Local loop unbundling too slow, says European Commission

The unbundling or access to the local loop on fair terms was required by a Council Regulation of December 2000. The Commission is now calling upon the EU Member States, national competition and regulatory authorities and dominant players to “play their part to ensure that the objectives of unbundling are met.”

In the meantime, the Commission, which has already launched infringement proceedings against some Member States in December, may take action against those companies which abuse their dominant position.

The report concludes that the new entrants seeking to rent copper lines from incumbents to deploy their own services (in particular broadband services) to end-users are confronted with two sets of problems: tariff and cost related problems inherent to the unsatisfactory economic conditions of unbundling throughout Europe; and behavioural problems, reflecting the reluctance of telecom incumbents to open their premises and facilities to their competitors.

Especiallly contentious appear to be the conditions of collocation and the related facilities. Collocation basically consists of the rental of space (each new entrant needs around 10 square meters to install its equipment) in the local exchanges of the incumbent and the right for the staff of new entrants to access the incumbent's buildings. New entrants blame high rental fees, the necessity to build separate rooms to accommodate their equipment and high fees for escorted access to the incumbents' premises.

The combination of expensive collocation conditions and high one-off fees (for activation/ deactivation of unbundled lines) has a clear economic translation and has led a number of operators to turn away from the market or leave aside the residential segment altogether. Many new entrants also allege that they are confronted with price squeezes. The problems reported by new entrants reflect possible infringements of competition law.