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PR(00)14: The EFTA Surveillance Authority launches third phase of telecommunications sector inquiry under the EEA competition rules: Access to local loop

23.9.2002

The EFTA Surveillance Authority has sent a request for information to the incumbent telecommunications operators in EFTA to find out whether, and under what conditions, they allow their competitors access to the local loop. The purpose of the enquiry is to detect any abuses of a dominant position. These requests for information mark the third stage of the sectoral inquiry on the telecommunications industry initiated by the EFTA Surveillance Authority in its decision on 1 December 1999; the first two stages, concerning leased lines and mobile roaming agreements, were launched at the end of 1999 and the beginning of 2000. The inquiry by the Authority is conducted in close co-operation with the European Commission.

The term "local loop" refers to the physical circuit which links the subscriber to the local switch or to any other equivalent facility of the telecommunications operator. Providing unbundled access to the local loop means allowing other operators to use all or part of the incumbents' local loops and thus enabling them to install new technologies such as broadband DSL (Digital Subscriber Loop) services. Full unbundled access to the local loop allows new entrants to have full control of their business relations with their customers. Without effective unbundling, the local loop remains the least competitive segment of the telecommunications networks in the European Economic Area. Control of this network by the incumbent telecommunications operators has enabled them, despite the liberalisation of voice telephony since 1 January 1998, to retain market shares often approaching 100% on subscriber access services and local communications.

Unbundled access to the local loop is a key element in any strategy to develop competition for local access. The unbundling of local loop should contribute to create more competitive and convergent market conditions for telecommunications services in the EEA, stimulate the roll out of high speed internet access to services to small business users and consumers and facilitate the growth of e-commerce and e-business in the EEA.

It should be pointed out that, provided a number of conditions are met, refusal by the incumbent operators to provide local loop access could constitute an abuse of a dominant position in breach of Article 54 of the EEA Agreement. Similarly, when incumbent operators grant their competitors access, any discriminatory and non-transparent conditions may also constitute an abuse of a dominant position. The purpose of the letters sent to the incumbent telecommunications operators under the sectoral enquiry is to detect any such abuses. The operators have six weeks in which to reply to the questions put by the Authority, which, as a second step, will request information from their competitors as part of the enquiry.

If the Authority finds sufficient evidence of practices that constitute infringements of the EEA competition rules, it may decide at a later stage to open formal proceedings against individual undertakings.

For further information please contact Amund Utne, telephone (+32) 2 286 18 50 or Tor Arne Solberg-Johansen, telephone (+32) 2 286 18 66.

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