Will Mandatory Video Wholesale for Netherlands Have U.S. Implications?

The Netherlands isn’t the United States, and countries have unique regulatory and business legacies that make head-to-head comparisons difficult. But UPC and Ziggo (News - Alert), the two largest Dutch cable operators, are meeting with potential third-party resellers under supervision of the regulator OPTA, preparatory to a new wholesale regime that likely would be a U.S. cable operator nightmare.

 

The Dutch operators will have to come up with a wholesale price proposal that allows third-parties to resell their analog basic tiers. Two companies, Youca and Tele2, have already expressed interest in doing so.

 

It isn’t clear how much a competitive threat to the cable companies the new resale requirement might be. In the Netherlands, 79.3 percent of households receive their radio and TV services from cable operators and the Opta plan is intended to create “price pressure” from new rivals.

 

If U.S. experience provides any guidance, competitors will find profit margins rather slim. But the ability to add entertainment video to voice and broadband access should allow residential competitors to compete more effectively in the triple-play business.

 

Royal KPN NV, the largest Dutch phone operator, and the cable companies won’t be given access to each other’s networks, Opta has said.

 

Regulatory winds are starting to blow. Whether trends in Europe or Southeast Asia will get traction in U.S. markets is not clear. But the “mandatory wholesale” issue will be raised as the Federal Communications Commission begins deliberations for a national U.S. broadband policy.