Spanish regulator approves wholesale market regulation

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The Comisión Nacional de los Mercados y la Competencia (CNMC), which regulates competition, in Spain has approved the definitive regulation of the wholesale broadband access markets.

The new measure is designed to establish differentiated obligations based on existing competition, and provides an update to the 2016 regulation. 

Spain’s FTTH connections have grown from 3.1 million in 2015 to almost 12 million in 2020, according to CNMC data. Because of this the Spanish regulator has expanded the competitive zone to 696 municipalities (compared to 66 in 2016). The rest of the municipalities (7,453 municipalities) will be part of the non-competitive zone.

The competitive area, said the CNMC, is characterised by high competition in infrastructure based on next generation networks. In each of these 696 municipalities, Telefónica's share in the broadband retail market is less than 50 per cent and there are at least three networks with a minimum coverage of 20 per cent.

In this competitive area, the regulator said that Telefónica must maintain its obligations of access to the civil works infrastructure (conduits, conduits and poles), as well as the obligations of unbundled access to the copper pair. Telefonica is not, however, required to provide wholesale access to its network .

According to the CNMC, it’s latest decision ‘implies significant deregulation’. This means the competitive area will go from 66 municipalities (35 per cent of the Spanish population) to 696 municipalities (70 per cent of the population). At the end of 2020, more than 75 per cent of the fibre accesses installed by Telefónica were located in those 696 municipalities. Under the new regulation, Telefónica will only be obliged to allow access to its civil works infrastructure.

In the non-competitive area, the CNMC stated that in addition to the above services, the imposition on Telefónica to provide wholesale services of virtual unbundled access to fibre optics (local NEBA) and NEBA broadband fibre. In addition to these services, in the 7,453 municipalities, Telefónica is required to provide indirect access services over copper called NEBA copper, and regional and national ADSL IP. To facilitate the definitive migration from copper to fibre, the measure contemplates a reduction from five to two years in the period regulated for the closure of Telefónica's copper exchanges.

The CNMC said that it will closely monitor the competitive situation of the market and assess whether it is necessary to adopt within a period of three years a new measure in which the geographic areas of the market are reviewed or, even, if the competitive situation of the market justifies it, move to a framework in which regulated access to Telefónica's civil infrastructure was imposed exclusively and the obligations on local NEBA and NEBA fibre services were withdrawn throughout the territory.

The regulator stated that this new measure has the approval of the European Commission. Within three years, the CNMC will assess whether it is necessary to review the areas considered ‘uncompetitive’ or even withdraw the regulation of wholesale access to fibre throughout the territory.

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