Consultation Document “Collocation and non-recurring costs with regard to access to the local loop”

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Consultation Document

“Collocation and non-recurring costs with regard to

access to the local loop”

OPTA, 2 October 2000

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ii

1 Introduction

1. On March 23 and 24, 2000, the European Council in Lisbon called upon the member states of the European Union to, together with the European Commission, strive towards more competition in the realm of local access networks before the end of 2000, and towards the unbundling of the local access network, with the aim of considerably reducing the costs of Internet use.

2. In the “Commission Recommendation on Unbundled Access to the Local Loop” dated April 26, 20001_{(hereafter: ‘the Recommendation’)} the European Commission states that local access networks have remained among the least competitive areas of the liberalised

telecommunication market, because new participants do not possess widespread alternative infrastructures.

Moreover, such providers are not capable of equalling the scale advantages of market participants with significant power in the fixed public telephone network market. The European Commission refers here to the fact that these operators set up their local access networks in the days of exclusive rights and that these were financed by monopoly profits. The European Commission remarks further that, in their opinion, it is not to be expected that new operators shall duplicate the connection network within a reasonable time-span, while furthermore, alternative infrastructures do not, in general, offer the same functionality or the same omnipresence.

3. New participants can request access to the local loop on basis of special access. Special access is after all access to a telecommunication network through points other than the network connection points offered to the majority of users. On the grounds of European

telecommunication legislation, operators with significant market power in the fixed public

1_{Commission Recommendation on “Unbundled Access to}

the Local Loop: Enabling the competitive provision of a full range of electronic communications services including broadband multimedia and high-speed Internet”, 26 April 2000, C(2000)1059.

telephone service market are obliged to supply this form of access to their networks, should this be reasonably requested. This duty is

implemented in Dutch legislation in Article 6.9 of the Telecommunications Act (hereafter: TA). This article compels, among other things, that special access should be provided non-discriminatorily, transparently, and at cost-oriented tariffs.

4. A number of forms of access to the local loop are possible. One specific form is access to the unbundled local loop. The commission of the Independent Post and Telecommunication Authority (hereafter: the commission) published, on June 4, 1998, a consultation document consulting the market on this form of special access. The consultation lead, on March 12, 1999, to “Guidelines concerning unbundled access to the local loop” which was later adapted on November 9, 1999. In addition, the commission passed a decision on May 25, 2000 on the provisional tariffs maintained by KPN Telecom B.V. (hereafter: KPN Telecom) for unbundled access to the local loop.2

5. In the commission’s opinion, the availability of collocation (in any form) forms an essential part of a request for special access in order to make service provision truly possible for new operators, on the basis of forms of access to the local loop. The commission has previously, including in its ‘Provisional decision’ regarding a dispute between Cistron Telecom B.V. and Koninklijke KPN N.V./KPN Telecom B.V., dated February 22, 2000, and in two letters from the commission to KPN Telecom dated June 16, 20003_{, taken the position that the unbundled} access to the local loop as supplied by KPN Telecom to operators should be classified as a special access service. Additionally, the commission observed that the possibilities for

2_{The present guidelines, as well as the decision, can be}

viewed on OPTA’s website (www.opta.nl)

3_{These letters can be viewed at OPTA ’s}

website:(http://www.opta.nl/download/briefkpn1662000. pdf and http://www.opta.nl/download/

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2 collocation should be viewed as inextricably

connected to requests for special access to a completely unbundled local loop, and should thus be taken into account while dealing with requests for special access. The commission also indicated that, with an adequately specified and reasonable request for special access, a request for collocation is in principle reasonable. 6. The commission is supported in this opinion by the European Commission, which, in its ‘Communication’ dated April 26, 20004

(hereafter: ‘the Communication’) states: ”To be effective, providing rights for unbundled access to the local loop must be accompanied by provision of rights for collocation. National regulatory authorities need to take steps to ensure that third parties that are granted unbundled access to local loops are also able to collocate equipment on the premises of the local loop operator”.

7. The commission places a great deal of importance on clarity for operators on the commission’s position concerning collocation to benefit forms of access to the local loop. The importance of this clarity is emphasised by the fact that a number of disputes were brought before the commission in 2000 which concerned collocation to a lesser or greater extent. The commission has resolved to start a consultation procedure which, in as short a time as possible, should result in guidelines regarding collocation to benefit access to the local loop. In addition, attention will be turned to the so-called ‘non-recurring costs’ associated with types of access to the local loop. Should a dispute be brought before the commission regarding collocation in the period prior to the determination of these guidelines, the commission shall base its judgement on the tentative perspective laid out in this consultation document.

8. The present consultation document is submitted to you within the scope of this

4_{Communication from the Commission: “Unbundled Access}

to the Local Loop: Enabling the competitive provision of a full range of electronic communications services including broadband multimedia and high-speed Internet”, 26 April 2000, Com(2000)237 final.

consultation procedure. The commission requests that you submit your written response to this document by October 30, 2000 at the latest. Furthermore, a consultation meeting shall take place on October 27, 2000, at which time parties may present there positions verbally. This consultation document, and more generally this procedure, offers operators the opportunity to put forward their views in relation to a number of aspects which should be taken into account by the commission regarding collocation to benefit access to the local loop. These aspects are related to, among other things, the forms of collocation which may be relevant to operators, the facilities required to this end, the associated costs and the

conditions under which collocation must be made available.

9. The commission remarks here that a definitive establishment of its position may obviously be influenced by the contributions during this consultation procedure, but also by further developments within European legislation. The European Commission has, on July 12, 2000, published a proposal for a ‘Regulation’5

(hereafter: ‘the Regulation’) which, if passed by the European Parliament, may be consequential for national policy regarding unbundling. Furthermore, the commission remarks that the various European supervisors in the so-called ‘International Regulators Group’ are holding discussions in order to achieve harmonisation of their policy regarding, among other things, unbundling and collocation. The positions taken by the commission in this document should be viewed accordingly as provisional positions.

5_{Proposal for a Regulation of the European Parliament and}

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2 The legal framework

10. The following paragraphs discuss both the European legislation and the Dutch legislation and regulations regarding the present issue. They shall also indicate the general premises used by the commission here.

2.1 The European framework

11. The principle of open access to

telecommunication networks, the so-called ‘Open Network Provision’ is the foundation of European telecommunication regulations. In the European Parliament and Council’s directive dated June 30, 1997 concerning interconnection in the field of telecommunication (hereafter: ‘the Interconnection directive’)6_{, in which this} principle of open access is worked out in more detail; “in order to stimulate development of new types of telecommunications services, it is important to encourage new forms of

interconnection and special network access at points other than the network termination points offered to the majority of end-users.” 12. The ONP voice directive7_{, as well as the} revised version of it8_{, determine further that} operators of fixed voice telephone networks and fixed telephone services with significant market power must honour any reasonable request for special access at a cost-based and entirely disaggregated tariff. This directive states, in

6_{Directive 97/33/EC of the European Parliament and of the}

Council of June 30, 1997 on interconnection in Telecommunications with regard to ensuring universal service and interoperability through application of the principles of Open Network Provision (ONP). Official Journal of the European Community, No. 199/32.

7_{‘Directive 95/62/EC of the European Parliament and of}

the Council of December 13, 1995 on the application of “Open Network Provision” (ONP) to voice telephony’, Official Journal of the European Community, No. L 321/6.

8_{Directive 98/10/EC of the European Parliament and of the}

Council of February 26, 1998 on the application of open network provision (ONP) to voice telephony and on universal service for telecommunications in a competitive environment, Official Journal of the European Community, No.L 101/24.

Article 16: “Organisations with significant market power in the provision of fixed public telephone networks deal with reasonable requests (… ) for access to the fixed public telephone network at network termination points other than the commonly provided network termination points (… )”. Furthermore, these operators should take into account the principle of non-discrimination. This entails that such operators should maintain the same terms and conditions for the use of any form of special access towards other operators of the same generally available telecommunication services in the same circumstances. Operators with significant market power should provide special access to other organisations under the same terms and of the same quality as those provided for their own services or services of their subsidiaries or partners.

13. The revised ONP voice directive further states that, in the field of special access, the national regulatory bodies may, at any time, employ measures of their own accord if justifiable in order to safeguard competition and/or the interoperability of services. These bodies can also employ measures, if requested by either (contractual) party, to establish non-discriminatory conditions if reasonable and fair towards both parties.

14. Article 11 of the Interconnection directive states that agreements for collocation or facility sharing shall normally be a matter for

commercial and technical agreement between the parties concerned, and therefore should be a result of commercial negotiation. The national regulatory authority may intervene to resolve disputes.

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4 telecommunication markets are still

characterised by asymmetrical relationships. After the European Commission laid out its position in a ‘Working Document’9_{, (hereafter:} ‘the Working Document’), published in April 2000, and in the previously cited

Recommendation and Communication concerning the unbundling of the connection network. The viewpoints stated in these publications are further consolidated by the announcement that a legal obligation would be included in the coming regulatory framework. Since then, it has become clear to the European Commission that it is improbable that

non-binding measures would achieve the desired effect of unbundling of the local loop from December 31, 2000. Therefore, it published the aforementioned Regulation proposal in July 2000. Such a Regulation shall, if brought to vote and passed in the European Parliament and Council later this year, have almost immediate effect, as it does not need to be implemented in the national legislation first.

16. The European Commission states, in the Working Document: “While commercial

negotiation is the preferred method for reaching agreement on the price of local loop access, experience shows that in most cases regulatory intervention is necessary. The lack of

competition in this area means that it is

appropriate for the national regulatory authority (NRA) to impose obligations for pricing to be based on specific principles and methods in order to achieve efficient competition and provide predictability to market players.” 17. In the Recommendation, the European Commission gives further explanation of the role it views as reserved for the national supervisors: “In applying the principle of non-discrimination imposed on notified operators under Community law, it is recommended that national regulatory authorities ensure that a notified operator provides its competitors with the same facilities as those that it provides to itself or to its associated companies, and with the same

9_{‘DG Information Society Working Document: Unbundled}

access to the local loop’, 9 February 2000, INFSO A/1/

conditions and time-scales. This applies in particular to the roll-out of new services in the local access network, access to unbundled local loops, availability of collocation space, provision of leased transmission capacity for access to collocation sites, ordering, provisioning, quality and maintenance procedures.”

18. In the Communication, the European

Commission further states, as mentioned before, ”To be effective, providing rights for unbundled access to the local loop must be accompanied by provision of rights for collocation. National regulatory authorities need to take steps to ensure that third parties that are granted unbundled access to local loops are also able to collocate equipment on the premises of the local loop operator”.

19. As previously stated, the European Commission has elaborated further, and more forcefully, on its position in its proposal for the Regulation. In this proposal it states, among other things: “Although commercial

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2.2 Dutch legislation and regulations

21. In Article 6.9 of the TA, the obligation to comply with all reasonable requests for special access is imposed on operators of fixed and mobile public telephone networks and fixed and mobile public telephone services, as well as operators of rental lines with significant market power. Should a party fail to reach agreement with KPN Telecom, the commission can, on the grounds of Article 6.3 of the TA, settle the dispute by establishing the regulations valid between the two parties, at the request of one or both of the parties. On the grounds of Article 20.1, first paragraph of the TA, KPN and its subsidiaries are regarded as an operator with significant market power, insofar as they are operator of a fixed public telephone network, a fixed public telephone service and leased lines in the Netherlands.

22. If a reasonable request for special access is made, the possibility of collocation may form an essential part. Therefore, KPN Telecom, as a party with significant power in the market for fixed public telephone networks, fixed public telephone services and leased lines, must honour a reasonable request for special access, also when collocation is concerned, on the grounds of Article 6.9 of the TA. In any case, this conforms with the ‘Interconnection

Guideline’ published by the Minister of Transport and Public Works on May 29, 1997, in which is stated with regard to collocation that KPN may not refuse a reasonable request.

23. The operators with significant market power provide this special access to other operators of public telecommunication services and public telecommunication networks that request special access, while taking into account the principle of non-discrimination. KPN Telecom must provide other operators with this service under equal conditions under equal

circumstances, as described in Article 6.5, under a) of the TA, and under equal conditions as those which under equal circumstances applicable for itself or its subsidiaries, as described in Article 6.5, under b) of the TA.

24. Operators of fixed public telephone networks or fixed public telephone services with

significant market power should also, regarding requests for special access by those providing public telecommunication services within or outside the Netherlands, take into account the principles of cost-oriented and unbundled tariffs. The operators must ensure that the tariffs for special access are set in a transparent manner and based on costs. Furthermore, the tariffs must be disaggregated adequately. According to the Explanatory Memorandum to the TA, the tariffs and conditions for special access must be disaggregated in such a way that parties desiring special access may determine which parts they wish to purchase and which parts they wish to provide themselves. On the grounds of the Interconnection Directive, and also of the Interconnection Guideline, the tariffs should be disaggregated sufficiently to ensure that an applicant is not required to pay for that which is not strictly related to the requested service. In accordance with this directive, the obligation to itemisation applies to both network and service elements.

25. The legal framework outlined above is further elaborated upon by the commission in its ‘Guidelines concerning unbundled access to the local loop (“MDF access”)’ dated March 12, 1999, and applied during, among others, a judgement resulting from a complaint by Devricon International dated July 28, 1999, and in its aforementioned Provisional Decision concerning a dispute between Cistron Telecom B.V. and Koninklijke KPN/KPN Telecom.

2.3 General premises of the commission

26. The commission maintains the following premises in this consultation document. These may follow on directly from the above, or they may be elaborated upon further in the following paragraphs.

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6 is for KPN Telecom to prove that a request is

unreasonable.

• Collocation for the benefit of forms of access to the local loop can form an essential part of a request for special access.

• When evaluating the reasonableness of a request for special access, KPN Telecom should include realistic alternatives, also for collocation.

• When facilitating collocation, KPN must maintain the principles of

non-discrimination, transparency and cost-orientation.

• The commission recognises that there may be a shortage of the facilities necessary for collocation. Insofar as this may cause a particular request to be seen as

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3 Access to the local loop and collocation

The following paragraphs shall discuss the

various forms of access to the local loop and the various forms of collocation.

3.1 Forms of access to the local loop

27. The introduction stated that various forms of access to the local loop can be distinguished. With regard to this, the European Commission distinguishes between three forms of use of the local access network: complete unbundling of the local loop (or: ‘MDF access’), shared use of the local loop (or: ‘shared access’) and so-called ‘high speed bit stream access’.

3.1.1 Complete unbundling of the local loop 28. A first form of access to the local loop involves complete unbundling of the local loop. In this case a new operator accesses the

connection (in this case the double copper wire) between the end-user and the main distributor (the so-called ‘Main Distribution Frame’ or MDF) in the local exchange. By taking over the actual operation of the connection, new operators can provide advanced services. To enable this, the existing connection between the MDF and KPN Telecom’s exchange is re-configured for a specific end-user. New connections are then laid between the local loop’s connection to the MDF and the other operator’s equipment. This operator then has complete control over the entire local loop between the MDF and the end-user. In this way, the operator is capable of providing a complete package of services to the end-user, for instance from voice telephony to advanced broadband services. That, by complying with a request for special access to the local loop, actual administration and control is transferred to the new operator, does not change the fact that KPN Telecom remains the owner of the local loop.

3.1.2 Shared use of the local loop

29. A second form of access to the local loop involves the shared use of the local loop. In this form of unbundling, the one party, in this case KPN Telecom, continues to provide the

telephone service, while the new operator provides other services over the same copper pair but using his own equipment (for instance, broadband data services via xDSL modems). In such a situation, the low frequency telephone signals and the high frequency data signals can be separated, whereupon these signals can be treated and processed by different operators. Where shared access is used, the local loop remains a part of KPN Telecom’s network. 3.1.3 High speed bit stream access 30. A third form of access to the local loop involves so-called ‘high speed bit stream access’. ‘High speed bit stream access’ is the situation in which KPN Telecom, using its own modems, creates a broadband connection between the exchange and an end-user, and then consequently makes this connection available to third parties in order to provide broadband services. In practice, such connections are usually based on xDSL

technologies. In addition, it is conceivable that KPN Telecom also provides the transport of the data from another operator to a ‘higher’ point in the KPN network, where the data can then be transferred to the other operator. In the case of ‘high speed bit stream access’ no actual access to the copper cables in the connection network by a third party takes place. The commission understands that certain so-called ‘Internet Service Providers’ apply this form of shared access. In the commission’s opinion, this form of shared access to the local loop does not necessitate collocation, at least not in the local exchange. Therefore, this form of access shall not be referred to in the rest of this

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8

Question: Do you share the commission’s

opinion here?

Diagram: Forms of access to the local loop

End-user 2 Complete unbundling

End-user 1 No unbundling

End-user 3 Shared Access tot

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3.2 Forms of collocation

31. The European Commission defines

collocation as follows: “the provision of physical space and technical conditioning necessary to reasonably accommodate and connect the equipment of a new entrant to access the local loop.”

32. A form of collocation is always necessary for both unbundled access to the local loop and shared access to the local loop. This is due to the technical necessity of an uninterrupted connection between the end-user’s xDSL modem and the operator’s corresponding modem. In addition, both the range and the quality level of the service provision are related to the distance between the operator’s equipment and the Main Distribution Frame. As a result of this, it is of great importance to the operator that his equipment is situated as close as possible to the MDF, thus maximizing his range and the quality of his service.

33. One distinguishes in general between three forms of collocation, these being physical, adjacent and virtual collocation. The use of these terms is not equivocal, considering that different parties and organisations interpret these terms differently. This consultation document uses the following definitions of the various forms of collocation.

3.2.1 Physical collocation

34. One form of collocation is physical

collocation. Physical collocation exists when the new entrant sets up the ‘active’ equipment for the purpose of local loop access (or part of it), on the site of a KPN Telecom exchange building. From the MDF, the connections are passed through to this equipment. This active

equipment shall be used for the treatment and processing of the high frequency part of the spectrum, in order to support broadband data services in this way. The equipment can be set up in a space, which may be sealed off or only accessible to the operator. This space may be found in the exchange building or, for example,

in a so-called ‘portocabin’ located on the site of the exchange building. The remaining incoming and outgoing signalling to and from the operator’s location outside of the exchange can take place by means of a fibre optic connection. 3.2.2 Adjacent collocation

35. A second form of collocation is adjacent collocation. Adjacent (or ‘in-span’) collocation exists when the new operator situates his equipment not in or on the site of the exchange building, but in a space in the direct

surroundings of the exchange site. The choice of this type of collocation may be based directly on the specifications of the collocation request, or on the lack of a suitable location for physical collocation in or on the site of the exchange building. With this form of collocation it is necessary that the local loop can continue to the operator’s location without interruption. This form of collocation may, for example, be facilitated by creating a connection point at the exchange building, for instance in a

compartment construction on the exterior wall of the exchange building. Such a connection point may also be created, however, in the exchange building, or possibly in a ‘portocabin’ situated on the exchange’s site.

3.2.3 Virtual collocation

36. A third form of collocation is virtual collocation. This is a form of collocation in which the new operator’s equipment is situated in a space in the exchange building without this operator’s staff being able to access the

equipment. The equipment is then in fact operated by KPN Telecom staff. The commission views this form of collocation primarily as a specific operative form of physical collocation, the nature of which can be defined voluntarily by contractual parties.

Questions: Do you find the above

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10 prefer and under which conditions

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4 Basic facilities

37. In order to develop a form of service provision on the basis of collocation, the operator should have access to a number of facilities. The commission assumes that a minimum list of facilities needed for collocation can be made. Such minimal facilities are necessary in order to guarantee the possibility and safety of collocation. At the same time, such a list can prevent that KPN declares certain spaces unsuitable and/or unnecessarily increases the costs incurred while adapting spaces to suit this purpose. In cases of

reasonable requests, KPN Telecom must offer an operator such basic facilities. However, this does not discharge KPN Telecom from the obligation to evaluate individual requests for additional facilities on the basis of

reasonableness.

38. By basic facilities related to physical collocation, the commission imagines, for instance, space in which the operator can set up his own equipment, electrical facilities, a minimal floor load, earth connections, a tie cable between the main distribution frame and the so-called ‘Customer Distribution Frame’ (hereafter: CDF)10_{, and said CDF. By specific} basic facilities relating to adjacent collocation, the commission imagines for instance, a CDF, the space for a CDF and a tie cable between the main distribution frame and the CDF.

Questions: Which facilities should be

established as basic facilities for the different forms of collocation? To which specifications should, in your opinion, the various basic facilities comply? In its offer11_{, KPN has listed a certain range of} facilities it deems necessary for

collocation. Would you also react to the selection of facilities referred to by KPN Telecom in this offer?

10_{Also referred to as the ‘Services Interface Point’.} 11_{This offer may be viewed on KPN Telecom’s}

(http://www.kpn-telecom.nl/

9267249/standard_documents/index.html)

39. The selection of basic facilities is of great importance: after all, this determines the list of premises which KPN Telecom must use when deciding whether a particular (space in a) exchange building can be considered.

40. The commission considers it reasonable that KPN Telecom gives shape to these basic facilities by means of a standard configuration according to which operators may order and purchase from them. The use of such a configuration can promote a rapid development of services. Given the European commission’s recent position, as depicted in the Regulation proposal, it is conceivable that KPN Telecom’s presentation of such a standard configuration may be required explicitly by European regulations from 31 December 2000 onwards.

41. In the commission’s opinion, the operator may determine in principle how he wishes to make use of the basic facilities. Thus, it is possible for an operator to decide whether he, in the case of physical collocation, wishes to opt for an enclosed space for his equipment. After all, it is for the operator to decide which level of technical integrity, and thereby service

provision, he wishes to employ. An operator who wishes to install his equipment in a cage would then be bound to cover the supplementary costs thereof. This would in fact mean that collocation in a cageless variant would be typified as a minimal facility.

42. In more general terms, the commission’s provisional opinion is that it is for the operator to decide whether he wishes to share the use of certain facilities with other operators. This may concern basic facilities or other additional facilities. The commission imagines here the sharing of space, cabinets or transmission capacity.

Questions: Are these tentative

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12 define the content of the required

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5 Reasons for refusal of access

43. In the ‘Guidelines concerning unbundled access to the local loop’, the commission has stated that a request for (special) access to the local loop is reasonable as long as two

preconditions are fulfilled:

1) the access is essential for the requesting party to compete in the telecommunications market. In that case, refusing access would result in impeding access to the end user or rendering this access considerably and unavoidably uneconomical. If the requesting party is demonstrably (by the one refusing access) able to connect a certain client directly to its own infrastructure or via an alternative infrastructure and/or equivalent wireless connection, in an economically justified way, refusal of access to the local line is, in principle, allowed; and

2) sufficient access capacity is available. In principle, the Commission’s starting point is that sufficient capacity will be available on main distribution frames where the

requesting party is one of the first parties to apply for access. This may, for instance, not be the case in the following instances. KPN Telecom could demonstrate that no suitable access lines are available anymore due to the fact that a number of other parties already use special access, or the service provision of the requesting party would inevitably lead to cross-talk or another irreparable violation of the quality of the services already provided by all other parties via that main distribution frame. 44. In the commission’s opinion, a request for collocation related to access to the local loop is, in line with what is stated in the guidelines, not beforehand unreasonable. It considers itself supported in this view by the fact that KPN Telecom provides services itself through new forms of access to the local loop, under the name ‘MXstream’. Moreover, the commission also remarks that, given the characteristics of the services to be provided on the basis of access to the local loop, no alternative to

collocation is available, except a complete duplication of the local loop. Such an

alternative cannot, in the commission’s opinion, be achieved in an economically responsible manner.

45. In relation to the second point of the above mentioned preconditions, the commission remarks that KPN Telecom is bound, in the case of its refusal of a request for collocation in a particular exchange building, to prove that there is no access capacity, should no (or insufficient) facilities necessary for collocation purposes be available or attainable. Analogous to the aforementioned guidelines, the

commission remarks that, therefore, in principle only an appeal on insufficient capacity will be viewed as reasonable grounds for refusal. 46. In relation to this, the commission remarks that KPN Telecom may not be disproportionately inhibited in the development of its normal service provision by the wishes of other operators to collocate. Regarding this development of normal service provision, the commission imagines for instance the replacement of exchanges, for which (temporarily) extra space in an exchange building may be required. The possibility of reservation of space by KPN Telecom does not therefore seem unreasonable to the commission, in principle. However, the commission would add that such a reservation may not involve facilities required on behalf of the MDF access service provision of KPN Telecom or its subsidiaries.

Question: The commission requests that

you consider the form and extent of any reservation possibilities for KPN

Telecom.

5.1 Availability of facilities

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14 necessary for collocation are easily available or

attainable.

48. The freedom of an operator to determine the range of facilities available to him, does not, in the commission’s opinion, hinder the fact that the deliberately inefficient use of facilities by an operator, which makes other operators’ service provision from a certain location impossible, must be prevented.

Question: By which means can such

inefficient use of facilities be avoided? 5.1.1 Space for physical collocation

49. In the commission’s opinion, KPN Telecom is bound, in the case of an investigation into the possibilities of physical collocation, to take into consideration all available spaces in an

exchange building, and to thereby examine whether (parts of) these spaces are suitable, or can be made suitable, for physical collocation. 50. In relation to this, the commission also points to the discussion between KPN Telecom and other operators during recent months in which KPN Telecom has taken the position that, for the purpose of its MDF access service provision, it uses space other than that used by other operators and that certain spaces in an exchange building are not made available for collocation by other operators. However, in the commission’s opinion, in principle, any space in an exchange building can be made available for collocation.

51. KPN Telecom must, in its investigation, also take into consideration spaces in which

equipment is still situated though no longer in use, as well as spaces which are used

inefficiently and where, without endangering the integrity of KPN Telecom’s service provision, extra space could be realised for the purpose of collocation and at costs to be met by a

collocating party. In the commission’s opinion, a similar obligation to clearance applies to spaces used for the purpose of physical collocation, which have not been used by the operator for a certain period of time. Here, for

the time being, the commission would consider a period of three months.

52. As stated earlier, KPN Telecom should also take into consideration possible alternatives. In the commission’s opinion KPN Telecom, should it reach the conclusion that collocation cannot be realised in the exchange, should also examine the possibility of placing external spaces, for instance in the form of so-called ‘portocabins’, in which physical collocation would be possible.

53. Should one conclude, on the basis of a feasibility study, that no possibilities exist for physical collocation, the commission for the time being assumes that virtual collocation is still a reasonable alternative.

Question: What is your opinion on the

mutual obligation to clearance? How would you define ‘inefficient use’ in this case? What is your opinion on the reasonable period of time set by the commission regarding the obligation to clearance? Are these ‘portocabins’ a realistic alternative to physical collocation in your opinion? What is your position on the possibility of virtual collocation? Should KPN Telecom investigate the possibility of virtual collocation as an alternative? 5.1.2 Space for adjacent collocation

54. The commission is, for the time being, of the opinion that the probability of there being no available space in an exchange for a connection point for the purpose of adjacent collocation is very low. Should this however be the case, then KPN Telecom should offer here the possibility of placing so-called ‘portocabins’ also.

Question: Do you share the

commission’s opinion here? What is your opinion on the availability of space for the realisation of adjacent

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5.1.3 Space on the main distribution frame 55. KPN Telecom claims that the lack of space on the main distribution frame at a large number of locations may cause bottlenecks in the

development of local loop access-based forms of service provision by other operators. For the time being, the commission is of the opinion that a possible expansion of the main

distribution frame for the purpose of facilitating third party access to the local loop should be viewed as an investment necessary for

collocation purposes, the costs of which should again be charged to collocating parties.

Questions: The commission would

hereby like to invite parties to discuss their reactions to KPN Telecom’s claim. Moreover, the commission requests that you consider the tentative position it has taken.

5.1.4 Other necessary facilities

Question: Do you already anticipate a

capacity problem with regard to one or more of the (not yet described above) facilities on the basis of the basic facilities you mentioned before ?

5.2 Allocation

56. In principle, KPN Telecom is obligated to allocate requested facilities on the basis of the “first come, first served” principle, in which process orders, not requests for information,

determine priority. Utilising this principle is in line with the legal obligation applying to KPN Telecom to respond to reasonable individual requests for special access. For that matter, processing requests on the ‘first come, first served’ basis does not mean that delivery should, by definition, take place in the same order. All this has to do with the specific nature of a request from a party placing an order. 57. It is conceivable that a new opportunity for collocation, for instance in the form of a new central building, becomes available at a certain time. In such a case it may occur that when that facility becomes available, there will be more applicants than places available. In principle, for such a ‘get-in moment’ a different allocation than the ‘first come, first served’ principle is plausible. The commission does not in principle reject a verifiable method of allocation by lottery under those conditions.

58. In such a lottery, the order a party places must indeed be the guiding factor; for example, requests for physical and adjacent collocation must all be processed separately. The

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6 Transparency and non-discrimination

59. As already mentioned above, specific legal obligations, such as cost orientation,

transparency and non-discrimination apply to KPN Telecom, as a party with significant power in several relevant markets. The European Commission has also stated in its

Recommendation that “national regulatory authorities ensure that collocation space is offered to competitors in a way that is transparent, fair and non-discriminatory”.

6.1 The importance of transparency

60. In a general sense it applies that KPN Telecom must provide, by means of a transparent procedure, clear insight into the conditions and terms under which other parties can purchase services. If transparency is observed in relation to procedures, conditions and terms, parties can trust that facilities for collocation will be provided

non-discriminatorily, negotiations on collocation can proceed faster and disputes can be avoided. In addition, it is also true that a transparent procedure can guarantee that new providers do not fall behind the competition when

developing their services as a result of a possible information deficit.

61. In this context, the commission emphasises that KPN Telecom has an information obligation. After all, this party has potentially an important lead in information in comparison to other providers, merely because it has complete grasp of the state of affairs in its exchanges, or because it can easily obtain this understanding.

6.2 The importance of non-discrimination

62. The meaning of the non-discrimination principle is that equal conditions apply under equal circumstances, for KPN Telecom and its affiliates as well as for other providers. 63. Section 50 already referred to the fact that KPN Telecom is of the opinion that it may use,

for its own MDF-access service provision, other areas in an exchange building than are made available to other providers for collocation in order to provide similar types of services. In reality, this would mean that KPN Telecom would not experience any hindrance from the possible scarcity of certain basic facilities when

conducting its business, while other providers could possibly be confronted with this

hindrance.

64. As stated above, the commission is of the opinion that each space in an exchange building must in principle be considered for collocation. The difference in treatment KPN Telecom has introduced between itself and other providers is in violation of the non-discrimination principle.

Questions: Must the special position,

which KPN has created for itself in the past be corrected, in your opinion, by means of additional requirements and/or obligations? If so, which requirements and/or obligations would you consider in this context?

6.3 The procedure

65. In the commission’s opinion, the procedure for ordering collocation must, in any case, meet the following requirements:

1. A priori, and independently from a potential order, a provider must have sufficient information available in order to be able to determine if a form of collocation with regard to a form of access tot the local loop is of interest and/or necessary. A provider must have information available on the question of to what extent and at which costs there is the potential in or next to a certain exchange building to place an order for basic facilities. If this information is known, a provider can then proceed to place an order if it so desires.

2. Should a provider consider ordering

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for a feasibility study. Consequently, KPN Telecom will do a feasibility study within a reasonable period on the question of whether the requested additional facilities can be realised at the requested location and report this, stating the reasons and costs. Based on this report, a provider can consequently decide if it wants to proceed with ordering additional facilities.

3. There must be a possibility for the provider to verify it.

4. KPN Telecom must include a transparent, simple and flexible ordering procedure in its offer.

This procedure is elaborated in more detail in the next sections.

6.3.1 Initial information

66. Within the framework of creating a so-called ‘level playing field’ in relation to the provision of information, a provider who is not yet developing any services via a form of access to the local loop, must have sufficient information available in order to be considered capable of submitting a reasonable request. In addition, it is also important that this provider has

sufficient information available in order to verify whether the development of new services, whether regionally restricted or not, could be interesting to this provider from a business-economic perspective.

67. It is important, in line with section 6.5 of the TA, that parties have sufficient information available in advance in order to be able to make a well-informed decision on the question of whether they would like to submit a request for collocation for a form of access to the local loop. Parties must also be able to be informed on the general conditions and terms with regard to collocation. This information must be made available by KPN Telecom to other parties in a transparent manner, for example, in a reference offer. It would also be expedient in this

development phase that the general conditions and terms be made available quickly and easily in a transparent manner to those interested, for instance via the KPN Telecom website.

68. In order to be able to arrive at a well-informed choice, however, a provider must also have information available on the locations of KPN Telecom exchange buildings and

information on the size of the group of end users who can be reached from such a building. In order to obtain insight into the potential customer base, which could be reached via a certain main distribution frame, information is required about the service area of this main distribution frame. This information is necessary in order to make a cost/benefit analysis in advance with regard to the investment that may be necessary. In the provisional opinion of the commission, KPN Telecom should, at the providers’ request, make available at least one list of local exchanges, a list of main

distribution frames and the associated postal code areas available.

69. In addition, the commission is as yet of the opinion, that providers must also at this time in a procedure have information available with regard to the availability and/or feasibility of collocation facilities in the different exchange buildings. The commission can imagine that KPN Telecom, in anticipation of possible requests for special access to specific exchange buildings, would have to study the availability and/or the feasibility of basic facilities in or near its exchange buildings, and would also make this information available to other providers upon request. If KPN Telecom does not see any possibility of effecting a certain form of collocation at a certain location, it must state its reasons for this.

70. On the basis of information given, a provider can then conclude that sufficient facilities are available in a certain exchange building in order to effectuate his request for collocation. Next, this provider may proceed with ordering basic facilities, if it so desires.

Questions: The commission asks you to

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18 exchanges, all main distribution frames

and associated postal code areas. It also asks you to respond to the statement that KPN Telecom must provide information in relation to the availability and/or feasibility of basic facilities at certain locations. Finally, the commission asks you to explore in more detail the question of whether KPN Telecom should carry out a study on the availability and/or feasibility of basic facilities in all its exchange buildings now and independent of any requests. Does the above mentioned procedure supply a provider with sufficient information to proceed with ordering basic facilities?

6.3.2 The feasibility study

71. When a provider considers ordering additional facilities to the basic facilities, it should be able to submit a request to KPN Telecom for a feasibility study at any time. The objective of such a feasibility study is to give the provider a definite answer to the possibility and the costs of providing the requested additional facilities. If KPN Telecom does not see any opportunity of providing the additional

facilities, it must state its reasons for this in its reports. Providers must offer adequate

information, for KPN Telecom to use during this feasibility study.

72. KPN Telecom must make the results of the requested feasibility study, in report form, available to a provider within one month, so that it can decide, on the basis of the

information provided, whether it will place an order or not.

Question: Do you share the opinion of

the commission with regard to the feasibility study? How would you interpret the concept ‘adequate information’ in this concept? What is your opinion about the deadline, which the commission has set in this context?

73. When making a business plan, parties should be able to take into account any drastic changes at a certain location. Therefore, KPN Telecom must report not only in its reports, but also in its initial information, on radical changes planned in or on the premises of exchange buildings, which could have consequences for collocating parties. Information on matters such as changes to or discontinuation of locations is relevant for a provider in order to gain insight into the financial recovery period per location, and with this of crucial importance for deciding on investments.

6.3.3 Verification

74. In the opinion of the commission, within the framework of the obligation of transparency, it is of great importance that providers are able to verify both the initial information and the results of a KPN Telecom feasibility study. In this context, it seems reasonable to the commission that providers can, in advance, request a so-called ‘walk-through’ procedure from KPN Telecom with regard to one or more locations, during which providers can verify whether they share KPN Telecom’s conclusions. The

commission can imagine that a so-called ‘trusted third party’ could be charged with mediating in disputes, which could possibly ensue from a ‘walk-through’.

Question: How should, in your opinion,

a ‘walk-through’ procedure be given shape? Should such a procedure take place periodically or upon request? In which manner should it be possible to substantiate the idea of a ‘trusted third party’?

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location where a party is already collocating. Regulations related to the provision of information surrounding the ordering and delivery process can be included in a so-called reference offer.

76. In the commission’s opinion, a transparent, simple and flexible ordering procedure must be included in a reference offer. The commission refers in this context to its ‘Decision with regard to the OPTA assessment of the KPN Telecom B.V. reference-interconnection offer’ dated July 28, 2000.

77. The commission is of the opinion that facilities for collocation must, after an order has been placed, be delivered within a reasonable period. The commission considers, in advance, a period of three months for the facilities with regard to physical collocation and a period of one month for facilities with regard to adjoining collocation to be adequate.

Question: In your opinion, which form

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7 Determination of tariffs and cost allocation principles

78. When facilitating special access, and thus also when facilitating collocation, KPN Telecom must, as previously indicated, use the principle of cost orientation. This means that KPN Telecom may charge the costs it incurred facilitating collocation, in a non-discriminatory manner to itself and other providers.

79. Five main groups of costs can be

differentiated, namely: (1-) the costs related to realising the basic facilities (2-) the costs related to realising additional facilities, (3-) the costs related to the rental of the space needed for collocation, (4-) electricity, and (5-) the costs related to the provision information. In the following sections these different cost groups will be explored in more detail and will be indicated in which manner and according to which principles of determining tariffs and cost allocation these costs may be charged by KPN Telecom to itself and other providers, in the provisional opinion of the commission.

7.1 Application of the non-discrimination principle

80. In the past years KPN Telecom has incurred costs for setting up certain areas in exchange buildings and the installation of certain equipment in order to provide its own xDSL service. For the time being, the commission considers it plausible that KPN Telecom has charged its end user for these costs, in all probability the end users of public telephone services. In addition, KPN Telecom has set up areas “for itself” for this form of collocation other than areas that at this moment are being prepared for facilitating collocation of other providers. The commission has already indicated above that KPN Telecom also must examine whether these other areas can be used for collocation by other providers.

81. Given the fact that (1-) KPN Telecom has up to now used facilities other than ones used by new providers, and (2-) these facilities did not

need any adaptations for placing the equipment necessary for providing MDF-access service, the commission considers it likely that due to this fact the costs which KPN Telecom charges itself are lower than the costs which KPN Telecom charges other providers. The latter is in violation of the non-discrimination principle. Therefore KPN Telecom must pass on the cost advantages it enjoys as a consequence of the special position it has, to the providers who purchase collocation. The application of the non-discrimination principle must therefore logically also have consequences for passing on costs to end users of KPN Telecom itself. For the time being, the commission is of the opinion that the non-discriminatory costs which KPN Telecom must charge itself (including the same rate of return as charged to others) must be passed on to the end users of the xDSL service, not to the end users of the public phone service.

Question: What is your opinion of the

commission’s application of the non-discrimination principle?

7.2 Costs related to realisation of the basic facilities

82. As indicated above, in the commission’s opinion, KPN Telecom is obligated to ensure basic facilities for collocation in the event of a reasonable request from another provider. In that case KPN Telecom must verify whether such facilities are present in or on the premises of a certain exchange building, or if they could be realised there. If such facilities are lacking entirely or partially, but could be realised, KPN Telecom must incur the costs in order to create these facilities.

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that KPN Telecom may also charge the directly attributable portion of the joined and common costs to the providers for realising such facilities, and additionally a reasonable rate of return.12

Question: What is your response to this

provisional opinion of the commission ? 84. The commission observes that a number of different options are conceivable for the actual allocation of the costs mentioned above. These models are generated from a number of choices that can be made in relation to the level of cost calculation (a national average or per exchange building), the manner of determining tariffs (one-time or periodical), the manner of dealing with ‘non-occupancy’ and the cost allocation principles (per square meter or via a different code).

7.2.1 The level of cost determination

85. The costs for realising the basic facilities will differ from one exchange building to the next. Each exchange is different and where, for example, in one exchange building no or barely any adaptations are necessary to prepare for collocation, in another exchange building an area may have to be drastically converted. With these differences in costs, the determination of costs within this framework can be handled in two different ways, in the commission’s opinion. 86. The first possibility is to treat the specific costs for realising the basic facilities in a certain exchange building as the basis for pricing. An

12_{As you know, the commission is planning to start a}

consultation procedure about a cost allocation regimen for interconnection and special access tariffs, on a short term. After this consultation the cost allocation regulations will possibly be revised. Although the focus will mostly be directed toward traffic tariffs, the results of the

consultation may also have consequences for determining the costs of basic facilities. The effect on these types of costs is expected to be limited. For the time being, the commission is of the opinion that these especially concern current costs, which must be able to be set in a fairly unambiguous manner. The final tariffs can, however, be influenced by a number of choices to be made with regard to the method of allocation, allocation principles, etc.

exchange building in which no or only a few adaptations have to be made will in that case incur lower costs on a new provider. The new provider only pays the costs that are directly related to the necessary adaptations in the specific exchange building. Using such a method, however, has the disadvantage that it is not possible to set a standard price. Therefore this method creates uncertainty among the new providers.

87. A second possibility is to use a national average as the basis for calculating costs related to realisation of collocation facilities. In that case, the new providers know in advance what they must pay for the minimum set-up of facilities in each exchange building. However, in that case a provider at a ‘cheap’ location

implicitly contributes to the facilities of another provider at an ‘expensive’ location. In addition, calculating the average costs for realising collocation facilities requires a number of assumptions. After all, such average costs must be determined before the adaptations are implemented at all exchanges. Since KPN Telecom, as indicated above, must be enabled to pass the actual costs incurred on to providers, the uncertainty associated with such

assumptions may lead to higher costs estimated in advance than if actual costs per exchange would be settled. Another disadvantage is that the principle of current costs is not always applicable due to that estimate. If, for example, an average price is set at the beginning of the year, it does not seem probable that this price will still reflect the current costs at the end of the year.

Question: Which basis for cost

determination would have your

preference: one based on specific costs per location, or a payment based on a national average?

7.2.2 Determining tariffs

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22 89. When a periodical tariff is chosen, for

example a monthly tariff, it is conceivable that a provider could, at a certain point in time, decide no longer to use the facilities realised on its behalf, without it being certain in advance that a different provider would (immediately) begin to use these facilities. In such a model, KPN Telecom, as it were, would partially carry the investment risk of the parties and should be able, in principle, to require compensation for this. This heightened uncertainty for KPN Telecom could possibly translate into higher costs for the providers involved. However, if the facilities are immediately taken into use by a (new) provider, the reasonability of the compensation mentioned above is cancelled. 90. In the event of a non-recurring tariff, the costs are charged to the collocating providers all at once. This is the method that is currently used by KPN Telecom in its offer. By charging the costs all at once, the risk of the investment decision does not lie with KPN Telecom but with the collocating provider. The initial investment costs of alternative providers are relatively high in the case of a non-recurring tariff. However, because of the interest that parties have so far expressed in collocation based on the current KPN Telecom conditions, the commission is not of the opinion that this way of passing on costs would be an obstacle for developing the services. Beyond that, a non-recurring tariff is more transparent, easier to implement and increases predictability.

Question: Which system of determining

the tariff would have your preference: a system based on periodical tariff or a system of non-recurring tariff? If you prefer a system of non-recurring tariffs could you indicate if, in your opinion, a possibility should exist for a provider which stops the collocation to pass on (part of its) costs to a provider which will collocate in its place?

7.2.3 ‘Costs of vacancy’

91. The facilities necessary for collocation must be able to be utilised efficiently. This means that the commission is of the opinion that, for the time being, it is reasonable to set up general collocation areas for physical collocation. Creating such areas will reduce both the time interval and the costs of hand-over of

collocation. A consequence of creating general collocation areas could be that a part of such an area would be (temporarily) vacant. For the time being, the commission still assumes that it should be possible for KPN Telecom to pass on such ‘vacancy costs’, at least partially, to collocating providers, including KPN Telecom itself.

92. Different forms are conceivable for this. The way those forms are interpreted is determined to a large extent by the choice made with regard to the level of cost determination and the form of tariff determination. At least four versions are conceivable, depending on the choice that was made between national average or specific cost determination on the one hand, and periodical or non-recurring tariffs on the other hand. 93. To illustrate this point: it would be possible to settle such costs in a national tariff, if a system of determining tariffs on the basis of a national average was opted for. If the option to settle these costs all at once is then selected, a calibration point must be determined on which an assumption is made for the forecasted utilisation of the basic facilities for example for one year. If there is a deviation from the prognosis during this year, a method to recalculate must be determined since it does not, in advance, seem reasonable that KPN recovers less, respectively more, of its actual costs.

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Question: In what way, in your opinion,

should the costs of ‘vacancy’ be dealt with? In what way should the ‘vacancy costs’ between providers which do not start their collocation at a certain location at the same time, in the event of a one-time passing on of costs, be settled? Can you also include in your response your answer to the questions related to sections 85 through 87, and 88 through 90, respectively?

7.2.4.Cost allocation principles

94. The principle for dividing the costs for realising the basic facilities between providers could be determined in a number of ways. For example, the costs could be converted into a price per square meter, the costs could be divided pro-rated over the (current number of) providers, or a different form of a combination of components from both systems could be opted for.

Question: Which principles or

combinations of principles would have your preference? Do you see any other possible allocation principles/systems? 7.2.5 ‘Non-recurring costs’

95. In addition to the topic collocation, this consultation document contains a number of opinions and questions concerning costs, which are specifically related to access to the

unbundled local loop. So far, the commission has not decided on the cost orientation of the non-recurring costs such as KPN Telecom currently uses. By bringing up these costs for discussion in the consultation procedure at hand, there is no reason to start up a separate procedure with regard to these costs.

96. In principle, the same considerations play a role with regard to such non-recurring costs as for the more general costs for realising basic facilities. On the other hand, the use of these network components can be specifically attributed to individual providers. For the time being, the commission is of the opinion that

KPN Telecom must use current costs with a reasonable rate of return when calculating these costs, and that the cost advantages KPN Telecom itself enjoys must also be passed on in these tariffs. Also here the question is whether a system of periodical or one-off costs should be opted for.

Question: Which system of passing on

the non-recurring costs would be your preference: a system of passing on costs periodically or a system of passing them on all at once? The commission also would like to hear your substantiated opinion about the non-recurring costs used by KPN Telecom related to

unbundled access to the local loop. The commission also asks you to explicitly explore the connection and

disconnection costs as proposed by KPN Telecom.

7.3 Costs related to the realisation of additional facilities

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24 99. If KPN is the implementing party, it is of

great importance that the collocating provider has a complete understanding of the costs and can inspect the relevant documentation, such as tenders and/or cost specifications. Therefore, KPN Telecom must provide such information within the framework of its report on the feasibility study. Should there be any dispute on the price of the additional facilities, the

provider must have the opportunity to have a countercheck done by a third party, after which the fairness of the prices can be determined. 100. For the time being, the commission is of the opinion that the costs of additional facilities must be charged to the provider directly and all at once. This way the provider will become the owner of these facilities and will thus also be responsible for removing such facilities when terminating its collocation agreement with KPN.

Question: The commission asks for your

response to the provisional standpoints taken by the commission in relation to the payment of the costs for additional facilities.

7.4 The rent of the space necessary for collocation

101. Space in an exchange has a value and the collocating operator, as well as KPN Telecom itself, must pay a cost-oriented tariff, which reflects this value. The height of this tariff depends on which principle is used for determining the value.

102. Applying the principles of cost orientation in force would lead to the use of tariffs related to book values. A consequence of this would be that no monthly rental tariff could be demanded for the space used in an exchange building which has been entirely written off. An

advantage of such a method would be that KPN Telecom is prevented from recovering its costs more than once. The commission, however, can also easily imagine that by setting the tariffs on the basis of this principle, the possibility exists that providers start stockpiling, which could increase the possible scarcity of facilities. A

disproportionately low rental price would also make adjoining versions of collocation less attractive and may promote inefficient use of space by providers.

103. The commission can imagine that more adequate stimuli would be given by using a different system, i.e. using the market value to determine the rental tariff. When using such a method, the rental prices of comparable objects, such as office buildings, could be decisive for KPN Telecom tariffs. An advantage of this system is that the tariff calculation based on a market value could be considerably more simple and objective than a calculation based on book value. The tariffs based on the market value could be differentiated geographically, if necessary. However, on the other hand, using the market value would enable KPN Telecom to recover its prior investments in its exchange buildings more than once. Therefore, the commission is of the opinion, for the time being, that deviating from the system now in use by using market values must also contain guarantees for allowing only the relevant investments to be expressed in the rental prices.

Questions: Do you prefer a calculation

of the rental price based on the book value of the space in an exchange building or based on the market value? If a system of market value were to be used, would your prefer a

geographically differentiated price setting, taking regional differences in market value into account, or would you prefer a national average? The

commission also asks you to respond to the periodical rental tariffs for physical and adjoining collocation as proposed by KPN Telecom.

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Question: Which costs, in your opinion,

should have to be calculated in the rental tariff?

7.5 Electricity

105. The costs of electricity must be based on the costs actually incurred. The commission does not consider it reasonable if KPN Telecom charges other providers a higher price for the electricity they use that the price it itself is charged by its energy provider.

7.6 Costs related to providing information

106. The commission recognises that costs could possibly be associated with the obligations for KPN Telecom to provide information. In this case the principle of cost orientation applies.

However, for the time being, the commission considers it in accordance with section 6.5 of the TA that KPN Telecom does not, or only after payment of an administrative remuneration, make the initial information described in sections 66 through 70 available to providers. 107. It must be possible to make an initial study in regard to any exchange building at any time. Based on this study, KPN must determine whether, and to which extent basic facilities can be realised in or near a certain exchange. Given the fact that the information ensuing from this study, independent of the question of which party initiates this initial study, is of interest to all parties which will collocate at a certain exchange building, the commission considers it reasonable, for the time being, that KPN handles these costs as part of the realisation of the basic facilities in the particular exchange building.

108. For the time being, the commission is of the opinion that the costs related to feasibility studies may be passed on by KPN Telecom to collocating providers. It has already been indicated above that a provider can also request a verification procedure if it is of the opinion that the KPN Telecom statement on the potential of realising basic facilities or additional facilities in a certain exchange

building is no longer accurate. If the parties come to the conclusion, based on this study, or based on a possible ‘walk-through’ procedure following the study, that there is indeed no potential, the provider would be charged the costs of the study. If, however, the parties conclude, based on this study or based on a possible ‘walk-through’ procedure following the study, that potential does indeed exist, the costs for the study could be charged to KPN Telecom.

Question: What is your opinion on the

Consultation Document “Collocation and non-recurring costs with regard to access to the local loop”