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Annual report for the Norwegian Communications Authority 2015

Annual report for the Norwegian Communications Authority 2015.

After Minister of Transport and Communications Ketil Solvik-Olsen in the autumn of 2014 asked that we change our name (from the Post and Telecommunications Authority) to the Norwegian Communications Authority (Nkom), great efforts were made to get everything ready by the end of the year. The new name has been received well both in the markets and in society at large, and we find that the name to a great extent reflects our areas of responsibility and is understood by our target groups.

Like 2014, 2015 was characterised by work on security and preparedness in particular. Ever since the extreme weather Dagmar in 2011, we have communicated the significance of electronic communication being expected to work in peace, in crises and in war. There is no longer any doubt that electronic communications are fundamental infrastructure allowing society to work. Without these services, we have a crisis. This is essential to much of Nkom's work.

In 2015, the Norwegian Competition Authority confirmed that TeliaSonera was permitted to acquire Tele2. With this acquisition, the market situation between mobile network owners changed permanently, and we now have two major operators: Telenor and TeliaSonera, and one operator that is developing its new network after the acquisition of 4G frequencies in the auction in the autumn of 2013: ICE.

In the broadband market, 2015 has been a year with focus on capacity. In the residential market for mobile broadband, which in practice cannot be separated from the mobile market, marketing focuses on data volumes and capacity. All three network owners are developing 4G networks and are competing for customers based on quality parameters. This is in line with what Nkom has previously anticipated. In my view, price remains important, but that quality criteria are increasingly becoming important in the Norwegian electronic communications market is a desired development.

Though price is now just one of several elements, Nkom nevertheless finds it to be positive that users have access to transparent comparisons when they are choosing electronic communications services.

In 2015, Nkom therefore started work on offering private operators an approved label they can use if they fulfil certain objective criteria. The goal for this is to enable private operators to offer good services and for the Authority to not take the place of private operators when these perform the tasks at least equally well. The scheme will be ready in the spring of 2016.

There are also important developments underway in regard to fixed broadband. The Government has continued its support scheme for areas where there is no basis for commercial development. In 2015, Nkom distributed NOK 110 million in this scheme, and this provides broadband connections for 10,000 new households.

In 2014, Nkom decided that Telenor had to open its fibre network to its competitors. The purpose of this is for the competitors to also supply services over this network, as they have been able to do over Telenor's copper network for many years. Telenor launched its wholesale service in January 2015, and thus conditions have been put in place for competition where Telenor builds fibre networks.

When TeliaSonera in 2014 gave notice that it wanted to acquire Tele2, we put our work on the important auction in the 1800 band on hold. The reason was that frequencies are such crucial resources for competition between the companies that we wanted the Norwegian Competition Authority's final assessment to be in place before we defined the terms etc. for the auction. We held the auction right before Christmas in 2015, and the outcome was eagerly anticipated. The result was that TeliaSonera and Telenor acquired the available frequencies, at a total cost of nearly NOK 900 million.

Auctions will not become less important in the years ahead. Issues such as the Directorate for Emergency Communication's (DNK) need for frequencies, the further development of broadcasting companies when parts of their spectrum are to be re-assigned to mobile networks, and the terms for new auctions when old licences expire are important in the times ahead.

Nkom has offered feedback on the Ministry of Transport and Communications' electronic communications plan, which is planned as part of the Government's presentation of digital agenda to the Storting. For this plan, Nkom has proposed a universal service obligation for broadband, of a basic, good quality (4 Mbit/s downstream).

Our advice is that the universal service obligation for broadband should replace the current obligation to supply fixed telephony, and that the universal service obligation must be seen in the context of the state's need to communicate with the population electronically from February 2016. We have reasons to believe that most households will be offered a far higher capacity than stipulated in the universal service obligation. This way, the obligation is not a limitation, but only a safety net to ensure that all households become part of the digital society with a minimum broadband capacity.

As networks and services are developed to handle both large data volumes and strains from extreme weather etc., users' demands that all services always work also increase. Ensuring that all important target groups have realistic views of what they can and should expect, and which precautions they should take themselves to secure their services as best as possible, is a pedagogical matter.

In 2015, Nkom has continued its tour to all county governors' management groups, and we also visit other forums that want information and discussions about their own and societal preparedness.

It is my firm view that this work is both important and useful, and that it often provides new perspectives when we collaborate with regional authorities. We also put significant effort into collaborating with other state authorities, where tasks and responsibilities intersect. The purpose of this is to contribute to an efficient state, with clear divisions of responsibility.

In 2015, Nkom advocated for closer contact between providers of electronic communication and the secret services. An electronic communications security forum (Ekom-sikkerhetsforum) has been established: it includes the largest providers, the National Security Authorities, Politiets sikkerhetstjeneste (PST), the Norwegian Intelligence Service and Nkom. We chair and facilitate this forum, which works at a classified level.

For Nkom's daily handling of the security situation for Norwegian electronic communications systems, the creation of a dedicated response team (Nkom CSIRT) is important. In 2015, dedicated resources were allocated, and the team will be available to the industry from the summer of 2016. With this team in place and under development, Nkom CSIRT will become an important provider of industry information to and from NorCERT. And, not least: the goal is for the collaboration between the security teams and the industry to become predictable and efficient. This is significant in an industry in which delays are critical when something wrong has occurred or is developing.
In order for these efforts to provide the results society demands and expects in a crisis, Nkom depends on funds to continue to prioritise the work on security and preparedness. This is also true for investments in the construction of one secure place for communication (the "Reinforced eCom" project) in each municipality, so that crisis management across the country can trust they will not become completely isolated during extreme events.

In 2015, the Storting adopted a new Postal Services Act. There will be full competition in the Norwegian postal market from 2016, which means that Norway will be harmonised with the rest of the EEA countries in this area as well. There is a significant decline in ordinary letter post, and it will be exciting to see the competition that will develop in the physical postal market. The parcel market is growing, and the Government has decided that post to and from the public sector shall mainly be digital.

Nkom's head office is located in Lillesand. Southern Norway is particularly affected by the decline in the supply industry's contracts with the oil industry, with resulting unemployment. Our organisation therefore appears as an even more attractive workplace than previously, and we have good access to non-specialist workers. However, specialists with experience from the industries or relevant authorities remain a challenge.

In 2015, Nkom settled a prolonged conflict with our landlord about the exterior lettable area. This is an important framework condition for our future development, and we finally achieved a settled situation in this matter.

In recent years, Nkom has been allocated more tasks and has also more clearly entered areas of responsibility that fall under our authority. These tasks have mainly been solved within our current budget and through re-prioritisations of resources. Nkom's financial management is good and we deliver with the budget agreed with the Ministry of Transport and Communications.

Nkom works systematically on fulfilling our role within our area of responsibility. This means that we travel extensively domestically and internationally. This is important to our work and helps the professional development of the individual employee, but it is also challenging.
We have complied with the Government's requirement regarding efficiency improvements, but in several areas Nkom has been made so efficient that further restrictions can potentially hinder the optimal performance of the tasks we have been allocated. I am very satisfied with our low rate of sick leave absences and high degree of job satisfaction, but I am concerned about the burden managers and some employees with specialist competencies are subject to.

Nkom has maintained its international activities in 2015. However, we are increasingly having to assess where to use our resources, based on our strategy that Norway shall play a role in the issues we get involved in.

In 2015 we have worked internationally in BEREC in particular, where we are active at the leadership level and in the work on international roaming and net neutrality. The principle that people shall be able to use electronic communication for whatever they want – and at predictable and reasonable terms – within the jurisdiction in question forms a foundation for our involvement.

 

Lillesand, 14 March 2016

Torstein Olsen

Director General of the Norwegian Communications Authority