WRITTEN QUESTION E-0283/01

by Alexander Radwan (PPE-DE) to the Commission

(9 February 2001)

Subject: Internet access

It is the aim of the EU to enable ever more citizens to have low-cost access to the Internet. One obstacle to this is the fact that Internet service providers (ISPs) still link

their prices to connection time. A real breakthrough in Internet use will only be achieved when the user is able to experience and use the Internet without time pressure, i.e. if unmetered Internet access is available.

Many ISPs are trying to stop the ticking meter for the consumer. However, these ISPs then face risks which are hard to calculate, since the telecommunications firms charge for the necessary upstream products only in the form of a metered tariff, not at a flat rate. Consequently, flat rate Internet services are offered even more rarely.

Does the Commission consider that one reason for this is that the former monopolies in particular mostly charge by the minute and not on the basis of capacities? The regulatory authorities in the UK and the Netherlands have now compelled the former monopolies to sell capacities to ISPs at a flat rate. What is the Commission's view of the FRIAGO model? Does the Commission consider it necessary that telecommunications firms should make a similar offer to industrial providers? If so, what form should this take and how should it be implemented?

Answer given by Mr Liikanen on behalf of the Commission

(18 April 2001)

Flat rate internet access is offered in a number of Member States, either by the incumbent or by alternative market players. There are also many other tariff packages offered to Internet users, such as subscription-free Internet access. The regulatory authorities in the Netherlands and the UK have, in arriving at their decisions to compel the former incumbents to provide Flat Rate Internet Access Call Origination (FRIACO) to other market players, taken into account the specific situation in their markets. The FRIACO model, where Internet service providers (ISPs) and other market players pay the incumbent a flat rate for call origination, instead of a metered tariff, and where access has to be offered on non-discriminatory terms, appears an efficient measure in the Netherlands and UK markets. The Commission welcomes the decisions of the regulators in the UK and in the Netherlands to apply the FRIACO model, although there is currently no legal basis in Community legislation enabling the Commission to force the regulatory authorities in all Member States to adopt the same approach.

As mentioned in the Sixth Report on implementation of the telecommunications regulatory package, a quarter of the EU population used the Internet (at home, at work or at school) during the first half of 2000, and the number of ISPs has increased in most Member States, with at least one hundred local or national ISPs in the market in many, and in some several hundred. The number of Internet hosts per 1 000 inhabitants has increased in all Member States, with average growth in the EU of 33 % between July 1999 and January 2000. The Sixth Report, based on OECD (Organisation for Economic Co-operation and Development) data, also showed that Internet access costs were slightly higher in the EU than in the USA, in March 2000.

The Commission has recently taken a number of important measures with relevance for the Internet. The European Council of Lisbon on 23 and 24 March 200 called for the Member States, together with the Commission, to introduce greater competition in local access networks by unbundling the local loop, in order to help bring about substantial reductions in the costs of using the Internet. The Feira European Council of 19-20 June 2000 endorsed the e-Europe 2002 Action Plan(1) which identifies unbundled access to the local loop as a short term priority. Unbundled access to the local loop inter alia allows new entrants to compete with established operators by offering high bit-rate data transmission services for continuous Internet access based on digital subscriber line (DSL) technology. The resulting Regulation on local loop unbundling(2) requires all former incumbents to provide unbundled access to the local loops as of 31 December 2000.

(1) e-Europe An Information Society For All, of 14 June 2000, prepared by the Council and the European Commission for the Feira European Council 19-20 June 2000.

(2) Regulation (EC) 2887/2000 of the Parliament and of the Council of 18 December 2000 on unbundled access to the local loop, OJ L 336, 30.12.2000.