Presentation at the Workshop on Municipal Fiber Networks, October 24th 2011 in Ghent, Belgium. The workshop was organised by Ghent University - IBCN / IBBT. More information about this event can be found at http://http://events.ibbt.be/en/workshop-municipal-fiber-networks.

1. Municipal fiber network in the
Netherlands
Three different legal approaches
: Prof. dr J.M. Smits LL.M.
Date : October 24, 2011
Location : Gent, Belgium.

2. 2
This image was posted by photographer Daniela Duncan
October 24, 2011 IBBT Gent

3. The Development of Municipal
Networks in the Netherlands
October 24, 2011
3 IBBT Gent

4. The Development of Municipal
Networks in the Netherlands (2)
OECD Fixed (wired) broadband subscriptions per 100 inhabitants, by technology, December 2010
40
Other Fibre/LAN Cable DSL
35
30
OECD average
25
20
15
10
5
0
Source: OECD
From 0.4% 1,1% The Netherlands
October 24, 2011
4 IBBT Gent

5. The Development of Municipal
Networks in the Netherlands (2)
Percentage of fibre connections in total broadband subscriptions, Dec. 2010
Japan
Korea
Slovak Republic
Sweden
Norway
Denmark
Hungary
Czech Republic
Iceland
Portugal
Netherlands
Turkey
2.8%
Italy
Poland
Finland
Switzerland
France
Ireland
Spain
Luxembourg
Austria
Australia
Germany
Canada
New Zealand
Greece
Belgium
0% 10% 20% 30% 40% 50% 60% 70%
October 24, 2011
5 IBBT Gent

6. General legal environment
6
• Respective regulatory Telecom packages since
1993 allowed for license free market for
establishing electronic communication networks
• Services of General Economic Interest
• State Aid (EU approval, in forms such as recent
French scheme (white areas) or Citynet
Amsterdam (market economy investor principle)
October 24, 2011 IBBT Gent

7. Region: Four municipalities
7
Incumbent approach
Public party approach
SGEI approach
October 24, 2011 IBBT Gent

8. 8
Licensed/incumbent operators
October 24, 2011 IBBT Gent

9. Nuenen
9
• FttH Nuenen saved a national subsidised program
called Kenniswijk (2000-2002)
• Very effective community marketing
• Cooporative property by all inhabitants of Nuenen
(OnsNetNuenen)
• Network operator has/had essential control
• FttH networks play important role in perceived feeling
of social well being
• Now well under (indirect) control of Reggefiber/KPN
October 24, 2011 IBBT Gent
IBBT Gent

10. Nuenen
10
• OnsNet Nuenen is a coöperation
• Every one with a subscription on a service of OnsNet
Nuenen is automatically member of the coöperation
• Owner and exploiter of Fiber Optic Network is Netwerk
Exploitatie Maatschappij Nuenen (NEM Nuenen BV), a ltd in
which members of van OnsNet Nuenen hold shares
• NEM concludes contracts with service providers, enabling
the direct delivery of services over the fiber optic network
October 24, 2011 IBBT Gent

11. Geldrop Mierlo
11
• Contract signed February 2007 between municipality
and NEM Brabant (subsidiary of Reggefiber)
• Then a period of intensive local marketing is done,
also through opening a special (sign up-) store
• May 2007 18000 homes passed appr. 10.000 homes
connected
• September 2008 ready for operation
• Three service providers: KPN Glasvezel,
OnsBrabantNet, Xs4all
October 24, 2011 IBBT Gent

12. 12
Public parties: muncipality & social
housing organisations
October 24, 2011 IBBT Gent

13. Eindhoven
13
• 22 september 2003 city council approved ‘Glasrijk Eindhoven’ with the
intention in 2010 the whole of Eindhoven (ca. 100.000 woningen)
connected to a fibre optic network
• 1 july 2004 Gemeente Eindhoven & 5 Social housing organisations
signed a declaration of intent to connect within a year 6.000 houses
• These social housing organisations established NEMe (Network
Exploitation Society Eindhoven)
• five housing org established a separate legal entity: Lichtrijk BV to be
able to participate for 20% in an entity that took care of financing NEMe
• March 2007 a new entity was created Lichtrijk Beheer BV, gathering the
20% stakes of each of the social housing org, after a merger 3x30% and
one 10%
• Half 2007 50% of the shares were acquired by Reggefiber.
• Now (2011) the social housing corporations want out
October 24, 2011 IBBT Gent
IBBT Gent

14. 14
Services of General Economic Interest
October 24, 2011 IBBT Gent

15. HeezeLeende
15
• SGEI are based upon Article 14 and 106(2) TFEU
• As a consequence of standing ECJ jurisprudence it is attributed
legal power to all public regulatory entities
• It can take the form of a contract, Service Level Agreement,
formal local law, etc.
• It allows the formulation of rights and obligations for operators
– Public procurement;
– Technological neutrality;
– Open access (legal, technical and functional);
– Input existing infrastructure;
– Minimal use of public funding;
– Universal service.
October 24, 2011 IBBT Gent

16. HeezeLeende
16
• Started end 2008 beginning of 2009
• Ownership of the physical network: Foundation
• Cooperative arrangement for the responsibilities of exploiting the
network
• They worked out a nice scheme for constructing the network,
through a commercial loan guaranteed by the municipality, inputs
from idivduals as well as companies
• Pre selected (after procurement) party for network/services
operation (in the proces bought by Reggefiber)
October 24, 2011 IBBT Gent

17. 17
State Aid & MEIP
October 24, 2011 IBBT Gent

18. State Aid
18
• 83 deciscions (july 2011)
• http://ec.europa.eu/competition/sectors/telecommunications/broadband_decisions.pdf
October 24, 2011 IBBT Gent

19. Market Economy Investor Principle
19
• Citynet Amsterdam
Decision 23 C 53 / 2006 (ex N 262 / 2005) – Citynet Amsterdam –
NL NL 20/12/2006
October 24, 2011 IBBT Gent

20. 20
Conclusions
October 24, 2011 IBBT Gent

21. FttH: Local recognition
21
• Public telecom networks are essential in the
general interest
• Necessary: Leagal separation of electronic
communication networks -services
• Exploitation of networks has many real
estate characteristics
• Innovation means more living comfort &
quality of live
October 24, 2011 IBBT Gent

22. Incumbents
22
• Take all the advantages the liberalised
market has given them
• They dictate speed of investment
• They deny positive businesscase
• Regulators and enforcement agencies limit
their control by the sole application of
(general) competion law
October 24, 2011 IBBT Gent

23. 23
Questions please
October 24, 2011 IBBT Gent

24. Contact
October 24, 2011 IBBT Gent