Illmarinen. European humor --duh, who's on first over there?
EU ponders legal action against
Germany over LLU
By Emily Bourne, Total Telecom
01 March 2002
The European Commission said Friday it is considering
legal action against the German government over its failure
to provide a line-sharing offer for the unbundled local loop.
In a separate announcement, the Commission released a
report based on a survey of 250 European competitive
carriers, setting out the telcos concerns about the
unbundling process. The report has been published and the
Commission has invited comment from industry parties
pending a public discussion this spring. In a statement, it
said it may take action against certain incumbents.
The Commission opened legal proceedings against the
governments of Germany, Greece and Portugal in
December 2001, prompted by their failure to produce a
reference offer and pricing for shared access (two telcos
using the same copper pair). A spokesman for the
Commission confirmed that action against Greece and
Portugal has been dropped because "they complied with the
regulation."
German case still pending
The case against Germany, however, "is still pending...
Germany still hasn't complied." He said the Commission
would decide later this year whether to initiate infringement
procedures, namely "bringing the government of Germany to
the European Court of Justice for non-compliance with the
requirements set out in the regulation."
However, a spokesman for the German Economic Ministry
told Reuters that Germany had responded to the
Commission's demands. "We are very surprised about the
EU statement," he said. "The deadline for the reply is
Monday and the German letter should have arrived at the
Commission's table on Friday morning."
An industry source told the newswire there was a difference
of opinion between the Commission and the German
government over the definition of a line-sharing product,
German law being based on individual contracts between
companies as opposed to openly-published prices. DT
signed its first line-sharing deal with alternative provider
QSC in December 2001.
The legal action being discussed would apply to the
Germany government and regulator, rather than to the
incumbent, but the spokesman said it does not preclude
action from the Commission against Deutsche Telekom if it
is judged to be abusing a dominant position.
Commission recommends action at national level
The Commission also released Friday a report by
Brussels-based law firm Squire Sanders, based on a survey
of alternative operators. Last year, a similar report was
compiled based on a survey of incumbents.
In a statement, the Commission said it will "recommend that
measures of redress be taken at the national level, in order
to remove the most conspicuous obstacles for unbundling....
The Commission may take action against the former
monopolists whose behaviour in the context of local loop
unbundling can be equated with an abuse of dominant
position."
Two complaints
The report found that there are two main complaints: tariff
and cost-related problems; and problems with the behaviour
of the incumbents.
The cost issues include: discriminatory prices for local loops
and services compared to those offered to the incumbent's
retail arm; excessive prices for local loops and services; and
predatory pricing, or price squeeze strategies whereby the
incumbent's retail services are priced below cost.
The behavioural problems include: refusals to supply
unbundled loops or facilities; unjustifiable delays;
discriminatory terms of provision; and the unjustifiable
bundling of services.
The report concludes that, since the issue is "fraught with
implementation difficulties and delays,... it may be desirable
to initiate competition law investigations at the
EEA/Community level in order to overcome existing
enforcement bottlenecks, lay down concrete guidelines as
regards particular practices and, where necessary, punish
flagrant abuses with administrative fines."
Line-sharing
The report found that in September 2001, shared access
was available in 14 of the 18 European Economic Area
(EEA) states: Austria, Belgium, Denmark, Finland, France,
Iceland, Ireland, Luxembourg, the Netherlands, Norway,
Portugal, Spain, Sweden and the U.K.
Shared access is not commercially available in Italy or
Germany (DT is reportedly offering shared access to certain
individuals). In Greece, the incumbent started to offer
shared access in December and prices are still under
consideration. In Liechtenstein, it is not available at all.
As of February 2002, Germany was the only state where the
incumbent's reference unbundling offer (RUO) does not
include shared access at a fixed public price.
Pending legal cases
The report also lists the actions being taken before NRAs
and competition authorities concerning local loop
unbundling. These include:
Excessive pricing, predatory pricing and margin squeezes
(Austria, France, Germany, Greece, Italy, the Netherlands,
Portugal, Sweden, the United Kingdom).
Delays in provisioning (Belgium, Portugal).
Colocation delivery terms (Belgium, France, Greece, the
Netherlands, Portugal, the United Kingdom).
Retail and wholesale xDSL products (France, Germany,
Italy, Spain, Sweden, the United Kingdom).
Absence or scarcity of network or service information
(France, the Netherlands, Norway, Spain, the United
Kingdom).
Technical conditions of unbundling (France).
Refusal to offer shared access (Germany, the
Netherlands).
Quality of services (Portugal, the United Kingdom).
Failure to comply with international standards in the RUO
(Norway).
The report concludes: "The net effect of these widespread
appeals, and the inevitable appeal of most if not all
decisions and judgements by the fixed incumbent operator,
is to create a climate of legal and business uncertainty,
which is exacerbating the practical difficulties faced by those
operators seeking access to the local loop."
The purpose of the report was "to try and identify issues
which appear to be problematic," Miranda Cole, senior
associate at Squire Sanders, told Total Telecom. The firm
has made recommendations on action to the Commission,
which have not been disclosed.
To read the publicly-available parts of the unbundling report,
click here. |
