By Alessandro Mauro
To submit comments and updates: alessandro.mauro@telecomitalia.it
In 2006/2007, the NRA Swedish Post and Telecom Agency (PTS) conducted a market analysis that led to the following conclusions:
- a significant number of Swedish citizens had no access to broadband services, and about half of the population had no opportunity to choose a service provider, as in some areas the incumbent, Telia Sonera, was the only operator present;
- Telia Sonera imposed its commercial conditions to the other licensed operators which wanted to buy wholesale services.
Following this analysis, the Authority in 2007 proposed a legislative amendment that would give the NRA the power to impose to the incumbent the adoption of a model of functional separation, also due to the high level of conflict between the incumbent and the alternative operators; nevertheless, the market share of Telia Sonera was equal to 57% on DSL connections and only 36% in total.
PTS concluded that the main cause of "bias" of the market stemmed from the natural incentive of the incumbent in discriminating the other licensed operators given the vertical integration of Telia Sonera, and the possibility of doing so, since the operator was in possession of a network structure not replicable.
The PTS proposal was granted by the Swedish Parliament; the Parliament introduced a legislative amendment with effect from July 2008: PTS thus acquired the power to impose to the incumbent the functional separation of its network, subject to the approval of the European Commission.
The Authority did not imposed the functional separation, but expressed its intention to conduct a market analysis aimed at deciding whether to proceed in this direction during 2009.
Note that the law referred to the copper network only; the NRA wishes to extend its power of influence to the NGN too.
Skanova Access
Even before this legislative change, Telia Sonera launched on January 1st, 2008 its new access network department Skanova Access, tasked with providing access to the network – on an equal treatment basis - to its own retail department and to other licensed operators. A model of functional separation was therefore adopted voluntarily, although not imposed by the Authority. Skanova offers access services, both on copper and fiber network, to the OLOs and the commercial departments of Telia Sonera.
Skanova is a legally separate division of Telia Sonera, with separate systems and subject to financial auditing requirements, although still 100% owned by the incumbent. The personnel of Skanova Access must abide by a specific Code of Conduct containing measures intended to ensure that the principles of equal treatment and non-discriminatory practices are respected.
Under the new rules adopted for the functional separation, any proposal advanced by the incumbent must be submitted for approval to the Authority; PTS has not expressed any evaluation on this matter so far, except an intervention (dated November 2009) which highlighted that the introduction of Skanova had not resulted in significant improvements in terms of real transparency.
L’Equality of Access Board
To control Skanova Access a special body was set up, the Equality of Access Board: the Board must monitor the proper respect of the principle of equal treatment by the network department.
The Equality of Access Board is composed of a Chairman, who is in charge of the internal audit of Telia Sonera, and two independent members appointed by the operator. No members appointed by the Authority are foreseen.
The Board, which must report every four months to the CEO of Telia Sonera, carries out activities of monitoring compliance with the undertakings adopted by the incumbent operator.