While the EC appears to support the deregulation of legacy networks, will it approve of the PTS bypassing the formal market review process?
Swedish regulator proposes to withdraw copper access rules: In January 2023, the PTS – Sweden’s telecoms regulator – launched a public consultation on a draft decision that would immediately remove obligations relating to Telia's copper-based infrastructure. As the operator continues the switch-off of its legacy infrastructure (which it intends to complete by the end of 2026) and as consumers migrate to more advanced broadband technologies, the PTS has proposed to lift requirements on Telia to provide access to its copper network. In contrast, obligations on Telia to provide access to its fibre infrastructure and associated services will not change. The consultation closed on 1 February, with the regulator currently considering stakeholder responses.
The most recent market review maintained regulation of the incumbent: The PTS’s latest market review decision of 2015 found that Telia had significant market power (SMP) in the national wholesale fixed local access market, and imposed remedies on the telco, including access obligations and cost-based price caps. In 2019, the regulator provisionally found Telia dominant in separate national wholesale markets for fibre and copper, and looked to keep most existing remedies in place. However, in December of that year, the EC expressed ‘serious doubts’ that the fibre market in Sweden is national in scope (for example, given the presence of numerous municipal networks), which led to the PTS withdrawing its draft decision. The EC also suggested that given the country’s high fibre coverage, the PTS should closely monitor developments in the ‘rapidly shrinking’ copper market and revisit the need for continuing regulation.
The PTS has sought to deregulate outside of the market review process: Since the EC’s decision, the PTS has yet to publish an updated market definition or SMP finding; however, during this period, the regulator has removed certain copper-oriented remedies (without EC objection). The PTS is now looking to circumvent the usual market review process and to go a step further by removing all copper access obligations that it had previously imposed on Telia. Deregulation of wholesale broadband access is a growing trend across Europe, where deployments of multiple networks reduce the likelihood that one operator holds SMP and hence that ex-ante rules are needed to facilitate competition downstream. While the EC appears to support deregulating legacy networks, the question is whether it will be comfortable with the PTS’s approach and proposals, particularly as the new review is not expected to be completed for some time.
