AMSTERDAM — A Dutch government white paper on the cable industry issued late last week is expected to trigger a bitter regulatory fight when it comes up for a vote in Parliament next month.
The Dutch cabinet’s so-called “Kabel Nota” (Cable Note) could force cable companies, including United Pan Europe Communications (UPC), the continent’s largest cable outfit, to open their Dutch networks to broadcasters and competing Internet service providers.
The regs, if passed, would have Dutch antitrust authority NMA reviewing the cable industry on a yearly basis. If competition is threatened, cable operators might be required to allow other ISPs to offer competing services.
Government insiders said the cabinet vote on the white paper provoked a near crisis when Minister of Economic Affairs Annemarie Jorritsma swung in favor of the regs; her party, the VVD, has long been opposed to such restrictions.
Jorritsma’s vote also surprised the cable industry.
“We are astonished the minister is supporting the new regulations, which clearly undermine a healthy investment climate in this sector,” said Frans Nyhof, a spokesman for the VECAI, an umbrella organization for the Dutch cable industry.
The regs had been drafted by the ministry of education, culture and science, which has long criticized UPC’s increasing dominance of the Dutch market.
The white paper, in the form of a draft bill, comes up before Parliament in mid-May but worries over its effect on the industry have already triggered investor concern. UPC’s shares fell 15% on Tuesday, the first day of trading after the holiday weekend, and dipped slightly on the AEX on Wednesday.
Some of that plunge is credited to investor concern over whether the regulatory challenge in Holland may have a ripple effect across the continent, threatening UPC’s ability to carry out its plans to launch Internet, voice and video services across Europe.
But some investors are worried over UPC’s inability to nail down a time when it will show earnings before interest, taxes, depreciation and amortization profitability.
Said Martin Verbeek, a senior analyst with Swiss investment bank Julius Baer: “There are a lot of these kinds of service providers around, and the inclination is to go for companies which can demonstrate some opportunity for profitability.”