Berlin attacks telecoms ‘unbundling’ plan

Date: 13/07/2000

By Peter Chapman

GERMANY is set to oppose Enterprise Commissioner Erkki Liikanen's approach towards implementing one of the linchpins of the raft of proposed new telecoms rules unveiled this week.

Liikanen went further than expected when he announced plans for an EU regulation to require former monopoly operators to open up ('unbundle') their local networks to rivals before the end of this year.

The Commissioner insists this is necessary if he is to deliver on the pledge made by Union leaders at their Lisbon summit in March to introduce unbundling by December, in a bid to kick start competition in one of the last bastions of the former monopolies and boost EU citizens' access to the Internet. Likkanen says his original, less ambitious plans would have taken too long to implement and would not have been in place before 2002.

But sources in Berlin say former monopoly operator Deutsche Telekom, Germany's telecoms regulator and the government are all opposed to Liikanen's new approach, claiming it would interfere with the country's existing efforts to open up local networks.

They say that under local rules in force since 1998, Deutsche Telekom is already required to offer rival operators 'fully unbundled' access to their networks. This allows competitors to buy access to Telekom's basic copper network direct into customers' homes and offices, giving them the opportunity to add extra services as they see fit.

Berlin says Liikanen's proposals would force operators to offer two other forms of unbundling not currently required in Germany, adding to bureaucracy and costs instead of delivering on his promise to cut red tape.

These include 'shared access', where rival operators can rent the high-frequency parts of the local network, allowing them to offer high-speed data services while the network owner continues to provide telephone services; and 'bit-stream' access, which entails the incumbent giving rival operators access to high-speed services to customers premises.

"We feel this is more regulation and not less," said a Deutsche Telekom executive, adding: "This is not just us, but the government and the regulator, too - and we do not always agree on things."

He said Telekom was particularly opposed to the shared access option, claiming that it would impose new technology requirements and complex pricing systems on firms. "We are saying that we have had unbundling for two and a half years and if other member states think it is necessary to introduce other forms of unbundling, then they should be able to decide what to chose through subsidiarity."

Liikanen has already been criticised by industry for other parts of his telecoms package, including draft rules on data protection and his proposal to use the new regulations to target firms deemed to be dominant in their market sector, in line with EU competition rules.

Competition Commissioner Mario Monti's aides said this week that the move to make unbundling compulsory by the end of this year would be accompanied by the launch of a competition probe into the issue.

His officials are writing to former telecoms monopolies asking what they have done since the Commission published a recommendation earlier this year calling on them to unbundle their local networks unilaterally.

Germany is set to oppose Enterprise Commissioner Erkki Liikanen's approach towards implementing one of the linchpins of the raft of proposed new telecoms rules. Liikanen went further than expected when he announced plans for an EU regulation to require former monopoly operators to open up ('unbundle') their local networks to rivals before the end of 2000.