Proposal for a Regulation of the European Parliament and of the Council on unbundled access to the local loop
Date: 2000-07-12
Institutions: European Commission
Subjects: approximation of laws, competition, telecommunications, telephone charges, transmission network

C 365 E/212

EN

Official Journal of the European Communities

19.12.2000

Proposal for a Regulation of the European Parliament and of the Council on unbundled access to
the local loop

(2000/C 365 E/15)

(Text with EEA relevance)

COM(2000) 394 final (cid:16) 2000/0185(COD)

(Submitted by the Commission on 23 August 2000)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 95 thereof,

Having regard to the proposal from the Commission,

cations market. New entrants do not have wide-spread
alternative network infrastructures and are unable, with
traditional technologies, to match the economies of scale
and scope of operators notified as having significant
market power in the fixed public telephone network
market (:notified operators;). This results from the fact
that operators rolled out their old copper local access
networks over significant periods of time protected by
exclusive rights and were able to fund investment costs
through monopoly rents.

Having regard to the opinion of
Committee,

the Economic and Social

Having regard to the opinion of the Committee of the Regions,

Acting in accordance with the procedure laid down in Article
251 of the Treaty,

Whereas:

(1) The conclusions of

the special European Council of
Lisbon of 23 and 24 March 2000 note that, for Europe
to fully seize the growth and job potential of the digital,
knowledge-based economy, businesses and citizens must
have access to an inexpensive, world-class communi-
cations infrastructure and a wide range of services. The
Member States, together with the Commission, are called
upon :to work towards introducing greater competition in
local access networks before the end of 2000 and
unbundling the local loop, in order to help bring about
a substantial reduction in the costs of using the Internet;.
The Feira European Council of 20 June 2000 endorsed
the proposed eEurope Action Plan (1) which identifies
loop as a short-term
unbundled access to the local
priority.

(2) The :local loop; is the physical copper line circuit in the
local access network connecting the customer’s premises
to the operator’s local switch, concentrator or equivalent
facility. As noted in the Commission’s Fifth Report on the
implementation of
regulatory
package (2), the local access network remains one of the
least competitive segments of the liberalised telecommuni-

the telecommunications

(3) The European Parliament Resolution of 13 June 2000 on
the Commission communication on the 1999 Communi-
cations review (3) stresses the importance of enabling the
sector
to develop infrastructures which promote the
growth of electronic communications and e-commerce
and the importance of regulating in a way that supports
this growth. It notes that the unbundling of the local loop
is currently mainly relevant to the copper infrastructure
of a dominant entity and that investment in alternative
infrastructures must have the possibility of ensuring a
reasonable rate of return, since that might facilitate the
expansion of these infrastructures in areas where their
penetration is still low.

(4) The provision of new loops with high capacity optical
fibre directly to major users is a specific market that is
conditions with new
developing under
investments. This Regulation therefore does not address
unbundled access to fibre local loops.

competitive

(5) It would not be economically viable for new entrants to
duplicate the incumbent’s copper local loop access infra-
structure in its entirety and within a reasonable time.
Alternative
television,
loops do not generally offer the
satellite, wireless local
same functionality or ubiquity.

infrastructures

such as

cable

(6) It

local

is appropriate to mandate unbundled access to the
loops only of notified operators. The
copper
Commission has already published an initial
list of
operators of fixed public telephone networks notified by
the national regulatory authorities as having significant
market power (4).

(1) COM(2000) 330 final.
(2) COM(1999) 537.

(3) AS-0145/2000.
(4) OJ C 112, 23.4.1999, p. 2.

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Official Journal of the European Communities

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(7) Although commercial negotiation is the preferred method
for reaching agreement on technical and pricing issues for
local
loop access, experience shows that in most cases
regulatory intervention is necessary due to imbalance in
negotiating power between the new entrant and the
notified operator, and lack of other alternatives. Notified
operators
should provide information and unbundled
access to third parties under the same conditions and of
the same quality as they provide for their own services or
those of their subsidiaries or partners. To this end, the
publication by the notified operator of an adequate
reference offer for unbundled access to the local
loop,
within a short time-frame and ideally on Internet, and
under the supervisory control of the national regulatory
authority, would contribute to creating transparent and
non-discriminatory market conditions. In certain circum-
stances
in
regulatory
authority may,
intervene at its own
accordance with Community law,
including pricing rules,
to impose
initiative
designed to ensure interoperability of services, maximise
economic efficiency and benefit end-users.

the national

terms,

(8) Costing and pricing rules for local loops and associated
facilities (such as co-location and leased transmission
capacity) should be transparent, non-discriminatory and
be objective to ensure fairness. Pricing rules
should
ensure that the local
loop provider is able to cover its
appropriate costs in this regard plus a reasonable return.
fair and
Pricing rules
loops
local
there is no
sustainable competition and ensure that
distortion of
in particular no margin
competition,
squeeze between prices of wholesale and retail services
of the notified operator. In this regard, it is considered
important that competition authorities be consulted.

should foster

for

to the

(9) In Recommendation 2000/417/EC of 25 May 2000 on
loop:
enabling the
unbundled access
local
competitive provision of a full
range of electronic
communications services including broadband multimedia
and high-speed Internet (1) and the Communication of 26
April 2000 (2), the Commission set out detailed guidance
to assist national regulatory authorities on the fair regu-
lation of different forms of unbundled access to the local
loop and on the application of existing Community law.

(10)

In accordance with the principles of subsidiarity and
proportionality as set out in Article 5 of the Treaty, the
objective of achieving a harmonised framework for
unbundled access to the local
loop in order to enable
the competitive provision of an inexpensive, world-class
infrastructure and a wide range of
communications
the
services

businesses

citizens

and

for

all

in

(1) OJ L 156, 29.6.2000, p. 44.
(2) COM(2000) 237.

Community cannot be achieved by the Member States
in a secure, harmonised and timely manner and can
therefore be better achieved by the Community. This
Regulation confines itself to the minimum required in
to achieve those objectives and does not go
order
beyond what is necessary for that purpose,

HAVE ADOPTED THIS REGULATION:

Article 1

Scope

(1)
This Regulation shall apply to unbundled access to the
local loops of network operators that have been notified to the
Commission by the national regulatory authority as having
significant market power in the provision of
fixed public
in accordance with the
telephone networks and services
relevant Community provisions
referred to as
:notified operators;).

(hereinafter

operators

the relevant Community provisions
principle

This Regulation shall apply without prejudice to the
(2)
for
obligation under
notified
of
non-discrimination when using the fixed public telephone
network to provide high-speed access
and transmission
services to third parties under the same conditions as to its
own services.

comply with

the

to

Article 2

Definitions

For the purposes of this Regulation:

(a) :local

loop; means the physical copper line circuit in the
local access network connecting the customer’s premises to
the fixed public telephone network operator’s local switch,
concentrator or equivalent facility;

(b) :unbundled access to the local loop; means full unbundled
access to the local loop and shared access to the local loop;
it does not entail a change in ownership of the copper local
loop;

to the local

the
(c) :full unbundled access
provision of access
the
to the copper
incumbent operator, in such a way that the new entrant
has exclusive use of the full frequency spectrum of the
copper line and can offer a full range of voice and data
services to end-users;

loop; means
loop of

local

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Official Journal of the European Communities

19.12.2000

(d) :shared access to the local

loop; means the provision of
access to the non-voice frequency spectrum of a copper
line over which the basic telephone service is being
provided to the end-user by the incumbent operator
allowing a new entrant to deploy technologies D such as
asymmetrical digital subscriber line (ADSL) systems D to
provide the end-user with additional
such as
high-speed Internet access;

services

(e) :co-location; means the provision of physical space and
technical conditioning necessary to reasonably accom-
modate and connect the equipment of a new entrant to
access the local loop.

Article 3

Provision of unbundled access

under

1.
Notified operators shall make available to third parties, by
31 December 2000 at the latest, unbundled access to the local
loop,
non-discriminatory
conditions. Notified operators shall provide competitors with
the same facilities as they provide to themselves or to their
associated companies, and with the same conditions and time-
scales.

transparent,

and

fair

2.
Notified operators shall provide physical access for third
parties to any technically feasible point of the copper local
loop or sub-loop where the new entrant can co-locate and
connect its own network equipment and facilities in order to
deliver services to its customer, either in the local switch,
concentrator or equivalent facility.

Notified operators shall publish, by 31 December 2000 at
3.
the latest, a reference offer for the unbundled access to the
including co-location,
local
the
sufficiently unbundled, and containing a description of

loops and associated facilities

component offerings and the associated terms and conditions,
including prices, taking account of the list in the Annex to
Recommendation 2000/417/EC.

Article 4

Regulatory supervision

authorities

1.
For as long as the level of competition in the local access
network is insufficient to prevent excessive pricing, national
regulatory
for
unbundled access
loop charged by notified
operators follow the principle of cost orientation. National
regulatory authorities shall be competent where justified to
the unbundled
impose changes in the reference offer
access to the local loop, including prices.

shall
to the local

the prices

ensure

that

for

In adopting pricing rules and price decisions on unbundled
loop, national regulatory authorities shall
access to the local
ensure that they foster fair and sustainable competition.

National regulatory authorities shall be competent

to
2.
resolve disputes between undertakings
concerning issues
included in this Regulation, in a prompt, fair and transparent
manner.

Article 5

Entry into force

This Regulation shall enter
into force on the third day
following that of its publication in the Official Journal of the
European Communities.

This Regulation shall be binding in its entirety and directly
applicable in all Member States.