Currently, there are 1.5 million broadband subscriptions in Hungary, including about 700,000 ADSL subscriptions, directly affected by the regulation. Broadband retail fees have fallen by a considerable rate since the introduction of the broadband technology: they decreased by 40% between 2002 and 2005, followed by a 30% drop between 2006 and 2007.

 

Retail fees first dropped below HUF 5,000, and then below HUF 3,000. The most recent package has a monthly fee of HUF 0. The other trend is the stabilisation of broadband monthly fees, with an improved price to bandwidth ratio.

 

A major part of sales is wholesale. Leasing of local loops has also started and the number of leased loops is currently about 7,000, with equal shares of partial and full local loop leases. Local loop lease fees have also decreased in the past four years: the fees of partial local loop leasing dropped by 75%, while those of full leasing decreased by 25%. A large number of the one-off fees have been discontinued.

 

Wholesale fees do not hinder local loop leasing, however, some of the service terms and conditions do create a bottleneck in terms of competition.

 

Beneficiary service providers indicated in their comments that a beneficiary service provider can make a contract (i.e. a specific local loop unbundling (LLU) contract or a specific local loop contract constituting a part of an unbundling framework contract) only if it has an effective (pre)contract with a specific subscriber about using the services at a specific access point. In other words, Reference Unbundling Offers will maintain the practice of not allowing beneficiary service providers to use ported local loops for providing services to anybody else but their own existing subscribers. Beneficiary service providers requested that Reference Unbundling Offers granted the possibility of wholesale resale in an unambiguous and unproblematic way. Another proposal was received suggesting that the regulation should allow beneficiary services making joint investments (e.g. by establishing a joint enterprise for the purposes of using wholesale services).

 

Suggestion made by beneficiary service providers: a beneficiary should simultaneously be a subscriber.In principle, there is no obstacle to the entry of new market players in the present situation, however, such a development could pose problems due to the requirements associated with physical co-location.According to the consideration of beneficiary service providers, there is no need to modify Government Decree No. 277/2003.

 

 

According to the experiences of service providers, the low-voltage general power and process feed current supply (230 V AC, max. 10A, 2 kVA) as well as the maximum allowed dissipation of beneficiary service providers (1,200 W/service provider) as prescribed in Reference Unbundling Offers based on Article 33 (1) of Government Decree No. 277/2003. (XII.24.) are insufficient, especially if a service provider wishes to install more equipment in the future. The notified service provider must ensure environmental parameters (temperature in the +5°C to +40°C range, relative humidity between 5% and 58%) taking into account the dissipation produced by the electronic communication devices during normal operation. In order to guarantee the operational reliability and the undertaken availability of the electronic communications equipment, it is essential to ensure uninterrupted power supply, which is not always provided by notified service providers.

 

 

Effective regulations allow remote co-location only inside the real property of the notified service provider. However, according to the experiences of service providers, the sites offered by notified service providers are in many cases not suitable for physical installation, or implementing a connection on the real property of the notified service provider is the most expensive solution available on the market, regardless of whether the notified service provider owns the real property or rents it.

 

In the opinion of service providers, it could solve this practical problem if the Reference Unbundling Offers of the notified service providers allowed such type of co-location where they could place their equipment outside the real property of the notified service provider.

 

This would allow remote access, which would be such local loop unbundling (LLU) where the beneficiary's equipment would be located near to, but separated from, the installation of the notified service provider, outside its real property. The LLU cable distribution frame required for the connection would be provided by the notified service provider by means of virtual co-location. The beneficiary service provider would provide the feed current, while the notified service provider would ensure the connection of the beneficiary service provider's equipment to the local loop at the beneficiary's cost.

 

 

 

 

Do the current fees for local loop unbundling and local bitstream access allow the emergence of an efficient competition in retail markets? Will beneficiary service providers be able to offer services and fee packages, which can compete with the offers of notified service providers if using the above-mentioned wholesale services?

 

 

In the comments received beneficiary service providers indicated several practical problems, which concern the notified service provider rejecting the unbundling of local loops. Beneficiary service providers complain that the mere indication of "technical reason” is insufficient information to offer to subscribers when a request for local loop unbundling is rejected, therefore, they suggest that a category list should be developed within the collective notion of "technical reason” in co-operation with the service providers. Furthermore, beneficiary service providers suggest that in case an installation request is rejected, the RUOs should include a requirement binding notified service providers to credibly justify the dates when they received the installation requests from different beneficiary service providers. They also suggest that notified service providers should be obliged to make a copy of the test results - regardless of whether they are positive or negative - available to beneficiary service providers after performing a suitability test on a specific local loop. Beneficiary service providers also noted in their comments that according to the practices used in office buildings and condominiums, the wiring inside the buildings is provided by the manager of the real property, thus, part of the local loop does not belong to the network of the notified service provider and that fact can serve as the basis for the notified service provider's rejection of the LLU request. Beneficiary service providers request that the issues related to this matter be addressed in the Reference Unbundling Offers. Furthermore, they also consider it necessary that RUOs specify the technical parameters that notified service providers are bound to hand over to beneficiaries as a minimum, in relation to both measurements and line testing.

 

Beneficiary service providers find it unsubstantiated that in relation with ADSL, ADSL2 and ADSL2+ services, notified service providers make the amendment and the modification of spectrum management directives a precondition of applying standard operating modes that differ from Annex B (e.g. Annex A, Annex J, Annex M), and refer to the costs of applying such modes. In the opinion of beneficiary service providers notified service providers had sufficient time and resources to create suitable conditions for the application of versions different from Annex B.

 

 

Could the volume of co-location-related monthly fees be considered a constraint with respect to the utilization of local loop unbundling and local bitstream access services? Is it necessary or possible for that matter to include different monthly fee amounts broken down to specific installation sites in the RUOs?

 

 

Beneficiary service providers indicated in their comments that RUOs should regulate the procedure to be applied in connection with the relocation and transfer of subscriber access points when a subscriber moves to a new location so that subscribers could use the service provided by an alternative service provider through local loop unbundling in a practically uninterrupted manner. Beneficiary service providers suggest that in order to make the change from one service provider to another smoother, Reference Unbundling Offers should also include a provision specifying that once the former service provider has cancelled the LLU agreement, the notified service provider does not have the right to decline an LLU request from the new beneficiary service provider. From a practical point of view it is still unsolved how local loop orders of a specified timeframe (shared access or full LLU) relate to each other with respect to deadline calculations when a subscription is transferred from shared access to full local loop unbundling (it is not clear whether the specified timeframe re-starts when the subscription is transferred to full LLU, or the timeframe specified for the previous shared access local loop unbundling will continue).

 

As indicated by beneficiary service providers, a solution is required for the problem arising when an LLU agreement is cancelled, rendering the subscriber practically unable to access Internet services for three months even if making a contract with another service provider. It can be an important question to decide whether it is necessary to change the regulations relating to the migration issues of wholesale ADSL services provided with IP bitstream access or LLU, and to identify migration factors that limit the uninterrupted nature of the ADSL service provided to subscribers.

 

 

If it is about an existing ADSL subscriber of theirs, they should not go through the same procedure required for local loop unbundling again.

They would like the processes to be regulated as thoroughly and in such quality as those of conventional wholesale ADSL.

They suggest decreasing administrative requirements in relation to local loop unbundling.They wish to implement a model already used in the intermediary selection process, where the beneficiary service provider obtains the required documents but does not send them to the notified service provider, and so the beneficiary can check their content any time.That would significantly decrease the administrative workload.

 

 

Based on the experience of beneficiary service providers, unused local loops are practically impossible to identify and notified service providers reject a significant portion of the requests aimed at unbundling such local loops. Beneficiary service providers are unable to verify the reasons given in relation to such rejections. Beneficiary service providers requested that they should be provided access to the existing databases of notified service providers with respect to unused local loops.

 

To provide for better technical co-operation and to streamline the complaint process, beneficiary service providers consider it important that the notified service provider should hand over the lines' technical numbers and the details of the handover distribution frame (HDF) position (especially those relating to unused local loops).

The beneficiary service providers request that the rules of forecasting should be overviewed and that the same treatment should be applied to both beneficiary and notified service providers.

 

In the comments received from beneficiary service providers it was mentioned that returning local loops to notified service providers should be regulated in Reference Unbundling Offers, because based on the continuous decrease in the penetration of fixed-line phones, the same phenomenon can be expected in relation to unbundled local loops. In the opinion of beneficiary service providers, Reference Unbundling Offers should also specify what procedure is to be followed in such cases where a beneficiary service provider cannot provide the service to a subscriber for any reason and the subscriber wants to use the service provided by the notified service provider again, or where the subscriber does not want to use any service in the future (market abandonment).

 

 

 

According to the comments of notified service providers, beneficiaries often report errors without providing preliminary diagnostics and do not exclude errors occurring on their side (DSLAM errors, power supply failures in subscriber modems, etc.), which increases the time required for error correction and generate additional costs incurred by the notified service provider. Based on the above, notified service providers suggest that the Reference Unbundling Offers should include provisions on how additional costs generated by incorrect error reports are to be settled.

 

 

Beneficiary service providers noted that notified service providers included unjustifiably low error correction and availability values in their Reference Unbundling Offers. Therefore, they suggest that the retail conditions should be incorporated in the RUOs as a minimum. The required values of quality indexes cannot be specified by regulation. These values are defined by service providers and depend on what values they undertake to meet as per Government Decree No. 345/2004. (XII.22.). Notified service providers are bound to provide quantified requirements for the quality indexes listed in the provision identifying their acceptable and unacceptable levels.

 

 

Beneficiary service providers noted that the unbundling of local loops takes unduly long. Beneficiary service providers believe that this is caused by the too long establishment deadline specified in the RUOs and by the related complicated administration both notified and beneficiary service providers must perform. Based on a comparison with the deadline specified for the installation of a subscriber's ADSL access point, the deadlines for the unbundling of local loops are considered to be unjustly long.

 

In their opinion, a large portion of the administration is unnecessary, unduly costly and significantly prolongs the unbundling process. The LLU procedure is further slowed down by the fact that certain notified service providers allocate two workdays a week for establishment/installation work, therefore, it is requested that notified service providers be bound to perform the implementation of local loop unbundling on every workday of the week.

Notified service providers suggested that framework agreements be used everywhere.The system of the RUO's structure should be uniform.