Dutch cable conflict brewing

While the Telefonica entertainment company Endemol made its rentree on the Amsterdam Stock Exchange with a louzy 9 euro as introduction price, a real conflict is brewing between the Dutch telecom regulator and the European Commission, in casu commissioner Neelie Kroes, who is of Dutch origin, and Commissioner Viviane Reding. The Dutch telecom watchdog says in a letter, that the Commission’s investigation into the Dutch TV cable market is no good.

In the Netherlands there are 6,1 million TV cable subscribers or nine out of the 10 households have a TV cable connection. They are served by 3 large companies such as UPC, part of Liberty, and Essent and Casema, together serving 5.1 million households, plus a parade of small, regional and local companies. All these companies offer now TV by cable, internet and telephone, not as an integrated offer, but as separate products. Presently these companies are moving from analogue cable to digital cable and from analogue TV to digital and interactive TV. UPC recently started to roll out 2 million set-top boxes.

The companies have all their own territory and their monopoly. So in my home I can get only a Casema TV cable subscription at their price. With the digital wave coming up, it is necessary for the big companies to keep their territory and their monopoly. So far the only other option subscribers have is to subscribe to terrestrial broadcast, Digitenne; but Digitenne is only available in the west of the Netherlands.

The Dutch telecom watchdog OPTA had concluded that the three large companies have a dominant position in the consumer market. The European Commission concluded that it had grave doubt about the conclusion of OPTA. Given the fact that most of the parliament shares the conclusion of OPTA, the conflict might grow. And when it becomes a real conflict, Kroes might have to step down in this question as it concerns a national question.

Today and tomorrow the question will be discussed in Brussels. By January 3, 2005 the European Commission will make its final decision known.

(BTW Today is the deadline to hand in proposals in the framework of the e-ContentPlus programme of the European Commission. I am wondering how many project proposals will be entered. Given the fact that the IST programme lane has become more difficult to enter for small projects and for SME's, I guess that there will be some hundreds of proposals. To be awarded a contract will be Russian roulette.)