WRITTEN QUESTION E-1798/02

by Elly Plooij-van Gorsel (ELDR) to the Commission

(24 June 2002)

Subject: 06760 KPN dial-up number

Last year Opta (the Netherlands telecom regulator) gave KPN the freedom to set up a special telephone number for internet dial-up numbers. Since then a number of Netherlands internet providers, including Planet Internet, have moved over to KPN's new dial-up network with a special 06760 dial-up number.

An initial consequence of this changeover is the fact that international dial-up is no longer possible. This has led to a sharp reduction in international use of e-mail by Planet Internet subscribers.

In addition, as a result of the change to the new 06760 number internet providers are unilaterally forcing subscribers to pay internet units to the relevant provider instead of to the telecom company with which the subscriber has a telephone subscription. The use of carrier-preselect numbers and cable telephone for internet access are also effectively made impossible as a result. The right of the consumer to enter freely into contracts is thus violated.

Finally, the risk of future price rises is considered to be high. There is a possibility of a non-transparent price structure and artificially set prices, since the profits from both internet subscriptions and internet units will go to internet providers. This is bad for competition and could lead to distortions.

1. Is the Commission aware of the introduction of the 06760 dial-up number by the KPN and of the problems caused by the changeover to this number by various internet providers?

2. Does the Commission take the view that in this case consumers' rights and freedom of choice are being infringed and competition distorted?

3. If so, does the Commission intend to take steps to deal with this, and if so, what steps?

Answer given by Mr Liikanen on behalf of the Commission

(31 July 2002)

1. The Commission is aware of the introduction of 06760-numbers in the Netherlands. These numbers have been introduced in the beginning of 2000 and are used for internet access. They were introduced to contribute to the solution for lack of capacity on KPN's telephony network. Traffic starting with 06760 is recognised by the KPN switch as internet traffic and will be disconnected from the telephony network and dealt with by a special data network. In July 2001 the national regulatory authority OPTA has decided to decrease the interconnection tariffs and possibly the interest of providers for the 06760-numbers has increased as a result of that decision. Internet Service Providers (ISPs) are in no way obliged to switch to 06760-numbers.

There are a number of different ways through 06760-numbers to dial-up to the internet via a telephony modem. There is the Friaco model (capacity at a fixed monthly charge), the Miaco model (capacity at a time-linked charge) and the collecting model. With the last model, which also uses a time-linked charge, KPN sends the bill to the end-user, with the Miaco model it is the operator or ISP who sends the bill. The ISP is free to choose its preferred option.

The costs for a 06760-number is set by the telecommunications operator or ISP itself, and depending on the model used, can be billed by itself. The freedom for the ISP to determine the tariff it charges the consumer and the larger choice of charges for the ISP will make it easier to compete on the prices, which is a positive development for the consumer.

On the basis of the continuing monitoring of the telecommunications markets, culminating in its annual implementation report, the Commission is aware of the possibility of the described problem of international dial-up and the use of carrier pre-selection (CPS) and cable telephony, which according to the Honourable Member is made effectively impossible with the use of 06760-numbers. At a national level the problems are already under the attention of OPTA, which will take action if necessary.

2. In case it is deemed necessary, for example when it would appear that it is indeed effectively impossible to pre-select a 06706-number, there could indeed be limitation in the freedom of choice for the consumer and possibly of distortion of competition. However, this is only the case if the KPN data network directly delivers the call to the end-user; in case of routing the call, the obligation for CPS does not exist. There is no obligation to impose CPS on ISPs.

3. At national level the mentioned problems are being analysed. In first instance it would have to be decided on the basis of national legislation which actions could be taken at the national level. In the framework of the preparations for the eighth implementation report the Commission will also monitor this issue closely and if necessary, take action to protect consumers.

In addition, the Commission wishes to inform the Honourable Member that a complaint concerning the 06760 KPN dial-up numbers has been lodged with the Commission's competition services, on the basis of an alleged infringement of the Community competition rules. The Commission is still examining the complaint and is in close contact with the Dutch national competition authority.