Brussels, 01/03/2002 (Agence Europe) - The unbundling of the local loop, indispensable for developing competition and putting broadband Internet within the reach of citizens, has so far been very unsatisfactory within the Union. This is shown by the results of a study by law firm Squire, Sanders and Dempsey on behalf of the European Commission and under the EFTA Surveillance Authority.
The study shows that newcomers to the market seeking to rent copper lines from incumbents to deploy their own services (mainly broadband services) to end-users are confronted with two sets of problems: tariff and cost-related problems inherent to the unsatisfactory economic conditions of unbundling throughout Europe; and, on the other hand, behavioural problems, reflecting the reluctance of telecom incumbents to open their premises and facilities to their competitors. The conditions of collocation (the renting of indispensable space by newcomers on the premises of the incumbent operator) and the related facilities seem to be particularly challenged. The newcomers mainly complain about high rental fees, the need to build separate rooms to accommodate their equipment, high frees for escorted access to the incumbents' premises, etc. The combination of expensive collocation conditions and high one-off fees (for activation/deactivation of unbundled lines) has a clear economic impact and has led a number of operators to turn away from the market or leave aside the residential segment altogether. Many newcomers also state that they are confronted by price squeezes. The consultant takes the view that most of the problems reported by new entrants reflect possible infringements of competition law. The Commission will therefore continue to scrupulously monitor the unbundling process. It may, according to its spokesman's service, continue the infringement proceedings initiated against Germany on 20 December last, as Berlin, unlike Athens and Lisbon, has not yet responded to the formal letter of notice. It could also initiate action against companies that make abusive use of their dominant position.
The Commission hopes at present that all parties interested will make their observations on this report known. All comments should reach comp-local-loop@cec.eu.int before 30 April. A public hearing will be organised before the summer to examine the conclusions of the report and the observations received. The report may be consulted on: http: //europa.eu.int/comm/dgs/competition/index_en.htm.