Considerations on COM(2000)394 - Unbundled access to the local loop - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2000)394 - Unbundled access to the local loop. |
|---|---|
| document | COM(2000)394  |
| date | December 18, 2000 |
(2) Local loop unbundling should complement the existing provisions in Community law guaranteeing universal service and affordable access for all citizens by enhancing competition, ensuring economic efficiency and bringing maximum benefit to users.
(3) The 'local loop' is the physical twisted metallic pair circuit in the fixed public telephone network connecting the network termination point at the subscriber's premises to the main distribution frame or equivalent facility. As noted in the Commission's Fifth Report on the implementation of the telecommunications regulatory package, the local access network remains one of the least competitive segments of the liberalised telecommunications market. New entrants do not have widespread alternative network infrastructures and are unable, with traditional technologies, to match the economies of scale and the coverage of operators designated as having significant market power in the fixed public telephone network market. This results from the fact that these operators rolled out their metallic local access infrastructures over significant periods of time protected by exclusive rights and were able to fund investment costs through monopoly rents.
(4) The European Parliament Resolution of 13 June 2000 on the Commission communication on the 1999 Communications review stresses the importance of enabling the sector to develop infrastructures which promote the growth of electronic communications and e-commerce and the importance of regulating in a way that supports this growth. It notes that the unbundling of the local loop currently concerns mainly the metallic infrastructure of a dominant entity and that investment in alternative infrastructures must have the possibility of ensuring a reasonable rate of return, since that might facilitate the expansion of these infrastructures in areas where their penetration is still low.
(5) The provision of new loops with high capacity optical fibre directly to major users is a specific market that is developing under competitive conditions with new investments. This Regulation therefore addresses access to metallic local loops, without prejudice to national obligations regarding other types of access to local infrastructures.
(6) It would not be economically viable for new entrants to duplicate the incumbent's metallic local access infrastructure in its entirety within a reasonable time. Alternative infrastructures such as cable television, satellite, wireless local loops do not generally offer the same functionality or ubiquity for the time being, though situations in Member States may differ.
(7) Unbundled access to the local loop allows new entrants to compete with notified operators in offering high bit-rate data transmission services for continuous Internet access and for multimedia applications based on digital subscriber line (DSL) technology as well as voice telephony services. A reasonable request for unbundled access implies that the access is necessary for the provision of the services of the beneficiary, and that refusal of the request would prevent, restrict or distort competition in this sector.
(8) This Regulation mandates unbundled access to the metallic local loops only of notified operators that have been designated by their national regulatory authorities as having significant market power in the fixed public telephone network supply market under the relevant Community provisions (hereinafter referred to as 'notified operators'). Member States have already notified to the Commission the names of those fixed public network operators which have significant market power under Annex I, Part 1, of Directive 97/33/EC of the European Parliament and of the Council of 30 June 1997 on interconnection in telecommunications with regard to ensuring universal service and interoperability through application of the principles of open network provision (ONP)(3), and Directive 98/10/EC of the European Parliament and of the Council of 26 February 1998 on the application of open network provision to voice telephony and on universal service for telecommunications in a competitive environment(4).
(9) A notified operator cannot be required to provide types of access which are not within its powers to provide, for example where fulfilment of a request would cause a violation of the legal rights of an independent third party. The obligation to provide unbundled access to the local loop does not imply that notified operators have to install entirely new local network infrastructure specifically to meet beneficiaries' requests.
(10) Although commercial negotiation is the preferred method for reaching agreement on technical and pricing issues for local loop access, experience shows that in most cases regulatory intervention is necessary due to imbalance in negotiating power between the new entrant and the notified operator, and lack of other alternatives. In certain circumstances the national regulatory authority may, in accordance with Community law, intervene on its own initiative in order to ensure fair competition, economic efficiency and maximum benefit for end-users. Failure of the notified operator to meet lead times should entitle the beneficiary to receive compensation.
(11) Costing and pricing rules for local loops and related facilities should be transparent, non-discriminatory and objective to ensure fairness. Pricing rules should ensure that the local loop provider is able to cover its appropriate costs in this regard plus a reasonable return, in order to ensure the long term development and upgrade of local access infrastructure. Pricing rules for local loops should foster fair and sustainable competition, bearing in mind the need for investment in alternative infrastructures, and ensure that there is no distortion of competition, in particular no margin squeeze between prices of wholesale and retail services of the notified operator. In this regard, it is considered important that competition authorities be consulted.
(12) Notified operators should provide information and unbundled access to third parties under the same conditions and of the same quality as they provide for their own services or to their associated companies. To this end, the publication by the notified operator of an adequate reference offer for unbundled access to the local loop, within a short time-frame and ideally on the Internet, and under the supervisory control of the national regulatory authority, would contribute to the creation of transparent and non-discriminatory market conditions.
(13) In its Recommendation 2000/417/EC of 25 May 2000 on unbundled access to the local loop enabling the competitive provision of a full range of electronic communications services including broadband multimedia and high-speed Internet(5) and its Communication of 26 April 2000(6), the Commission set out detailed guidance to assist national regulatory authorities on the fair regulation of different forms of unbundled access to the local loop.
(14) In accordance with the principle of subsidiarity as set out in Article 5 of the Treaty, the objective of achieving a harmonised framework for unbundled access to the local loop in order to enable the competitive provision of an inexpensive, world-class communications infrastructure and a wide range of services for all businesses and citizens in the Community cannot be achieved by the Member States in a secure, harmonised and timely manner and can therefore be better achieved by the Community. In accordance with the principle of proportionality as set out in that Article, the provisions of this Regulation do not go beyond what is necessary in order to achieve this objective for that purpose. They are adopted without prejudice to national provisions complying with Community law which set out more detailed measures, for example dealing with virtual collocation.
(15) This Regulation complements the regulatory framework for telecommunications, in particular Directives 97/33/EC and 98/10/EC. The new regulatory framework for electronic communications should include appropriate provisions to replace this Regulation.