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Telecommunications: Commission takes further action on unbundling infringement proceedings against five Member States

European Commission - IP/02/445   20/03/2002

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IP/02/445

Brussels, 20 March 2002

Telecommunications: Commission takes further action on unbundling infringement proceedings against five Member States

As part of its efforts to push for greater competition in broadband access, the European Commission has decided to open infringement proceedings against Germany, France, Ireland, the Netherlands and Portugal in relation to the Regulation on Unbundling of the Local Loop. The action is being taken because of the failure to ensure that the reference offer from incumbent operators is complete and sufficiently detailed. This offer should be sufficiently unbundled to allow competitors to pay just for what they require, and must provide in particular a breakdown of costs for the sub-loop so that an operator can install equipment closer to customers' premises than the local exchange. These proceedings follow the action taken in December 2001 against Germany, Portugal and Greece concerning shared access to the local loop, at which time the Commission made it clear that further legal action could be taken. The effectiveness of this action is clear from the fact that two of the Member States implicated in December, Portugal and Greece, have already remedied the problem involved, and the Commission is today closing these two cases. Germany has also recently reported positive steps to remedy the situation, and the Commission will consider closing this case also. The Commission is once again making good its promise to act when adequate steps have not been taken in Member States to ensure that competition in local broadband access is encouraged, an objective that was reaffirmed by the Barcelona European Summit.

Enterprise and the Information Society Commissioner Erkki Liikanen said "Regulators and operators have had time to implement the requirements of the EU Regulation, and there can be no more delays in opening up the local access market to competition. The action we have already taken has had immediate results, and I hope that national authorities can move quickly to overcome the problems that we are addressing in this latest decision on unbundling."

The Regulation on local loop unbundling(1), adopted fifteen months ago by the European Parliament and the Council, was designed to bring more competition to the provision of local broadband access and to permit high-speed Internet access. In its Seventh Implementation Report the Commission noted that progress in unbundling has so far been disappointing (see IP/01/1679 of 28 November 2001) and four weeks later opened a first round of infringement proceedings in order to ensure that progress was made rapidly (see IP /01/1896 of 20 December 2001).

Under the Regulation, operators with significant market power had to publish from 31 December 2000, and keep updated, a reference offer (RUO) for unbundled access to their local loops and related facilities. The Annex to the Regulation sets out a minimum list of items to be included in a RUO, which is required to be sufficiently unbundled so that the beneficiary does not have to pay for network elements which are not necessary. Unbundled access includes access to the local sub-loop, so the same requirement for a sufficiently detailed offer concerning these sub-loops applies. These local sub-loops are important where the competing operator wants to be situated close to its clients, and are already a practical requirement for operators seeking to develop certain broadband technologies, such as VDSL(2).

The Regulation is directly applicable in all Member States and action can thus be brought before the national courts by any interested party. The Regulation also requires regulatory authorities to ensure that notified operators comply with their obligation under the Regulation. In the case of the five Member States (Germany, France, Ireland, the Netherlands and Portugal) affected by today's decision of the Commission, there have not been adequate steps taken to ensure that the RUO of the incumbent operators are sufficiently unbundled, particularly in relation to local sub-loops.

The regulatory authorities in the Member States have, however, been making significant efforts in relation to most aspects of unbundling, and the Commission has focused on the exceptions to that rule. In the case of Portugal and Greece, where separate infringement proceedings had been opened in December, the failings with regard to an offer for shared access were quickly remedied by the national authorities and the Commission has therefore decided to close those proceedings. In Germany, a reference unbundling offer was published on 13 March 2002 and the prices for shared access were approved by the regulatory authority on 15 March 2002. Given that these actions were taken only recently, the proceedings concerning Germany on shared access will be considered by the Commission in the near future.

The Member States concerned are due to respond to the Commission's request for information within two months. The requests for information take the form of letters of formal notice, the first stage of infringement procedures under Article 226 of the Treaty.

Background:

The Commission has powers to enforce local loop unbundling under the Regulation (ex ante power) and under the general competition rules (ex post control). In parallel with the proceedings just decided and those opened in December 2001, the Commission recently made available (see IP/02/348), in the framework of its sector enquiry on local loop unbundling, the non-confidential version of a study reflecting the views of newcomers to the market which are dependent on the incumbent operators networks to reach consumers. A public hearing will be held before the summer to discuss the report's findings.

(1)Regulation 2887/2000 of the European Parliament and the Council of 18 December 2000 on unbundled access to the local loop, OJ L 336, 30/12/2000, p. 4

(2)Very High Bit-rate Digital Subscriber Line (VDSL) which is considered by some operators to be the logical development of broadband services following on from ADSL, providing sufficient speed and bandwidth for entertainment services such as video on demand.


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