Cap the price of high speed networks, says European Commission

Leased lines are used for high-speed internet access, for communicating with clients, colleagues and customers, for transacting business and for communicating within organisations, via e-mail, file-sharing, information systems, telephone and fax.

In general, leased lines are provided by traditional telecom operators. New market entrants have their own networks but need to link their customers' premises to them. This link is called a 'leased line part circuit' and is usually provided by the incumbent.

These links need to be reasonably priced at the wholesale level to generate a competitive leased lines retail market and for competitive downstream 'knock-on' effects. However, the Commission has discovered that the substantial variations in wholesale prices that exist across the EU do not directly reflect the cost of supplying the leased lines.

The Commission has therefore issued a recommendation, detailing the "best current practices" in wholesale leased line pricing, and giving competitive market benchmark prices for the whole EU.

The idea is that, while recommendations are not binding on Member States, national regulators will use the recommendations to improve competition in their local leased line markets.

"Competitive pricing of leased lines will expand the range and cut the costs of electronic communications services that are made available to business users and end-users across the EU, and in particular to small and medium-sized enterprises, which have much to gain from lower prices for business services offered by operators making use of these inputs," explained Information Society and Media Commissioner Viviane Reding.