Wholesale Local Access and Wholesale Central Access

856 Pages·2016·13.51 MB·English

by  John Regan

Internal Use
Only

Market Reviews
Wholesale Local Access (WLA) provided at a
Fixed Location
Wholesale Central Access (WCA) provided at

a Fixed Location for Mass Market Products

Consultation and Draft Decision
Reference: ComReg 16/96
Date: 11/11/2016
WLA/WCA Market Review ComReg 16/96
Redacted Information
Please note that this is a non-confidential version of the Consultation. Certain
information within this Consultation has been redacted for reasons of confidentiality,
with such redactions indicated by the symbol .

Legal Disclaimer
This Consultation is not a binding legal document and does not contain legal,
commercial, financial, technical or other advice. The Commission for Communications
Regulation is not bound by it, nor does it necessarily set out the Commission’s final or
definitive position on particular matters. To the extent that there might be any
inconsistency between the contents of this document and the due exercise by it of its
functions and powers, and the carrying out by it of its duties and the achievement of
relevant objectives under law, such contents are without prejudice to the legal position
of the Commission for Communications Regulation. Inappropriate reliance ought not
therefore to be placed on the contents of this document.

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WLA/WCA Market Review ComReg 16/96
Contents
Executive Summary ................................................................................... 16
Introduction ................................................................................................ 33
Retail Market Trends and Developments .................................................. 50
Retail Markets Assessment ....................................................................... 72
Assessment of the WLA Market .............................................................. 152
Competition Analysis and Assessment of SMP in the WLA Market ........ 206
WLA Market Competition Problems and Impacts on Competition and
Consumers…… ............................................................................................. 241
Remedies for the WLA Market ................................................................ 256
Assessment of the Retail Broadband Market in the presence of WLA
Regulation……. ............................................................................................. 400
Assessment of the WCA Market .............................................................. 410
Competition Analysis and Assessment of SMP in the WCA Markets ..... 457
Competition Problems in the Regional WCA Market and Impacts on
Competition and Consumers ......................................................................... 486
Remedies for the WCA Market ................................................................ 495
Withdrawal of SMP and Remedies in the Urban WCA Market ................ 579
Regulatory Impact Assessment ............................................................... 581
Next Steps.. ............................................................................................. 624
Appendix: 1 WLA/WCA Market Research ................................................. 626
Appendix: 2 Summary of WLA/WCA Market Research ............................ 627
Appendix: 3 Broadband Offerings and Chain of Substitution Analysis ..... 684
Appendix: 4 Pricing of Retail Products that use LLU/VUA inputs ............. 730
Appendix: 5 WCA Geographic Market Assessment .................................. 735
Appendix: 6 Boundaries of the Urban WCA Market and Regional WCA
Market…………. ............................................................................................ 766
Appendix: 7 Critical Loss Test ................................................................... 769
Appendix: 8 WIK CATV Report ................................................................. 775
Appendix: 9 WIK GPON and TWDM GPON Report ................................. 776
Appendix: 10 Cartesian Report ................................................................... 777
Appendix: 11 Other criteria for SMP assessment ....................................... 778
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WLA/WCA Market Review ComReg 16/96
Appendix: 12 Scope of CEI Access ............................................................ 780
Appendix: 13 Consultation Questions ......................................................... 784
Appendix: 14 Wholesale Local Access: Draft Decision Instrument ............ 787
Appendix: 15 Wholesale Central Access: Draft Decision Instrument ......... 824

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WLA/WCA Market Review ComReg 16/96
Index of Tables
Table 1: Product characteristics of broadband provided over copper only network 76
Table 2: Overview of Product Characteristics 87
Table 3: Residential Respondent views on Intended use of Broadband access (Slide
29) 88
Table 4: Residential Respondent views on connected devices to various broadband
platforms (Slide 26) 89
Table 5: Views of Operator’s on Substitutability of Alternative Platforms for Copper
Network based broadband 101
Table 6: Extract from ComReg’s 2015 Mobile Coverage Assessment 114
Table 7: SIRO Rollout to date – Plan as at April 2016 [REDACTED] 167
Table 8: Estimation of residential retail prices for products based on Eircom’s LLU and
VUA inputs – excluding VAT 185
Table 9: Dilution Ratios - % increase in residential retail prices from SSNIP in
WLA 186
Table 10: Estimation of business retail prices for products based on LLU and VUA
inputs – excluding VAT 186
Table 11: Dilution Ratios - % increase in business retail prices from SSNIP in
WLA 187
Table 12: Market Shares in the WLA Market – Q1 2016 211
Table 13: Hypothetical Market Shares in WLA Market – Q1 2016 213
Table 14: Eircom’s regulated WLA prices 2007 - 2016 218
Table 15: Share of Total WLA subscriptions by customer February 2016
[REDACTED] 237
Table 16: No of Exchanges Unbundled by Service Providers and Retail Subscribers
Served 404
Table 17: Number of SPs (including Eircom) capable of providing broadband services
using own network inputs and/or WLA inputs by the Number of Exchanges,
Premises Covered and SP Market Share 407
Table 18: Estimation of residential retail prices for products based on CGA and NGA
Bitstream inputs – excluding VAT 430
Table 19: Dilution Ratios - % increase in residential retail prices from SSNIP in WCA –
excluding VAT 431
Table 20: Estimation of business retail prices for products based on LLU and VUA
inputs – excluding VAT 432
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WLA/WCA Market Review ComReg 16/96
Table 21: Dilution Ratios - % increase in business retail prices from SSNIP in WLA –
excluding VAT 432
Table 22: Market Shares – WCA market – wholesale only 450
Table 23: Primary Operator Market Shares 451
Table 24: Retail Market Shares (Absent regulation in the WCA Market) for Primary
Operators (Q1 2016) 452
Table 25: Application of Criteria for Assessing Competitive Conditions by Geographic
Area 454
Table 26: Market Shares, Regional WCA Market as at March 2016 462
Table 27: Market Shares, Urban WCA Market as at March 2016 463
Table 28: Share of WCA Purchases from Eircom in the Urban WCA Market Q1
2016 480
Table 29: Share of WCA Purchases from Eircom in the Regional WCA Market Q1 2016
481
Table 30: Exchange Area Relationships 553
Table 31: Digiweb Residential DSL Tariffs 685
Table 32: Digiweb Residential Fibre Broadband Tariffs 686
Table 33: Digiweb NGA Tariffs 687
Table 34: Digiweb Residential Satellite Tariffs 688
Table 35: Digiweb Other Residential Broadband packages 689
Table 36: Digiweb Business Packages – DSL and Fibre 690
Table 37: Digiweb Business Packages - Satellite 690
Table 38: Eircom Standalone Broadband 691
Table 39: Eircom FTTC Broadband with mobile, TV and Home Phone 692
Table 40: Eircom’s CGA broadband and phone bundles 693
Table 41: Eircom Broadband and phone 693
Table 42: Eircom TV, broadband and phone 694
Table 43: Eircom Mobile, broadband and phone 694
Table 44: Eircom TV, mobile, broadband and phone 695
Table 45: Eircom bundles with FTTH broadband 696
Table 46: Eircom bundles for Small and Medium Businesses 697
Table 47: Eircom standalone broadband packages for businesses 698
Table 48: Imagine FWA Residential Broadband Packages 699
Table 49: Imagine Contended Wireless Broadband Packages (Business) 700
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WLA/WCA Market Review ComReg 16/96
Table 50: Imagine FWA Broadband Package (Businesses) 700
Table 51: Imagine DSL Broadband Packages for Businesses 701
Table 52: Magnet Residential Broadband Packages (FTTC) 702
Table 53: Magnet Residential Broadband Packages (FTTH) 702
Table 54: Magnet Broadband Packages for Small Businesses 703
Table 55: Sky Standalone Residential Broadband Packages 704
Table 56: Virgin Media Residential Broadband Bundles 705
Table 57: Virgin Media Broadband for Businesses 706
Table 58: Vodafone Standalone/Phone Broadband Packages 707
Table 59: Vodafone FTTH Broadband Packages 708
Table 60: Vodafone Business Broadband Packages 709
Table 61: Vodafone Business Broadband – Phone and Broadband Packages
(Multiline) – Broadband component only 709
Table 62: Mobile Broadband Packages offered by Operator 710
Table 63: Meteor Prepay Mobile Broadband Packages 711
Table 64: Meteor Billpay Mobile Broadband Packages 712
Table 65: Three Prepay Mobile Broadband Packages 713
Table 66: Three Mobile Prepay Broadband Packages 715
Table 67: Three Bill pay Mobile Broadband Packages – SIM Only 715
Table 68: Three Bill pay Mobile Broadband Packages 716
Table 69: Three Business Mobile Broadband Packages 716
Table 70: Tesco Prepay Mobile Broadband Packages 717
Table 71: Tesco Bill pay Mobile Broadband Packages 717
Table 72: iD Mobile Prepay Broadband Packages 718
Table 73: iD Mobile Billpay Broadband Packages 718
Table 74: Eircom Billpay and Billpay SIM only Mobile Broadband Packages 719
Table 75: Vodafone Prepay Mobile Broadband Packages 720
Table 76: Vodafone Billpay Mobile Broadband Packages 720
Table 77: Vodafone Billpay Mobile Broadband Packages (continued) 721
Table 78 – Bundles underlying estimation of residential retail prices for products based
on LLU and VULA inputs 730
Table 79 – Estimation of residential retail prices for products based on LLU and VULA
inputs – excluding VAT 732
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WLA/WCA Market Review ComReg 16/96
Table 80 – Bundles underlying estimation of business retail prices for products based
on LLU and VULA inputs 733
Table 81 – Estimation of business retail prices for products based on LLU and VULA
inputs – excluding VAT 733
Table 82: Primary Operator Market Shares 751
Table 83: Number of Operators by Number of Exchanges and Premises Covered 757
Table 84: Virgin Media Cable Network Coverage by Exchange Area
[REDACTED] 757
Table 85: SIRO Rollout to date – Plan as at April 2016 [REDACTED] 759
Table 86: Application of Criteria for Assessing Competitive Conditions by Geographic
Area 762
Table 87: Retail Market Shares (Absent regulation in the WCA Market) for Primary
Operators (Q1 2016) 763
Table 88: Application of Criteria for Assessing Competitive Conditions by Geographic
Area 765
Table 89: WLA/WCA Prices and Retail Costs 772
Table 90: Estimates of Critical Loss for 5% SSNIP of WLA - Residential 773
Table 91: Estimates of Critical Loss for 10% SSNIP of WLA - Residential 773
Table 92: Estimates of Critical Loss for 5% SSNIP of WLA - Business 773
Table 93: Estimates of Critical Loss for 10% SSNIP of WLA - Business 773
Table 94: Estimates of Critical Loss for 5% SSNIP of WCA - Residential 774
Table 95: Estimates of Critical Loss for 10% SSNIP of WCA - Residential 774
Table 96: Estimates of Critical Loss for 5% SSNIP of WCA - Business 774
Table 97: Estimates of Critical Loss for 10% SSNIP of WCA - Business 774

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WLA/WCA Market Review ComReg 16/96
Index of Figures
Figure 1: Example of Typical WLA and WCA Provision 17
Figure 2: Example of Typical WLA and WCA Provision 36
Figure 3: Example of Typical WLA and WCA Provision 52
Figure 4: Relationship between WLA, WCA and Retail 53
Figure 5: Stylised Illustration of Eircom’s Network 54
Figure 6: Stylised Illustration of Eircom’s Network – MPOP at Exchange 54
Figure 7: Broadband Subscriptions by Platform 57
Figure 8: Subscription Market Share of Fixed Broadband Market 59
Figure 9: Broadband Subscriptions by Subscription Type 61
Figure 10: Fixed Broadband Subscriptions by Contracted Download Speeds 62
Figure 11: Fixed Broadband Subscriptions by Contracted Download Speeds and
Subscription Type 63
Figure 12: Broadband Subscriptions Q1 2005 – Q1 2016 64
Figure 13: Average Monthly Data Traffic per Subscription by Platform 66
Figure 14: Fixed Market Retail Subscriptions by Type, Q1 2012 – Q1 2016 67
Figure 15: Summary of SSNIP test for Residential Respondents in a Bundle 80
Figure 16: Summary of SSNIP test for Residential Respondents purchasing
Standalone Broadband 81
Figure 17: The NBP Intervention Area map 149
Figure 18: Comparison of wholesale broadband and LL services 178
Figure 19: Hypothetical Market Shares – WLA Market 193
Figure 20: Market Shares in the WLA Market – 2010-2015 212
Figure 21: Hypothetical Market Shares in the WLA Market – 2010-2015 214
Figure 22: Provision of Wholesale Bitstream Access 2013-2015 413
Figure 23: Access to Broadband at Home (Slide 11) 628
Figure 24: Reason for Not Having Broadband (Slide 12) 629
Figure 25: Means of Accessing Broadband at Home (Slide 22) 630
Figure 26: Why Use More than One Means of Accessing Broadband at Home? (Slide
23) 631
Figure 27: Most Often Means of Accessing Broadband at Home (Slide 24) 632
Figure 28: Devices Connected to Broadband Service (Slide 26) 632
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WLA/WCA Market Review ComReg 16/96
Figure 29: Main Mobile Broadband Supplier (Slide 34) 633
Figure 30: Household Daily Estimate of Time Spent – Primary Access Mode (Slide 27)
634
Figure 31: What is your Primary Broadband Access Used For? (Slide 29) 635
Figure 32: Knowledge of Claimed Maximum Download Speed (Slide 48) 636
Figure 33: What is Maximum Claimed Up To Download Speed x Access Type? (Slide
52) 637
Figure 34: Bundle Incidence of Broadband Service (Slide 56) 638
Figure 35: Bundle Type (Slide 59) 639
Figure 36: Reason for Unbundled Broadband (Slide 85) 640
Figure 37: Knowledge of Broadband Bundle Cost (Slide 62) 641
Figure 38: Typical Broadband Bundle Spend Per Month – Platform (Slide 65) 642
Figure 39: Knowledge of Broadband Cost (Non Bundle) (Slide 75) 643
Figure 40: Typical Broadband Spend per Month (Non Bundle) (Slide 79) 643
Figure 41: Currently in Contract with Broadband Service Provider? (Slide 91) 644
Figure 42: Minimum Contract Period of Broadband Service (Slide 93) 645
Figure 43: Length of Time with Current Broadband Supplier (Slide 96) 645
Figure 44: Incidence of Ever Switching Broadband Supplier at Home? (Slide 98) 646
Figure 45: Incidence of Ever Switching Broadband (Slide 100) 647
Figure 46: Incidence of Ever Switching Broadband (Slide 101) 647
Figure 47: Reason for Switching Broadband – (Platform) (Slide 105) 648
Figure 48: Likely Behaviour If Price of Broadband in Bundle Increase By €2 (Slide 109)
649
Figure 49: Likely Behaviour If Price of Broadband in Bundle Increase By €2 (Slide 110)
650
Figure 50: Behaviour Change If Price Broadband Increase By €2 in Bundle (Slide 111)
651
Figure 51: Likelihood of Making Change In Behaviour (Broadband Bundle Owners)
(Slide 114) 651
Figure 52: Broadband Type Likely Switch To (Slide 117) 652
Figure 53: Likely Behaviour If Price of Broadband Increased By €2 (Slide 122) 653
Figure 54: Behaviour Change If Price Broadband Increase By €2 (Slide 124) 654
Figure 55: Likelihood of Making Change In Behaviour (Broadband Bundle Owners)
(Slide 127) 655
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