Unlimited unmetered Internet access not yet possible

OPTA has held that WorldCom is partially right in a case which this telecommunications service provider had brought against KPN. Following two final rulings handed down by OPTA, we have taken a major step forward towards consumer Internet access for a flat tariff, that is to say, unmetered. However, owing to the shortfall of capacity in KPN’s fixed network, unmetered Internet access is not yet possible in an unlimited form. For this reason KPN is only required to provide WorldCom with so-called FRIACO services for consumers with an ISDN connection. In a letter addressed to the Secretary of State for Transport, Public Works and Water Management, OPTA has expressed its concern about the shortage of capacity in KPN’s network.

In a decision concerning the provision of FRIACO (Flat Tariff Internet Access Call Origination or, put another way, Internet access for a flat tariff) services, OPTA has ruled that within two weeks KPN is required to quote a tariff for which WorldCom can purchase capacity from it. Since WorldCom is now in a position to purchase ‘bulk’ instead of metered capacity, it would be a simple matter for it to offer consumers unmetered Internet access. In this respect, KPN would route Internet traffic through its exchange to the WorldCom network via a separate 06760 number.

In addition, OPTA has ruled that until 1 July 2001 KPN need only supply FRIACO services to WorldCom for those consumers that have an ISDN connection, because OPTA has well-founded doubts as to whether KPN’s fixed network will be able to transmit the potential sharp increase in data, which may occur as a result of the introduction of Internet access for a flat tariff. By no later than 1 March 2001 KPN is required to report to OPTA on what it believes the consequences could be, if the restriction of the purchase of FRIACO services to only those consumers who have an ISDN connection were to be lifted on 1 July 2001.

In the meantime OPTA has sent a letter to Mr De Vries, the Secretary of State for Transport, Public Works and Water Management. In it OPTA expresses its concern about the ongoing shortfall of capacity in the fixed network in the Netherlands. In this letter OPTA draws attention to the potential economic harm which the Netherlands may suffer if it cannot keep pace with developments in surrounding countries due to the shortfall of capacity in KPN’s fixed network.

Apart from this, on 4 November 2000 OPTA handed down a ruling concerning the supply of MIACO services (Metered Internet Access Call Origination services or, put another way, Internet access for a time-based tariff). KPN is required to give WorldCom the opportunity to obtain access to KPN’s network for a fixed price per metered unit, again via a 06760 number. Although KPN may bill WorldCom for each unit, it will however mean that the latter can sell unlimited Internet access to its customers for a flat tariff. The difference between the two services is that in the case of FRIACO the time that consumers access the Internet would be irrelevant to WorldCom. In the case of MIACO the longer consumers access the Internet, the more WorldCom would be required to pay KPN. Unlike the FRIACO services, those telephone subscribers who do not have ISDN would also be able to benefit from the MIACO services.

WorldCom will be able to determine the tariff which it will charge its Internet customers for both the MIACO and FRIACO services. It will also be possible for WorldCom to maintain relations with consumers itself. This would mean that from then on WorldCom’s would be billed by the company itself instead of being required to pay KPN. This would enable the development of a direct relationship between the telecommunications service provider and its customers.

Jens Arnbak, OPTA’s chairman, stresses the importance of the latter’s decisions: Viewed within a European perspective, the Netherlands is lagging well behind when it comes to Internet access pricing. This is also evident in a report recently published by the OECD.