The CNMC approves the wholesale regulation of broadband markets

The CNMC expands the competitive zone in new generation networks to 66 municipalities, which is equivalent to 35% of the population. In the rest of the municipalities, the CNMC forces Telefónica to provide third parties with a virtual disaggregated access service (local NEBA) over its fiber network.

The National Markets and Competition Commission (CNMC) has approved the final measure for the regulation of wholesale broadband markets (Markets 3a, 3b and 4 of the European Commission's Market Recommendation).

After receiving comments from the European Commission, the Ministry of Industry, Energy and Tourism and the Ministry of Economy and Competitiveness, the CNMC has decided to maintain differentiated obligations for Telefónica's copper and fiber optic networks. Different obligations are also established depending on the competitive pressure that exists in each geographic area (geographic segmentation criterion).

The CNMC will continue to monitor the evolution of broadband markets, “in order to identify whether competitive pressures are sustained over time and to what extent they restrict the competitive capacity of operators.”

In principle, and in accordance with European and Spanish regulations, the next market review is expected to be carried out in three years.

Direct access market

The CNMC has expanded the area identified as competitive in new generation networks (fiber optic networks to the home and DOCSIS 3.0 coaxial cable networks) to 66 municipalities, which is equivalent to 35% of the population. In these municipalities there are a minimum of 3 operators simultaneously deploying new generation networks. The scope of this zone will remain fixed until the next market review.

Given that in these 66 municipalities there is sufficient competition in new generation networks, there will be no regulatory obligations on Telefónica's fiber optic network. In any case, regulated access to Telefónica's copper network and civil use infrastructure is maintained (which are a key element for alternative operators to be able to deploy their own new generation networks), with cost-oriented prices.

In the rest of the territory, Telefónica must have available within 18 months a wholesale offer of virtual access to its fiber optic network (local NEBA).

Residential indirect access market

Regarding the indirect access market at the residential level, the CNMC has also expanded the scope of the competitive zone to 758 centers, which is equivalent to more than 7 million broadband lines (58% of the total lines in Spain).

In this competitive zone, all current indirect access obligations will be eliminated within 6 months.

In the less competitive area, which makes up the rest of the exchanges (more than 8,000), the CNMC has decided to maintain the obligation to offer indirect wholesale access over Telefónica's copper and fiber optic network without the speed limit of 30 Mbps currently applicable (NEBA copper and NEBA fiber).

Business Indirect Access Market

Given the lower level of competition detected in the business segment, the CNMC will force Telefónica to make available to alternative operators a wholesale offer of indirect access over fiber and copper for the business sector (business NEBA), which will be available throughout the national territory.