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Competition

PR(02)03: Local loop unbundling: publication of EEA-wide report

16.9.2002

Access to the last mile of telephone lines into European homes - the unbundling of the local loop (ULL) - is essential to develop competition in local access and to put broadband Internet within the reach of EEA citizens.  ULL or access to the local loop on fair terms was mandated by a European regulation that was incorporated into the EEA Agreement in 2001.

An EEA-wide study is critical of progress to date. The study, prepared for the European Commission and the EFTA Surveillance Authority and published on the Commission’s website, reflects the views of newcomers to the market and provides a legal analysis of current unbundling conditions.  The Authority invites the EEA EFTA States’ national competition and regulatory authorities and dominant players to reflect on the results of this study and to play their part in ensuring that the objectives of ULL are met.

The European Commission is publishing on its website http://europa.eu.int/comm/dgs/competition/index_en.htm the non-confidential version of an EEA-wide Study prepared by consultant law firm Squire, Sanders and Dempsey (SSD) on local loop unbundling.  The Study is based on material gathered by the Authority and the Commission in the framework of the authorities’ parallel sector enquiries on local loop unbundling. The Study consists of a general report summarizing the main findings and containing the legal analysis of SSD, and of country reports dealing with the situation as perceived by alternative telecom operators in each individual EEA State.

The Authority invites comments on the report from all interested parties in the EEA EFTA States.  Comments must be sent to the Authority’s Competition and State Aid Directorate (competition@surv.efta.be) by April 30th.  A public hearing will be organised by the Commission (with the involvement of the Authority and the EEA EFTA parties) before the summer to discuss the findings of the report and the comments received.

ULL was mandated in the EEA EFTA States following the incorporation of a European regulation of December 2000 into the EEA Agreement in 2001. The Authority monitors the enforcement of this act in the territories of the EEA EFTA States.  As competition law applies irrespective of the regulatory tool, the Authority and the European Commission decided in July 1999, in the framework of their respective competition powers, to launch a sector enquiry on local loop unbundling.

The Study concludes that in the EEA new entrants seeking to rent copper lines from telecom incumbents to deploy their own services (in particular broadband services) to end-users are confronted with tariff and cost related problems and with behavioural problems that reflect the reluctance of incumbents to open their premises and facilities to their competitors. The conditions of collocation appear to be especially contentious.

The Authority will continue to actively monitor the unbundling process, which it deems essential to secure the development of competition on the local access market. The Authority intends to maintain close contact with the European Commission in the follow-up phase, with a view to the two authorities’ securing a homogeneous application of the competition rules throughout the EEA.

For further information, please contact Mr. Simen Karlsen (tel.: 02 286 1874) or Ms. Anny Tubbs (tel.: 02 286 1857).

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