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Belgian Incumbent ISP Not Dominant Operator Says Appeals Court

Picture this: the still state-owned (51% of shares) Belgian incumbent telecom and Internet operator, Belgacom, is not a dominant player on the ISP market, according to the Brussels appeals court (see also here).

It is obvious to every inhabitant of Belgium that the incumbent is everywhere. It owns all the copper pairs to homes and a good deal of the fibre. No single Internet or telephony operator can get into the business without transiting through the Belgacom network at some stage. As expected, the infrastructure owner is not keen to open up its infrastructure to competitors and has used every trick in the book to slow down competition. As a result, alternative operators, be it in telephony or Internet access, have a ridiculous market share. Belgacom has a more than 70% share of the residential Internet access market. Belgium has one of the most expensive Internet access offer in Europe, nearly twice the price of France, for example.

The telecoms regulator, IBPT, is often depicted as a weak one and often accused of favouring Belgacom. It came with some surprise a few months back that the regulator ruled that Belgacom had to open up its ADSL and VDSL infrastructure to the competition. Under the EU competition rules, it is foreseen that the infrastructure owner and dominant operator has to open its infrastructure to allow competitors to offer their services, too.

Belgacom wishes to diversify its income sources and launched an ambitious project to deliver triple play services. This includes high definition and pay TV. For this to happen they needed to upgrade their DSL network. They embarked in an infrastructure project to lay fibre optic cabling up to street cabinets (FTTC) and deliver VDSL2 connectivity from there to the customers premises. This has actually proven very successful. Belgacom was greatly helped by the fact that the cable TV operator in the Southern part of Belgium, Voo, has an outdated and poor quality network.

It may be that IBPT did not make a rigorous enough study of the marketplace. Still, I cannot understand judges refuse to see what is obvious to all. The net result is that Belgacom’s competitors will have even less opportunities to offer quality services and that the incumbent’s market share will grow even more. For customers, this will mean less choice and higher prices. This is sad news in a country where the unemployment rate have risen quite sharply due to the global economic downturn. It is nearly impossible these days to apply for a job if you do not have an Internet connection and e-mail address. The most vulnerable part of the population will be the first victim.

By Patrick Vande Walle, All around Internet governance troublemaker

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