Old monopolies tie up telecoms market, say rivals

Date: 22/11/01

New-entrant telecom firms have accused old state-owned operators of trying to squeeze them out of a vital part of the market.

Chief executives, including Bernard Ebbers of US giant WorldCom and Duncan Lewis of pan-EU firm Ebone, have warned the European

Commission that the more established firms are unfairly using their dominant positions for "local leased lines".

They have written to Mario Monti, the competition commissioner, and Erkki Liikanen, his telecoms counterpart, to underline their concerns.

Companies such as WorldCom use the leased lines - the last 50km of a telephone circuit - to make the final connection between their clients and their own long-distance networks.

But the executives claim the established operators are thwarting new entrants' efforts to grab a fair share of the market - and regulators are doing little to stop them.

"Without swift action...the bottleneck control that incumbents currently wield will stifle nascent competition and harm economic growth across Europe," they warn.

They say leased-line prices vary as much as 300 from country to country across the EU, while delivery times for lines are "showing extraordinary deterioration", with some firms forced to wait nine months for a connection in Germany.

Prices in France are more than double EU recommended levels; and in the UK, British Telecom is accused of making "exorbitant" charges and imbedding "restrictive technical limitations in the fine print" in their contracts with new entrants.

Firms trying to get a foothold in the Netherlands, Spain, Italy and Ireland face similar barriers, they say.

The warning comes as Commission officials prepare to unveil the latest "implementation report" on the way member states have applied existing EU telecom laws.

Critics claim the old monopolies' behaviour is a signal that the Commission has failed to enforce rules of fair play when markets were liberalised in 1998.

The Union is adding the final touches to a regulatory framework, which will place even more onus on the way national regulators implement EU laws.

New-entrant telecom firms have accused old state-owned operators of trying to squeeze them out of a vital part of the market.