Bid to boost competition in telecoms

Date: 10/02/2000

By Peter Chapman

TELECOMS chief Erkki Liikanen is set to unveil plans to boost competition in one of the last bastions of the former telecoms monopolies.

Officials say the Finnish Commissioner is drawing up recommendations for national regulators which will call on the former monopoly operators to give rivals fairer access to their local networks ('local loops') that go direct into customers' homes and businesses.

Under the plan, operators would be able to rent access to these raw copper wires without having to pay for a 'bundle' of extra services such as local telephone exchanges.

Supporters of the move claim this is vital to allow rival firms direct access to customers without having to bear the often prohibitive expense of building their own networks. They say unbundling would also allow competitors to develop and market services carried over the incumbents' networks, such as fast Internet access.

A report by the Dutch unit of consultancy firm Forrester Research has warned that there is far less potential for unbundling in the EU than the Commission hopes, arguing this is limited by the poor quality of local networks which are often up to 100 years old. Increasingly areas are also starting to offer modern alternatives to the traditional local loop based on fibre optic and wireless technology.

But Liikanen's aides insist the move is a vital part of the Commission's efforts to kick-start the EU's cyber-economy. "It is only by unbundling the local loop and imposing more competition into the last mile that the use of the Internet and electronic commerce will take off," said one.

He stressed, however, that the Commission's plans were "still not set in stone". The institution plans to consult operators and users at a public hearing in Brussels before issuing a non-binding recommendation in April.