Amsterdam glass fibre still not convincing to EC

EC Commissioner Kroes in the EC responsible for market competition still has great doubts about the way the municipality of Amsterdam is investing in the glass fibre project. There is still a question about the way the city of Amsterdam has invested in the glass fibre project linking 400.000 household. Ms Kroes suspects the city of Amsterdam of subsidizing the large-scale broadband project to the detriment of private telecom companies and cable operators. She is also calls the plans over ambitious.

From the beginning of the project there has been opposition to the way the municipality has handled the project. The municipality was already warned by the announcement of an investigation last December. Kroes scrutinises the position whether the municipality of Amsterdam is partaking as a private investor or whether is subsidises the project. If so, she says, it looks like the municipality did not make the investments simultaneously with the private investors nor under the same conditions.

Now it appears that Ms Kroes sent a letters formulating several questions to be answered. The press release about the investigation came as a public announcement and as a not very welcome Christmas present for the Amsterdam municipality. The letter with questions was confidential. Amsterdam claims that it has answered all the questions. Kroes claims that 18 months after her first request and several reminders she finally has the information.

The business plan is also criticised; it is too optimistic, Kroes says. In the first phase 37.000 households will be connected; eventually 400.000 households have to be linked up. The business plan is seen as over-ambitious and optimistic, while the connecting time and the amount of households do not square. The penetration in the minimum scenario is optimistic.
The in-depth investigation stems from complaints filed by telecom company UPC and the association of cable operators VECAI. UPC has been excluded as a partner and investor at an early stage; the company serves the Amsterdam area with analogue and digital television, internet and fixed and mobile telecom. The Amsterdam glass fibre project is not only competition for the cable operator UPC, but also for the incumbent telecom operator KPN; KPN is involved in the project in the meantime.

The VECAI considers the protest of the cable operators as valid, as it is not just one question the municipality of Amsterdam has to answer to the EC, but at least five or six. The municipality has not made public statements about the investigation, but has continued with its activities (connecting the first households and the promotion of the project as was seen during the Australian New Zealand trade mission). The question does not move fast; since the public announcement of an inquiry more than 5 months have passed. This does not bode a positive decision fro Amsterdam.

Blog Posting Number: 772

Tag: glass fibre