During the summer, the CMT, the Spanish Regulator confirmed its earlier - temporary - ruling about its NGA policy. In doing so, it stands by its original position on the need for infrastructure investment driven competition but may end up offering this new market on a plate to the Spanish incumbent Telefonica.
The crux of the matter lies in the existing of a regulated bitstream offer. CMT has decided not to impose upon Telefonica the need to offer such access on the wholesale level, relying instead on a wholesale duct offer to promote infrastructure based competition. Telefonica is due to provide this offer to the market by September 18th.
This is good news for Telefonica, but carries significant risks for competition. Indeed, the Spanish market is one of the European markets where the incumbent has resisted the best to competitive pressure and it seems to me that even with the theoretically reduced costs of available ducting (and that's assuming that Telefonica plays the game with goodwill and honesty, which is of course possible but would put them in a whole different category than most incumbents anywhere) none of the existing ISPs competing with Telefonica on broadband really has the investment capacity to roll out FTTH.
CMT says it reserves the right to reintroduce bitstream as a remedy if alternative investment does not occur. But again, assuming Telefonica is as straightforward as possible about all this, such a measure could not be implemented before at least 2-3 years have passed. By then, Telefonica's positions will be firmly entranched and any newcomer would face an even tougher business model with lower take-ups.
Ultimately, CMT's plans for competition on next-generation access relies on the goodwill of Telefonica on truly opening its ducts to competition at a reasonable rate and on alternate investors capable of putting large amounts of money in next generation networks at the time of a credit-crunch. I'd say it's a very risky position.
Regulatory experts T-Regs have a good piece of the original decision here if you want a more in-depth analysis.
