copper sub-loop unbundling. The level of detail on copper sub-loop unbundling obligations has in most cases been limited, given the limited commercial demand from alternative operators for copper sub-loop unbundling in the past several years. Studies performed for at least 3 NRAs (OPTA, ComReg and BIPT – Annex 3 of the linked document) in 2007-2008 indicated – at best – limited economic viability for alternative operators in taking-up copper sub-loop unbundling.

In the meantime, the situation with regard to commercial wholesale demand for sub-loop unbundling may be changing rapidly. Small-scale use of sub-loop unbundling has occurred in Germany and in the UK (often by -partially- publicly owned energy companies or local initiatives) for several years, but in the past weeks, BT as an alternative operator in Ireland has sought sub-loop unbundling to Eircom’s network, and Fastweb in Italy has announced a substantial investment plan relying on sub-loop unbundling on Telecom Italia’s network.

Widely diverging arguments have been formulated in regulatory proceedings on the preferred approach to be taken to copper sub-loop unbundling in the light of future VDSL2 vectoring development. These include Alcatel Lucent, Vodafone and ECTA.

It is understood that in terms of copper loop/sub-loop spectrum interference management, no NRA decisions specific to VDSL2 vectoring have been taken, and indeed (where the NRA is responsible for determining copper spectrum interference management rules) no such decisions would be needed where VDSL2 (incl. 17 MHz) has already been approved for deployment, unless an organised co- operation model (multi-operator VDSL2 deployment) would be pursued by an NRA.

With reference to the regulatory proceedings which have occurred to-date, T-REGS has taken stock of the precise details of what EU NRAs have actually decided with regard to (potential/partial) phasing-out of copper sub-loop unbundling obligations in the context of VDSL2 vectoring developments.

We have done this by identifying the full extent of the relevant text of NRA decisions, and providing an English translation of the full text of these NRA decisions (which are sub-sets of Market 4 decisions).

The precise references and full text (T-REGS translations where applicable) of the NRA decisions taken to-date are provided below (in reverse order – newer to older).

Germany: BNetzA Decision Decision BK 3d-12/131 dated 29 Aug 2013 + BNetzA press release dated 29 Aug 2013

2013-08-30_BNetzA_DE-2013-1484_Vectoring_Adopted Measures (in German)

BNetzA Press Release 130829_DecisionVectoring (in English)

Ireland: ComReg decision dated 31 Jan 2013 (section, 4.3 - concluding text at 4.3.4 cited below)

Eircom shall have an obligation to grant access, based on a reasonable request for:

• Sub-loop unbundling in areas which have not been identified as susceptible to benefit from a state subsidy scheme, and which meet with the following criteria (which consist of likely indicators regarding whether a request is prima facie reasonable):

1. The request for sub-loop unbundling is at a cabinet or in an exchange area where Next Generation Access roll out and vectoring enablement has not already taken place and is not imminent or credibly scheduled; and;

2. There is a commitment to open access by the SLU operator for the provision of next generation wholesale broadband access services and;

3. There is a commitment by the Access Seeker to bandwidth enhancing technology, where it is possible.

Denmark: Erhvervsstyrelsen decision dated 16 Aug 2012 (paragraph 135 and 136)

TDC will continue to be under the obligation to provide sub-loop unbundling (access to partial sections of raw copper). This means that TDC will not, at this stage be able to deploy vectoring or other similar technologies which make it impossible to offer access to partial sections of raw copper.

In the meantime, TDC has the right, under the conditions quoted below, to conduct vectoring trials or trials with other, similar technologies:

  • The trial area must be clearly defined and delineated a priori.
  • The trial area will be in a location in the country where a limited number of connections areaffected.
  • The trial may, as much as possible, only affect TDC’s own end-users.
  • The trial area will have a limited geographical extent.
  • The telecommunications companies which buy Market 4 products, and which are affected by the trial, must be notified hereof with a minimum of four months’ notice.
  • With regard to the notification, TDC will provide complete information about the trial area.

If the trial (vectoring or other similar technology) implies quality deterioration for already established lines, TDC shall cover the additional cost which the alternative telecommunications companies will have for migrating lines to other wholesale products. Similarly TDC shall cover the additional costs which the alternative telecommunications companies will have for the establishment of new lines based on other products, in the cases where the lines cannot be established for quality reasons. Finally, TDC shall cover the additional costs which are associated with a potential migration back to the raw copper product.

TDC shall report the technical results etc. of the trial to the participants in the VULA forum.

TDC is not obliged to offer network access to partial sections of raw copper or meet reasonable requests for network access to the partial sections of raw copper in the trial area.

Erhvervsstyrelsen will examine whether and if so, which competitive problems are associated with the introduction of vectoring or other similar technologies. Against this background, Erhvervsstyrelsen will decide whether there are grounds for the removal of the obligation to give access to partial sections of raw copper, with the consequence, that TDC can introduce vectoring or other, similar technologies.

Erhvervsstyrelsen has the intention to give this process high priority and to commence as soon as possible, in order for any potential waiver of an obligation to give access to partial sections of raw copper and therewith the possibility to introduce vectoring or other similar technologies to be in line with technological developments.

A potential waiver of the obligation to offer network access to partial sections of raw copper will, in the given case, be in the form of an additional decision (tillægsafgørelse). Erhvervsstyrelsen will endeavour to make a potential partial decision (delafgørelse) on this matter at the latest on 1 November 2013.

Netherlands: OPTA decision dated 29 Dec 2011 (paragraph 475)

If during negotiations on SDF access and alternatives thereof one of the Parties considers that these negotiations do not lead to a reasonable solution, a dispute can be filed with the college (OPTA). This could be the case if KPN would no longer consider a request for access to an SDF location where KPN is already applying phantoming and vectoring, a reasonable request. The college will, in the latter case, determine whether the request is indeed no longer a reasonable request for access. The college is of the opinion that a necessary - but not necessarily sufficient - prerequisite to qualify a request for SDF access as ‘not reasonable’, is that KPN offers a suitable and full alternative.

Belgium – CRC decision dated 1 July 2011 (paragraphs 562-564)

562 Having regard to (1) the negative impact of the unbundling of VDSL2 DSLAMs in the case of "digital line management" and (2) the limited economic viability and complexity of sub-loop unbundling and the lack of concrete business plans for the unbundling of the sub-loop within the time horizon of this analysis, the BIPT considers that it is disproportionate and is not adequate, within the current context and for the validity period of the current analysis, to continue to impose this measure. The BIPT considers that imposing, in this context, sub-loop unbundling would prevent Belgacom from improving both its retail and wholesale offers, while the advantage that would thereby arise for increased competition is not demonstrated, taking into account the study by Analysys Mason.

563 The obligation of sub-loop unbundling (including VDSL2 unbundling at the central office) as well as all supporting measures exclusively related to unbundling of the sub-loop are thus removed. In practice, this concerns the following measures:

  • To provide third party operators fully or partially unbundled access to the sub-loop, with or without voice;
  • For the unbundling of direct pairs from the LEX (central office), given that the investment is not dedicated only to these pairs, access to unbundling continues to be imposed for any technology that does not interfere with the technology of vectoring. For this same reason, unbundling must be granted for VDSL2 as long as Belgacom does not make use of vectoring; Belgacom will inform the beneficiary of the withdrawal of such access for each cable involved, with a notice of six months - in order to ensure that the beneficiary can migrate its VDSL2 connections to the solution of its choice;
  • Offer a co-location service at the level of a street junction box;
  • Offer access to the "remote optical platform" in order to enable co-location;
  • Provide information to the alternative operators regarding the technical infrastructure of its network in order to enable these operators to evaluate the economic model associated with the use of the sub-loop network.

564 The BIPT will pay attention to any evolution - technological or other - as well as any changes in market conditions which could have a significant effect on the conditions guiding this objective of: enabling Belgacom to increase performance, and for alternative operators not to invest in a configuration that they would be called upon to subsequently disassemble. As the case may be, the BIPT will examine accordingly to what extent the withdrawal of the obligation to unbundle the sub-loop remains appropriate and relevant. One may cite, on a non-exhaustive basis, the following:

  • A development of vectoring enabling its utilisation by several co-ordinated DSLAMs;
  • A development of vectoring that would yield significant performance gains, without the requirement to control all VDSL2 lines;
  • The emergence of a new VDSL2 technology that brings the same performance gains without the requirement of one single DSLAM serving the sub-loop;
  • The emergence of a new technology - or an evolution of the use of an existing technology - which makes it possible to compete with VDSL2 deployed from the street cabinet, without disrupting the vectoring;
  • The non-adoption of vectoring by Belgacom within a reasonable time after the operational availability of vectoring by the provider of the VDSL2 DSLAMs used by Belgacom.

Should you require any clarification or wish to discuss this T-REGS article, please contact Yves Blondeel or Alexa Veller.