On 15 Feb 2007, the Swedish regulatory authority PTS issued a 164-page document (available only in Swedish) containing extensive proposals for a new national broadband strategy.
The stated aim of PTS is to achieve an increase in the accessibility of broadband infrastructure with the short-term objective of broadband for all households (permanent housing), businesses and public entities no later than 2010 and to promote and protect sustainable retail market competition for broadband services. Broadband is defined in the context of this 2010 target as connections that can be upgraded to a downstream transmission speed of at least 2 Mbit/s.
Several simultaneous ‘policy trajectories’ are put forward by PTS to achieve the stated 2010 goals. The first trajectory involves financial and regulatory requirements for government funded infrastructures; the second trajectory addresses regulation of the fixed incumbent operator TeliaSonera’s network infrastructure and wholesale activities (including proposals for functional as well as legal separation). The third trajectory focuses on openness and neutrality of (often government-owned or funded) fibre infrastructures.
In terms of government funded infrastructures PTS suggests the following:
- Continued government support of initiatives representing a global investment of SEK 1135m (€864m) for the rollout of broadband infrastructure (of which SEK 567.5m (€432m) financed by EU structural funds).
- Imposition of minimum requirements on infrastructure established with public funds (e.g. minimum transmission rate).
- Any broadband networks financed with ‘central government support’ should be open to service providers other than the network owner during the (entire) lifetime of the networks.
In order to be able to fulfil point 3, PTS is requesting (from the legislator) powers to impose access requirements through regulation and wishes to be given a mandate to monitor compliance and to take the measures available under the Swedish Electronic Communications Act with regard to these networks.
Municipal authorities are bequeathed with a monitoring and structuring role (data collection of existing infrastructure and rollout plans). PTS also asks for legislation allowing municipalities (as broadband providers) more freedom to allow for cross-municipal collaboration. PTS is also advocating the inclusion of access to broadband in the scope of universal service (in the context of the review of the EU Universal Service Directive 2002/22/EC). This, according to PTS, also brings along the need to re-evaluate and change the financing model for universal service based on the allocation of net service costs between the providers of electronic communications networks and providers of communications services.
PTS also suggests that the Swedish Government should encourage coordination of construction of telecommunications infrastructure with other infrastructure, e.g. electricity infrastructure.
In terms of TeliaSonera’s wholesale activities (especially the local access network) PTS indicates that equal access to TeliaSonera’s local access network is neccessary in order to achieve long-term and sustainable competition in the broadband market. PTS considers that this will reduce inertia in the market and improve predictability.
PTS is of the view that the most suitable model to do away with potential favouritism of the incumbent network for its retail division is to adopt a model of ‘functional separation’ and/or ‘a stronger legal separation’. Although TeliaSonera Network Sales AB (operating under the trade name ‘Skanova’) already has been separated out as a legal entity, wholesaling fixed network infrastructure, PTS notes discrepancies of treatment with regard to information flows and differences of procedures for installation and maintenance between the affiliated retail organisation and alternative wholesale customers (alternative operators).
PTS also envisages a complete separation of the workforce and suggests separating all wholesale human resources from the rest of the company. In addition, PTS wants to eliminate any exchange of information between the wholesale organisation and other parts of TeliaSonera that could benefit TeliaSonera’s retail operations at the expense of other market players.
PTS indicates it would set up a compliance board (including PTS officials) whose task it would be to continuously monitor the outcome of the proposed functional and/or legal separation model. The compliance board would be the forum to which TeliaSonera would report, but it would also be the place for alternative market players to have their voice heard in the discussions regarding the new separation model.
PTS encourages TeliaSonera to reinforce such separation voluntarily, as it considers that there is limited scope under the current Swedish Electronic Communications Act to impose separation as a sector specific remedy. PTS is however convinced that the new model will bring advantages to TeliaSonera and that this should be sufficient motivation for the company to proceed voluntarily to separation.