Debate: Municipal fiber battle halts development

It's not really about Hässleholm, although the residents there deserve better. It is about the digitalization of Sweden. Therefore, the Swedish Competition Authority's conclusion is a long-awaited and clear signal to the country's municipalities," write Kajsa Frisell of IT&Telecom and Stefan Holm of Almega in Dagens Samhälle.

The municipality of Hässleholm must allow others than the municipality itself to bury fiber cable for broadband. This is the opinion of the Swedish Competition Authority, which is now taking Hässleholm to court to obtain an injunction against the municipality's actions. The fact that the Swedish Competition Authority's thorough investigation has concluded that the municipality of Hässleholm's actions are illegal and disrupt the market is a long-awaited and clear signal to the country's municipalities.

The background is that the municipality of Hässleholm decided in October 2015 not to allow anyone other than the municipality itself to bury fiber cables for broadband. The decision meant that the municipality does not let other players into the market, does not want to cooperate and does not want to promote competition. This is despite the fact that we know that this is precisely what is needed to achieve the government's goal of a fully connected Sweden, where both businesses and citizens are provided with broadband connections and broadband services at competitive prices.

To benefit from the opportunities of digitalization, everyone in our country needs a good connection to the digital infrastructure. Those who are currently without a connection are in many parts excluded from society. The expansion of broadband is therefore a matter of concern for everyone.

Because Hässleholm's actions so clearly put a spanner in the works for the broadband expansion that is so important for Sweden, and because of the risk that the actions would be copied by other municipalities, IT&Telekomföretagen chose to report Hässleholm municipality to the Swedish Competition Authority in the fall of 2015.

Two years later, which is a long time for those who are without fiber delivery when the expansion is going at a rapid pace in other parts of Sweden, the Swedish Competition Authority has now filed a lawsuit with the Patent and Market Court with the requirement that Hässleholm municipality be prohibited from restricting competition in the market. It is also demanded that the prohibition be combined with a fine of SEK 25 million that the municipality may have to pay if it does not comply with the court's decision.

The case is not really about Hässleholm. It is about the fact that unhealthy competition in municipalities is currently, and in recent years has been, one of the biggest obstacles to broadband expansion in Sweden. It is about the question of whether a municipality can decide to neglect the government's broadband strategy and its residents' right to digital infrastructure at competitive prices.

The Swedish Competition Authority's decision makes it abundantly clear that the answer to that is no. The case is not yet settled, but we hope of course that there will be a quick decision in court. The best thing would of course be for Hässleholm municipality not to waste any more time but to heed the signal to welcome external investment and promote healthy competition by coming to its senses and changing the decision to be a monopolist in its own municipality. And above all, that Sweden's other municipalities now look first and foremost to the best interests of their own citizens and businesses by letting in competition. Because surely you must basically agree with the Swedish Competition Authority's DG that a municipality should primarily "work to promote development, innovation and entrepreneurship - not to make it difficult for companies to operate and grow"?

Anything else would not be primarily a defiance of the Competition Authority's decision, but a betrayal of the members of their own municipality who risk not being able to access broadband quickly and at the best price the market can offer.

Kajsa Frisell, business policy expert IT&Telecom companies within Almega
Stefan Holm, industrial policy expert at Almega