Press release 17 January 2008
Ministry of Enterprise, Energy and Communications

Decision on proposal to the Council on Legislation: "Functional separation for better broadband competition"

Today the Government decided on a proposal for consideration by the Council on Legislation, "Functional separation for better broadband competition", which is intended to improve competition in the broadband market.

"Improving competition in the broadband market will encourage a better range of broadband services and reasonable consumer prices for broadband services," says Minister for Communications Åsa Torstensson.

In the proposal that it is referring to the Council on Legislation for consideration, the Government proposes that the regulatory authority (the National Post and Telecom Agency) be given a further tool for tackling competition problems in the broadband market. In order to guarantee non-discrimination and transparency, it will be possible to oblige a telecommunications operator with SMP (significant market power) that delivers both wholesale and end-user services (a vertically integrated operator) in the markets for direct access to access networks (LLUB, local loop unbundling) and 'bitstream' access, to separate the services relating to administration, operation and provision of the network and necessary accessories for access from other services. This does not mean that ownership of the metallic access network will pass to the separated entity.

It is also proposed that the National Post and Telecom Agency be able to approve a voluntary proposal on functional separation from the operator. As long as this decision is in force no obligatory order for functional separation may be made.

It is to be possible to attach terms to the obligatory order to ensure the independence of the separated service. The terms may involve a requirement that the service be operated by an entity that is a separate legal person or that the operator´s influence over the separated entity be restricted in an equivalent manner by organisational measures. The provision allows scope for the National Post and Telecom Agency to order that the operator establish a function in the separated entity that has the internal task of ensuring that the obligatory order on functional separation be implemented and the obligation be complied with.

A decision on mandatory or voluntary functional separation may not be taken before a draft decision has been approved by the European Commission.

It is proposed that the new provisions enter into force on 1 July this year.

"The Government has made the assessment that despite current regulations, the competition problems in the broadband market are so great that a powerful new tool is needed to tackle them. We are choosing to do this now since distortion of competition in the dynamic and changeable broadband market hampers development to the disadvantage of consumers and threatens Sweden´s role as a leading IT nation," says Minister for Communications Åsa Torsensson.