Thursday, March 20, 2008

Sweden - broadband

Sweden proposes law, seeks open broadband market

Sweden proposed on Tuesday its telecom regulator be given extra powers to ensure the country's broadband market was open, legislation that could require TeliaSonera (TLSN.ST: Quote, Profile, Research) to make structural changes.

The legislation is aimed at making sure that former monopoly provider TeliaSonera does not discriminate in providing access to its copper wire network.

Last autumn, not long after draft legislation was proposed, TeliaSonera created a separate company for its copper and fibre networks with a requirement that the unit sell access to them on equal terms to all wholesale companies.

The move pre-empted government legislation, but the bill announced on Tuesday could give the regulator power to ask for further changes if it believes the broadband market is not open.

The bill allows for National Post and Telecom Agency (PTS) to request TeliaSonera administer its copper network separately -- as it now does -- and that it provides access to so-called bitstream equipment via a separate subsidiary.

A bitstream is a stream of information used on a network, essentially a bit of code within the software that allows the network to run.

A PTS official said that without access to this equipment, it was not commercially viable for other operators to supply services in areas with low population densities, which account for about 3 million of Sweden's 9 million population.

"We are giving the PTS another tool to increase competition," Minister for Communications Asa Torstensson said in a statement.

Any decision calling on TeliaSonera to separate parts of its business must be preceded by an investigation and the European Commission needs to approve of any actions requested.
The legislation is due to come into force on July 1.

Niclas Palmstierna, chief executive for the Nordic region at Tele2, said the legislation was necessary to ensure TeliaSonera was open.

He said TeliaSonera was increasing its market share whereas other former monopolies tended to lose market share over time.

"We still have more than 50 percent of the population that will only be able to have one choice of broadband supplier," he said.

If companies have to supply their own bitstream equipment in order to compete with Telia, it would be like building a highway next to an existing one, he said.

TeliaSonera officials could not be immediately reached for comment.

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