Amended proposal for a Regulation of the European Parliament and of the Council on unbundled access to the local loop (presented by the Commission pursuant to Article 250 (2) of the EC Treaty)
Date: 2000-11-22
Institutions: European Commission
Subjects: approximation of laws, competition, telecommunications, telephone charges, transmission network

C 62 E/314

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Official Journal of the European Communities

27.2.2001

Amended proposal for a Regulation of the European Parliament and of the Council on unbundled
access to the local loop (1)

(2001/C 62 E/23)

(Text with EEA relevance)

COM(2000) 761 final (cid:16) 2000/0185(COD)

(Submitted by the Commission pursuant to Article 250(2) of the EC Treaty on 22 November 2000)

(1) OJ C 365 E, 19.12.2000.

INITIAL PROPOSAL

AMENDED PROPOSAL

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Unchanged

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

Having regard to the proposal from the Commission,

Having regard to the opinion of
Committee,

the Economic and Social

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

Deleted

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

Unchanged

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
Plan (1) which identifies
proposed
unbundled access
loop as a short-term
priority.

eEurope Action

to the local

___________
(1) COM(2000) 330 final.

(1a) Local

loop unbundling will complement

the existing
provisions in Community law guaranteeing universal
service and affordable access for all citizens in the
European Union by enhancing competition, ensuring
economic efficiency and bringing maximum benefit to
users.

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INITIAL PROPOSAL

AMENDED PROPOSAL

the telecommunications

(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 (1), the local access network remains one of the
least competitive segments of the liberalised telecommuni-
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.

(2) The ;local loop< is the physical twisted metallic pair circuit
in the fixed public telephone network connecting the
network termination point at the subscriber’s premises
to the main distribution frame or equivalent facility. As
noted in the Commission’s Fifth Report on the implemen-
tation of the telecommunications regulatory package (1),
the local access network remains one of
the least
the liberalised telecommuni-
competitive segments of
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
(hereinafter referred to as ;notified operators<).
This results from the fact that these operators rolled out
their old metallic
infrastructures over
significant periods of time protected by exclusive rights
and were
through
to fund investment
able
monopoly rents.

access

costs

local

Unchanged

(3) The European Parliament Resolution of 13 June 2000 on
the Commission communication on the 1999 Communi-
cations review (2) 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 infra-
structures must have
ensuring a
reasonable rate of return, since that might facilitate the
expansion of these infrastructures in areas where their
penetration is still low.

the possibility of

(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

(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 addresses access
to metallic local loops, without prejudice to national obli-
gations regarding other types of access to local
infra-
structures.

competitive

___________
(1) COM(1999) 537.
(2) AS-0145/2000.

___________
(1) COM(1999) 537.

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INITIAL PROPOSAL

AMENDED PROPOSAL

(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,
satellite, wireless local
loops do not generally offer the
same functionality or ubiquity.

infrastructures

such as

cable

(5) It would not be economically viable for new entrants to
duplicate the incumbent’s metallic local 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 for
the time being,
though situations in Member States may differ.

infrastructures

such as

cable

data

transmission services

(5a) Unbundled access to the local loop allows new entrants
to compete with notified operators in offering high
bit-rate
continuous
Internet access and for multimedia applications based
on digital subscriber line (DSL) technology as well as
voice telephony services. A reasonable request
for
unbundled access implies that the access is necessary
for the provision of the services of the beneficiary, and
that refusal of
the request would prevent, restrict or
distort competition in this sector.

for

(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 (1).

(6) This regulation mandates unbundled access to the metallic
local
loops only of those network operators that have
been designated by the national regulatory authorities as
in the fixed public
having significant market power
telephone network supply network under the relevant
Community provisions. Member States have already
notified to the Commission the names of
those fixed
public network operators that have significant market
power under Annex I Part 1 of Directive 97/33/EC of
the European Parliament and of the Council of 30 June
1997 on interconnection in telecommunications with
regard to ensuring universal service and interoperability
through application of the principles of Open Network
the
and Directive
Provision
European Parliament and of the Council of 26 February
1998 on the application of open network provision to
voice telephony and on universal service for telecommuni-
cations in a competitive environment.

98/10/EC of

(ONP),

(6a) A notified operator cannot be required to provide types
of access which are not within its powers to provide, for
example where fulfilment of a request would cause a
violation of
third
party. The obligation to provide unbundled access to
the local
loop does not imply that notified operators
should install entirely new local network infrastructure
specifically to meet beneficiaries’ requests.

the legal rights of an independent

___________
(1) OJ C 112, 23.4.1999, p. 2.

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INITIAL PROPOSAL

AMENDED PROPOSAL

(7) Although commercial negotiation is the preferred method
for reaching agreement on technical and pricing issues for
loop access, experience shows that in most cases
local
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-
in
regulatory
stances
intervene at its own
accordance with Community law,
initiative
including pricing rules,
to impose
designed to ensure interoperability of services, maximise
economic efficiency and benefit end-users.

authority may,

the national

terms,

(8) Costing and pricing rules for local

loops and associated
facilities (such as collocation 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
sustainable competition and ensure that
there is no
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

(7) Although commercial negotiation is the preferred method
for reaching agreement on technical and pricing issues for
loop access, experience shows that in most cases
local
regulatory intervention is necessary due to imbalance in
negotiating power between the new entrant and the
notified operator, and lack of other alternatives.
In
certain circumstances the national regulatory authority
intervene at
may,
its own initiative in order to ensure fair competition,
economic efficiency and maximum benefit for end-users.
Failure of the notified operator to meet lead times should
entitle the beneficiary to receive compensation.

in accordance with Community law,

(8) Costing and pricing rules for local

loops and related
facilities 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,
to ensure the long term development and
in order
upgrade of
local access infrastructure. Pricing rules for
local loops should foster fair and sustainable competition,
bearing in mind the need for investment in alternative
infrastructures, and ensure that there is no distortion of
in particular no margin squeeze between
competition,
prices of wholesale and retail services of
the notified
operator. In this regard, it is considered important that
competition authorities be consulted.

should provide
to third parties under

(8a) Notified operators
information and
the same
unbundled access
conditions and of the same quality as they provide for
their own services or those of their associated companies
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 the Internet, and under the supervisory control
of the national regulatory authority, would contribute to
the
and non-discriminatory
market conditions.

creation of

transparent

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INITIAL PROPOSAL

AMENDED PROPOSAL

to the

(9) In Recommendation 2000/417/EC of 25 May 2000 on
loop:
enabling the
unbundled access
local
range of electronic
competitive provision of a full
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.

to the

(9) In Recommendation 2000/417/EC of 25 May 2000 on
loop:
enabling the
unbundled access
local
range of electronic
competitive provision of a full
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.

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

businesses

citizens

and

for

all

in

all

for

businesses

(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
services
the
Community cannot be achieved by the Member States
in a secure, harmonised and timely manner and can
therefore be better achieved by the Community. The
provisions of this Regulation confines themselves to the
minimum required in order to achieve those objectives
and do not go beyond what
that
purpose. They are adopted without prejudice to national
provisions complying with this Regulation which set out
more detailed measures, for example dealing with virtual
collocation.

is necessary for

citizens

and

in

(10a) The provisions of this Regulation complement the regu-
latory framework for telecommunications,
in particular
Directives 97/33/EC and 98/10/EC; it is envisaged that
the new regulatory framework for electronic communi-
cations will include appropriate provisions to replace this
Regulation,

HAVE ADOPTED THIS REGULATION:

Unchanged

Article 1

Scope

Aim and scope

This Regulation aims at

intensifying competition and
1.
local access
stimulating technological
market,
through the setting of harmonised conditions for
unbundled access to the local loop, to foster the competitive
provision of a wide range of electronic communications
services.

innovation on the

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

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

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INITIAL PROPOSAL

AMENDED PROPOSAL

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

This Regulation shall apply to unbundled access to the local
loops and related facilities of fixed public telephone network
operators that have been designated by the national regulatory
authority as having significant market power in the provision
of fixed public telephone network in relation to Annex I part 1
to Directive 97/33/EC or Directive 98/10/EC.

2.
This Regulation shall apply without prejudice to the obli-
gation under the relevant Community provisions for notified
operators to comply with the principle 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.

2.
This Regulation shall apply without prejudice to the obli-
gations for notified operators to comply with the principle 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 or to associated companies, in accordance with
Community provisions.

States

to maintain or

This Regulation is without prejudice to the rights of
2a.
Member
in
conformity with Community law, that contain more detailed
provisions than those set out in this Regulation and/or are
outside the scope of this Regulation inter alia with respect to
other types of access to local infrastructures.

introduce measures

Article 2

Definitions

Unchanged

For the purposes of this Regulation:

(a) ;notified operator< means operators of

fixed public
telephone networks that have been designated by their
national regulatory authority as having significant market
power in the provision of fixed public telephone networks
and services under Annex I Part 1 to Directive 97/33/EC or
Directive 98/10/EC;

(b) ;beneficiary< means a third party duly authorised in
accordance with Directive 97/13/EC or entitled to provide
communications services under national
legislation, and
which is eligible for unbundled access to a local loop;

(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

(a) ;local loop< means the physical twisted metallic pair circuit
connecting
the
subscriber’s premises to the main distribution frame or
equivalent facility in the fixed public telephone network;

termination

network

point

the

at

(aa) ;local sub-loop< means a partial local loop connecting the
network termination point at the subscriber’s premises to a
concentration point or a specified intermediate access point
in the fixed public telephone network;

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INITIAL PROPOSAL

AMENDED PROPOSAL

(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;

(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 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

(c) ;full unbundled access

the
provision to a beneficiary of access to the local
loop or
sub-loop of the notified operator authorising the use of
the full frequency spectrum of the twisted metallic pair;

to the local

loop< means

(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 E such as
asymmetrical digital subscriber line (ADSL) systems E to
provide the end-user with additional
such as
high-speed Internet access

services

(d) ;shared access to the local loop< means the provision to a
beneficiary of access to the local loop or local sub-loop of
the notified operator, authorising the use of the non-voice
band frequency spectrum of the twisted metallic pair; the
local loop continues to be used by the notified operator to
provide the telephone service to the public;

(e) ;collocation< 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

(e) ;collocation< means the provision of physical space and
technical
facilities necessary to reasonably accommodate
and connect the relevant equipment of a beneficiary, as
mentioned in section B of the Annex;

(f)

;related facilities< means the facilities associated with the
loop, notably
provision of unbundled access to the local
collocation, cable connections and relevant
information
technology systems, access to which is necessary for a bene-
ficiary to provide services on a competitive and fair basis.

Article 3

Provision of unbundled access

Unchanged

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

the items

1.
Notified operators shall publish from 31 December 2000,
and keep updated, a reference offer for unbundled access to
loops and related facilities, which shall include at
their local
shall be
least
sufficiently unbundled so that the beneficiary does not have
to pay for network elements or
facilities which are not
necessary for the supply of its services, and shall contain a
description of the component offerings, associated terms and
conditions, including charges.

listed in the Annex. The offer

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INITIAL PROPOSAL

AMENDED PROPOSAL

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 collocate 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

2.
Notified operators shall from 31 December 2000 meet
reasonable requests from beneficiaries for unbundled access to
loops and related facilities, under transparent, fair
their local
and non-discriminatory conditions. Requests shall only be
refused on the basis of objective criteria, relating to technical
feasibility or the need to maintain network integrity. Where
access is refused, the aggrieved party may submit the case to
the dispute resolution procedure referred to in Article 4(2).
Notified operators
shall provide beneficiaries with the
equivalent facilities as they provide to themselves or to their
associated companies, and with the same conditions and time-
scales.

2a.
Notified operators shall charge prices for unbundled
access to the local loop and related facilities set on the basis
of cost-orientation. The national regulatory authority shall lift
the obligation for prices to be set on the basis of cost-orien-
tation in accordance with Article 4(1c).

loops and associated facilities

3.
Notified operators shall publish, by 31 December 2000 at
the latest, a reference offer for the unbundled access to the
including collocation,
local
sufficiently unbundled, and containing a description of
the
component offerings and the associated terms and conditions,
including prices, taking account of the list in the Annex to
Recommendation 2000/417/EC.

Deleted

Regulatory Supervision

Supervision by the national regulatory authority

Article 4

that

ensure

authorities

the prices

shall
to the local

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
impose changes in the reference offer
the unbundled
access to the local loop, including prices. In adopting pricing
rules and price decisions on unbundled access to the local loop,
national regulatory authorities shall ensure that they foster fair
and sustainable competition.

for

The national

1.
charging for unbundled access to the local
and sustainable competition.

regulatory authority shall ensure that
loop fosters fair

The national regulatory authority shall have the power

1a.
to:

(a) impose changes on the reference offer for unbundled access
including prices,
loop and related facilities,

to the local
where such changes are justified; and

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INITIAL PROPOSAL

AMENDED PROPOSAL

(b) require notified operators to supply information relevant

for the implementation of this Regulation.

1b.
The national regulatory authority may intervene, where
justified, on its own initiative in order to ensure non-discrimi-
nation, fair competition, economic efficiency and maximum
benefit for users.

1c. When the national regulatory authority determines that
the local access market
it shall
relieve the notified operators of the obligation laid down in
Article 3(2a) for prices to be set on the basis of cost-orien-
tation.

is sufficiently competitive,

National regulatory authorities shall be competent

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

between

Disputes

undertakings

2.
issues
included in this Regulation shall be subject to the national
dispute resolution procedures established in conformity with
Directive 97/33/EC and shall be handled promptly, fairly and
transparently.

concerning

Article 5

Entry into force

Unchanged

into force on the third day
This Regulation shall enter
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.

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ANNEX

MINIMUM LIST OF ITEMS TO BE INCLUDED IN A REFERENCE OFFER FOR UNBUNDLED ACCESS TO THE
LOCAL LOOP TO BE PUBLISHED BY NOTIFIED OPERATORS

A. Conditions for unbundled access to the local loop

1. Network elements to which access is offered, covering in particular the following elements:

E access to local loops,

E access to non-voice band frequency spectrum of a local loop, in the case of shared access to the local loop;

2. Information concerning the locations of physical access sites (Availability of this information may be restricted to
only interested parties to avoid concerns on public security), availability of local loops in specific parts of the
access network;

3. Technical conditions related to access and use of local loops, including the technical characteristics of the twisted

metallic pair in the local loop;

4. Ordering and provisioning procedures, usage restrictions.

B. Collocation services

5. Information on the notified operator’s relevant sites (Availability of this information may be restricted to only

interested parties to avoid concerns on public security);

6. Collocation options at the sites indicated under point B5 (including physical collocation and, as appropriate,

distant collocation and virtual collocation);

7. Equipment characteristics: restrictions, if any, on equipment that can be collocated;

8. Security issues: measures put in place by notified operators to ensure the security of their locations;

9. Access conditions for staff of competitive operators;

10. Safety standards;

11. Rules for the allocation of space where collocation space is limited;

12. Conditions for beneficiaries to inspect the locations at which physical collocation is available, or sites where

collocation has been refused on grounds of lack of capacity.

C. Information systems

13. Conditions for access to notified operator’s operational support systems, information systems or databases for

pre-ordering, provisioning, ordering, maintenance and repair requests and billing.

D. Supply conditions

14. Lead time for responding to requests for supply of services and facilities; service level agreements,

fault

resolution, escalation procedures and quality of service parameters;

15. Standard contract terms, including, where appropriate, compensation provided for failure to meet lead times;

16. Prices or pricing formulae for each feature, function and facility listed above.