Open telecoms markets hailed as a ‘success’

Date: 04/11/1999

By Peter Chapman

EUROPEAN Commission telecoms chief Erkki Liikanen is set to pat member states on the back for their efforts to follow the Union's liberalisation rule book.

Top aides to the Finnish Commissioner say the latest telecoms implementation report, due to be unveiled later this month, will point to huge progress since former Industry Commissioner Martin Bangemann chided governments last year for failing to implement a raft of complex telecom rules and regulations. "The general message is that liberalisation is a success," said one senior Liikanen aide.

The Commissioner will, however, highlight one remaining cause for particular concern - the failure of member states to ensure competition in local telecoms markets, despite EU rules designed to bring this about.

Offcials point out that the Commission has already announced plans to bolster an EU directive on 'leased lines', which has so far failed to ensure new telecoms operators and businesses rental capacity on lines from former monopolies at a fair price. The institution intends to tackle this by publishing new benchmark rates for local 'leased lines' in town and cities, in a bid to reduce the prices charged by operators.

It has also announced plans for separate measures to force the former monopolies to 'unbundle' their local networks. These would require operators to give rivals access to the basic copper cables which go directly to customers' homes at a 'cost-based' price. Competitors could then add extra services to the network, including technology designed to increase its speed.

The report also concludes that progress has been made in forcing former monopoly operators to offer rivals fair 'interconnection' rates - the fees they charge for carrying calls which begin on rivals' networks to a destination on their own network.

An internal Commission study has revealed that a number of incumbents, including Deutsche Telekom, are ignoring EU benchmarks designed to shame operators into dropping their tariffs. However, officials say these transgressions are relatively mild. They claim the benchmarks have been a success and will only be revised slightly downwards later this year.

Nor will Liikanen rush to regulate the cost of dialling up Internet Service Providers, despite calls from Internet company AOL Europe for telecoms operators to be forced to offer US-style 'unmetered' prices for local calls to access ISPs.

Officials say the Commissioner believes it would be "premature" to intervene while the market is still developing. They point out that some operators are already poised to make special phone numbers available to ISPs, allowing them to offer unmetered access to customers.

European Commission telecoms chief Erkki Liikanen is set to pat Member States on the back for their efforts to follow the Union's liberalisation rule book.