BT awaits opinion on leased lines directive

Date: 15/02/1996

By Fiona McHugh

THE road to Europe's open telecoms market is not proving smooth.

Directive upon directive has poured out of Brussels in recent years to prepare the way for full liberalisation due at the beginning of 1998.

But despite the volume of laws adopted in EU member states, problems remain, even in one of the Union's model markets - the UK.

The Secretary of State for Trade and Industry stands accused by British Telecommunications (BT), the country's largest operator, of unfairly implementing EU rules which, ironically, were designed to ensure non-discrimination in a liberalised environment.

Those rules, adopted by EU telecoms ministers in 1992, obliged incumbent operators to lease their phone lines to newcomers at a reasonable price and to keep a clear record of prices charged.

The European Commission believed that this would prevent market entrants from being crushed by established competitors.

However, when the UK government transposed the leased lines directive into national law, it applied it to only three of a number of telephone companies, BT, Mercury and Kingston, prompting allegations of unfair treatment from BT, which has demanded that the law be applied evenly or not at all.

The UK government justifies its action by saying that the three enjoy “special and exclusive rights”, and so must obey special and exclusive laws.

It is now up to the European Court of Justice to decide which of the two parties is in the right.

A preliminary opinion due to be delivered by Advocate-General Giuseppe Tesauro today (15 February) will advise the full Court on whether the leased lines directive should apply only to firms with “special or exclusive rights” and, if so, whether BT enjoys such rights.

Tesauro will also make a recommendation to the judges on whether or not damages should be awarded to compensate the telephone operator for any revenue lost as a result of unfair treatment, should the UK government lose the case.