Race against time to clinch local loop deal

Date: 19/10/00

By Peter Chapman

The European Parliament is set to support proposals to force telecoms operators to offer rivals unfettered access to their local networks, but there is one potential sticking point which could delay agreement with member states.

An accord must be reached at lightening speed if Union leaders are to make good on their promise at the March 'dotcom' summit in Lisbon to have the legislation in place by 1 January. Governments said then that unbundling 'local loops' would boost Internet use across the EU because it would give service providers direct access to the phone lines into customers' homes which are still controlled by the former monopolies.

MEPs and governments are using a special 'fast-track procedure' to try to reach agreement on Enterprise Commissioner Erkki Liikanen's proposals before the deadline, bypassing the usual protracted discussions on planned Union legislation.

In a crucial first step, British liberal MEP Nick Clegg, the rapporteur on the issue for the assembly's industry committee, won the support of his colleagues when he presented a list of minor amendments to the proposals last week. Clegg is hoping the full Parliament will follow suit when his report is voted on at the plenary session in Strasbourg next Monday (23 October).

If it does, the next step would be for governments to accept Clegg's report in its entirety and rubberstamp the directive at a ministerial meeting in the first week of November. The MEP, who is a former European Commission official, has been holding talks with diplomats and the French presidency to try to ensure his report wins unqualified support from member states.

But one potential source of conflict remains. Responding to German demands, EU governments amended the Commission's proposals to ensure that firms such as Deutsche Telekom could not be forced to offer certain types of access if it were not technically or economically viable to do so. Clegg fears this could be used by errant operators as an excuse for failing to meet the 1 January deadline, and hopes to convince governments of the need to "tighten up" the wording.

When Union leaders pledged to unbundle local loops by the start of 2001, they claimed the move would give a long-awaited boost to Internet usage by the public. But America Online's EU regulatory affairs manager Simon Hampton says the proposals are more significant for small businesses than private consumers. "Local loop unbundling is important for business users because it means that people can compete to offer them broadband services instead of just what the incumbent chooses to offer," he said.

EU efforts to prise open the last bastion of the Union's former telecoms monopolies are hanging in the balance as MEPs and governments race against a tight deadline to adopt the proposed legislation.