Analyses van een bezorgde enthousiasteling - Tweakers

Time 2020-12-18 15:03:48

Web Name: Analyses van een bezorgde enthousiasteling - Tweakers

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monopolizing the Internet market one byte at a time. By djoenez on Friday 3 February 2017 10:15 - Comments (8)Category: -, Views: 2.994 I noticed that alot of my non-tweaker friends do not know about the strange internet provider monopoly system we have in the netherlands. I put some of my thoughts here in this blog.In the Netherlands, there are two old networks to get a connection with the internet and one (promising) new network. Let s first look at the history of one of the two old networks, ADSL (and variants) which works via the telephone lines.Copper networkThe Dutch telephone network is governed and maintained by one company: KPN (Koninklijke PTT Nederland N.V.). In the 1880s local telephone networks sprung up everywhere, the government saw this as troublesome and started buying these networks and linking them together. The nationalization was complete around 1940. The KPN was tasked with making sure that every home and company had a telephone line. In 1989 the company was brought to the market, while the government had the lion s share of the shares until 2006, when it sold its last shares. The liberalization of the telecom market in the Netherlands was a fact.So now there is a single company with total control over the Dutch telephone network, and this company has a profit based decision making structure. Following a decree from the Dutch government( the decree was made by the OPTA, a predecessor of the ACM in 1998) (ref: http://retro.nrc.nl/W2/Lab/KPNTelecom/010216-b.html), KPN is forced to let other companies use their copper network to sell consumers an internet connection, in which KPN can ask for a fee. This sounds fair, right? No, of course, a company does not want real competitors. ACM (the Dutch authority on consumer and market) concluded in their 2015 analysis that 99 percent of the internet connections via ADSL are made by the KPN network, of which 40% directly from KPN to the customer. Furthermore, the price of renting a copper line to a competing ISP is increased and the commissioning of such a line is actively delayed (ref:https://tweakers.net/nieuws/93875/kpn-krijgt-boete-van-30-miljoen-euro-voor-benadelen-concurrenten.html). KPN gets multiple fines for this, but looking at the timeline, it doesn t learn from this. In other words, KPN is bullying the competitor with its position (ref: ACM market analysis 2015 p.8). Lastly, KPN is improving their copper network with new technologies to improve the speed of their broadband product. But while the infrastructure is there, competitors have to pay a premium to use these technologies (such as pair bonding), while KPN itself is using it for free . The price of these improvements of the KPN network is reflected in the cost for the consumer. A study by Van Dijk consultants of internet speed in Europe shows an increase in pricing of 27%-29% from 2014 to 2015 (ref: final report broadband internet access cost 2015 van Dijk. p.154). This number only includes standalone internet subscriptions from 12-30 Mbps. If you think this is bad: It gets worse. But first, the other old network, TV cabling. TV-networkIn the late 1950s and early 1960s a lot of municipalities in the Netherlands built their own tv-network, as having roofs littered with antennas for a tv signal was dubbed ugly. These local systems were coax cables (a solid copper core with metal shielding around it) that were connected to one central antenna tower. This meant that there was no central network, only local high density networks. This changed during the European liberalization act in the mid-1990s, this stated that the government should not control these platforms. private companies bought these networks, and interconnected them with fiber cables. A crucial difference between the tv-network and the telephone network used for ADSL is that the telephone network has been financed by the state for over 80 years. While the tv-network has been build by municipalities, and after the liberalization private companies interconnected these. Why am I telling you this? Because you can have an internet connection through these cables, very fast ones actually (the fastest non-fiber consumer internet speed possible in the Netherlands is via tv-cable).Fast forward to 2010, the market is divided by two main companies (and some smaller companies in the outer layers of Holland): UPC and Ziggo. Because of limitations with the technology of having only one copper core to send and receive data (and the spectrum to send data of such a cable is limited, meaning that having multiple providers use the same cable network means slower speeds and less tv signal coming through, but those are technical details I was not getting into in this story), it is not possible to have multiple internet providers in the same region. So UPC and Ziggo are geographically parted. Depending on your location, you can get internet from either UPC or Ziggo. This already sounds like a two-sided monopoly, and it gets more interesting.In 2015, liberty global (the company behind UPC) places a bid on Ziggo to strengthen their position in the Netherlands, this would mean that UPC would get 90%+ of the customers of tv and internet using this technology. You would guess that somebody was going to stop this. But lo and behold, The ACM and a European commission give the OK for this plan. ACM accompanies this statement with: at the moment it is technological impossible to have multiple providers in the same location (ref: ACM marktanalyse ontbundelde toegang p.39). This is actually possible with the new DOCSIS 3.0 and 3.1 standard, an internet connection is made by banding multiple spectrum channels on the same line, with a four-channel minimum of each 8 MHz wide. The complete docsis 3.1 spectrum is 914 MHz wide, so there is enough space. (and UPC is currently incorporating DOCSIS 3.1 in their network, ref: nieuws: 'Ziggo start binnenkort met installatie eerste docsis 3.1-modems'). And what is the first thing you do when you are the sole provider of a service? You increase the price, in 2015 the price was raised by 2 euros for every customer, and Ziggo does the same in 2016. (did I tell you that about the same time this happened KPN upped their price by around 2 euros? Ref: http://www.rtlnieuws.nl/g...etten-en-vast-bellen-fors and nieuws: Ziggo verhoogt prijzen van oude abonnementen voor een derde van klanten).After all this, a small intermezzo:The ACM notes in the market analysis of 2015 that the Netherlands now has two monopolies: on one hand, there is KPN, the other Ziggo. ACM states: in absence of any competitor pressure it is plausible that KPN and Ziggo will have an above competitive pricing scheme and lower quality services. The decrease of competitor pressure will result in consumer damage. (ref: ACM marktanalyse ontbundelde toegang 2015 p.17). But, it gets worse.Fiber opticsAnd finally, the third, new network in the Netherlands, the fiber network!Fiber internet makes use of small strands of glass, where the outer layer of the cable has a higher refractive index than the part (the core). When shooting light inside the fiber at one end, it will continue to bounce inside the fiber until it comes out the other end. One fiber can handle incredible amounts of data, and unlike the past two networks it can handle the same amount of down and upload speed. This technology was first used to link up different universities together, later to link up ADSL and Coax district cabinets to enhance the speed. This practice is done because it is a lot cheaper to lay one cable to a central position where all the copper cables come together, than routing fiber cables to every single house.But why does the Netherlands need a new network? The amount of data the dutch consumes grows fast. When we look at the peak traffic of the largest internet exchange point in the Netherlands it has grown from 220 Gbits per second in 2006 to 5.2 Tbits per second in 2016 (23 times more data ref: https://en.wikipedia.org/wiki/Amsterdam_Internet_Exchange). And it is still growing. Copper, does not have the bandwidth to keep up with the rising need for bandwidth. It can be stretched, but the end is already in sight.In 2005 a company called Reggefiber started installing fiber cables to homes on a large scale. Together with some smaller companies and local initiatives the number of houses that were connected to this new network in 2014 was over 2 million. But there is something interesting here, in 2008 KPN bought a majority interest in reggefiber and another large rollout company called Lijbrandt(ref: https://www.acm.nl/nl/pub...iebesluit-KPN-Reggefiber/ ). Vodafone, a mobile and internet providing company tries to stop this via the dutch court system, which in turn turns to the ACM. The ACM researched the deal, and adds an additional condition to it, that KPN should still provide access to the network for competitors. As we can see the rollout continues onwards, but slowly loses momentum, as we can read in an interview with the CEO of KPN: I estimate a further reduction of fiber to the home capital expenditure compared to what we have announced recently Eelco Blok (referring to the reggefiber statement of 300.000 new connections per year ref: https://tweakimg.net/files/upload /Bernstein%20report%20CEO%20unplugged.pdf).Looking to the news in 2016, there are a lot of fiber plans in cities and municipalities that are now postponed, or cancelled because KPN will upgrade the old ADSL network (ref: nieuws: KPN stopt met aanleg glasvezel in Eindhoven). And if this continues, we can only see KPN s hold on the market grow stronger. It has made sure that on the new network, the old monopoly was in place. OutsetWhat maybe is noted from my story: I m not content with the situation, and I think the situation at the moment is unfair for consumers as well as other companies. When looking at the copper network it is hard to change anything, as KPN has already invested a lot of money in to the network they themselves got for free. When looking at other projects of the government to privatize certain services I think the best option would be the NS-Prorail approach, where KPN is split between two different companies, one has the sole purpose to maintain the copper network, where the other is just an internet provider , definitely not both! Because KPN is already a private company, the splitting of the company would not happen, as KPN does not want to give up its position.With cable, it is easier, because the Ziggo network is being upgraded more service providers can enter that market, the problem is that the same construction will arise. Where Ziggo has a position as a service provider and has control over the network. It is maybe not the best option for the consumer, but it is better than it is now.And last, the beacon of hope of our generation, fiber optics. In my opinion the government should step in and subsidize municipalities for rollouts of this network. For the Netherlands, this is I think the only way forward, and it is, when done on a large scale. Cheaper than a one house at the time policy. About First, a small disclaimer, I am not a journalist. The best description of me would be a concerned enthusiast. I base my blog on news articles (such as www.tweakers.net, which can be biased), wikipedia (which can be biased) and ACM (the Dutch consumer authority). Furthermore, I won t get into technical details (that much). Tweakers.net Profile

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First, a small disclaimer, I am not a journalist. The best description of me would be a concerned enthusiast. I base my blog on news articles (such as www.tweakers.net, which can be biased), wikipedia (which can be biased) and ACM (the Dutch consumer authority). Furthermore, I won&#8217;t get into technical details (that much).

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