2005/57/EC: Commission Recommendation of 21 January 2005 on the provision of leased lines in the European Union (Part 1 — Major supply conditions for wholesale leased lines) (notified under document number C(2005) 103)
Date: 2005-01-21
Institutions: European Commission
Subjects: competition policy, contract terms, liberalisation of the market, market supervision, telecommunications industry, transmission network

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Official Journal of the European Union

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COMMISSION RECOMMENDATION

of 21 January 2005
on the provision of leased lines in the European Union (Part 1 — Major supply conditions for
wholesale leased lines)

(notified under document number C(2005) 103)

(2005/57/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(4)

the European
Having regard to Directive 2002/21/EC of
Parliament and of
the Council of 7 March 2002 on a
common regulatory framework for electronic communications
networks
and in
particular Article 19(1) thereof,

(Framework Directive) (1),

and services

Whereas:

rights

relating to electronic

However, the obligations will remain in place according
to Article 27 of the Framework Directive and Article 16
of Directive 2002/22/EC of the European Parliament and
of the Council of 7 March 2002 on universal service and
users’
communications
networks and services (Universal Service Directive) (4).
In accordance with Article 16(1) of
the Universal
Service Directive and Article 7 of Directive 2002/19/EC
of
the Council of
7 March 2002 on access to, and interconnection of,
electronic
and associated
facilities (Access Directive) (5), the former obligations are
maintained until such time as the relevant markets have
been reviewed in accordance with Article 16 of
the
Framework Directive and Article 16(3) of the Universal
Service Directive.

the European Parliament and of

communications networks

(1)

(2)

(3)

the

require

in the Community

Users
competitive
provision of leased lines, and access to high-speed trans-
mission data services so that in particular Europe’s small
from the
and medium-sized enterprises can benefit
opportunities offered by the rapid development of the
Internet and electronic commerce.

Competitive provision of
leased lines has begun to
emerge since liberalisation of telecommunications infra-
structure on 1 January 1996, but has been largely
confined to long distance high capacity routes;
leased
line markets will be reviewed as explained below.

Certain organisations operating leased lines services had
the obligation to provide these services under the prin-
ciples of non-discrimination in accordance with Directive
97/33/EC of the European Parliament and of the Council
of 30 June 1997 on interconnection in Telecommuni-
cations with regard to ensuring universal service and
interoperability through application of the principles of
Open Network Provision (ONP) (2) and Council Directive
92/44/EEC of 5 June 1992 on the application of Open
Network Provision to leased lines (3);
these Directives
were repealed by Article 26 of the Framework Directive
with effect on 24 July 2003.

(1) OJ L 108, 24.4.2002, p. 33.
(2) OJ L 199, 26.7.1997, p. 32. Directive as last amended by Directive

98/61/EC (OJ L 268, 3.10.1998, p. 37).

(3) OJ L 165, 19.6.1992, p. 27. Directive as

last amended by

Commission Decision 98/80/EC (OJ L 14, 20.1.1998), p. 27).

(5)

(6)

that a relevant market

In accordance with Article 16(4) of
the Framework
Directive, where a national regulatory authority (NRA)
determines
is not effectively
competitive, it shall identify undertakings with significant
market power and shall on such undertakings impose
appropriate specific regulatory obligations or maintain
or amend such obligations where they already exist. In
accordance with Article 18(1) of the Universal Service
Directive, where an NRA determines that
the market
for the minimum set of leased lines is not effectively
competitive, it shall identify undertakings with significant
market power and impose obligations regarding the
provision of the minimum set and the conditions for
such provision. In accordance with Article 5(1) of the
Access Directive, NRAs
shall encourage and where
appropriate ensure adequate access and interconnection
and shall be able to impose obligations to that effect.

On 11 February 2003 the Commission adopted Recom-
mendation 2003/311/EC (6) on relevant product and
service markets, defining the relevant markets within
the electronic communications sector that NRAs should
analyse. The list includes wholesale terminating segments
of leased lines and wholesale trunk segments of leased
lines. The supply of the services addressed in this recom-
mendation, namely the supply of wholesale leased lines
and leased line part circuits, is included in these markets.

(4) OJ L 108, 24.4.2002, p. 51.
(5) OJ L 108, 24.4.2002, p. 7.
(6) OJ L 114, 8.5.2003, p. 45.

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(7)

(8)

(9)

The supply of wholesale leased lines and leased line part
circuits is included in the market of wholesale termi-
nating segments of leased lines and for sufficient line
lengths
trunk
segments of leased lines referred to in Recommendation
2003/311/EC; the NRA will decide what constitutes a
terminating
network
topology specific to their national market.

also in the market

for wholesale

depending

segment

the

on

is

structured leased lines

The supply of 64 kbit/s, 2 Mbit/s unstructured and
2 Mbit/s
included in the
minimum set of leased lines services referred to in the
Recommendation on relevant markets. The minimum set
of
is defined in Commission Decision
2003/548/EC of 24 July 2003 on the minimum set of
leased lines with harmonised characteristics and asso-
the
ciated standards
Universal Service Directive (1).

referred to in Article 18 of

leased lines

leased lines and leased line part circuits in particular
provided by operators with an obligation for non-discri-
mination do not prevent other operators competing in
leased lines retail markets from providing similar delivery
time figures to their customers. Contractual delivery
times for wholesale leased lines should therefore at
least permit competing operators in retail markets to
meet best current practice delivery times of designated
operators providing leased lines in these retail markets.
Retail delivery times longer than best current practice
delivery times could result
in obstacles to the deve-
lopment of the internal market for electronic communi-
cation networks and services; in accordance with Article
8(3)(a) of the Framework Directive, it is an objective for
NRAs to remove such obstacles. Best current practice
delivery times of designated operators in retail markets
include
retail delivery processes of designated
operators; thus corresponding wholesale delivery times
would be shorter.

the

Information provided by Member States reveals problems
with the length and the variation of delivery times for
retail and wholesale leased lines and leased line part
circuits. This is without prejudice to the review by
NRAs of relevant markets in accordance with Article
16 of the Framework Directive and Article 16(3) of the
Universal Service Directive.

(13) According to Article 18 of and Annex VII

to the
Universal Service Directive, NRAs are to ensure that the
typical delivery period for the minimum set of leased
lines provided by identified undertakings is published;
in order to review this Recommendation the Commission
may need to have also available data on leased lines not
covered by the minimum set.

(10) Where,

in accordance with Article 10 of

the Access
Directive and Article 18 of and Annex VII
to the
Universal Service Directive, NRAs impose obligations of
non-discrimination for the provision of certain leased
line services, the principle of non-discrimination applies
to all relevant aspects of the services provided such as
time,
ordering, migration,
delivery,
reporting and penalties;
is
most appropriate to cover these aspects by a service
instead of penalties, compensation for
level agreement;
failure
could be
to meet
included into the agreement where this would be more
appropriate with regard to the legal context in a Member
State.

in leased line contracts it

requirements

contractual

quality,

repair

(14)

The Commission will review this Recommendation no
later than 31 December 2005 in order to take account
of changing technologies and of markets.

(15)

The Communications Committee has delivered its
opinion in accordance with Article 22(2) of
the
Framework Directive,

HEREBY RECOMMENDS:

(11)

contractual delivery times

In particular,
should be
included in the service level agreement so as to ensure
that delivery times for wholesale leased lines by such
operators are the same as those provided for their own
sufficiently below delivery times
and thus
services
observed on retail markets.

1. When imposing or maintaining an obligation for non-
discrimination under Article 10 of
the Access Directive or
Article 18 of and Annex VII
to Directive 2002/22/EC (the
Universal Service Directive) with regard to operators providing
referred to as designated
leased line services
operators), national regulatory authorities should:

(hereinafter

(12)

The publication of best current practice figures for overall
delivery times of leased lines will help NRAs to ensure
that contractual delivery times applied to wholesale

(1) OJ L 186, 25.7.2003, p. 43.

(a) ensure that contracts include enforceable agreements (here-
inafter referred to as service level agreements) which cover
all relevant aspects of
the wholesale leased line services
provided such as ordering, migration, delivery, quality,
repair time, reporting and dissuasive financial penalties;

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(b) ensure that

the contractual delivery times for wholesale
leased lines in these service level agreements are as short
as possible for each category of lines. Contractual delivery
times at the wholesale level should be in any case shorter
than best current practice delivery times of designated
operators in retail markets. Best current practice delivery
times of designated operators in the retail markets for 64
kbit/s, 2 Mbit/s unstructured, 2 Mbit/s structured and 34
Mbit/s unstructured are given in the Annex.

The methodology used to calculate the best current practice
figures given in the Annex is considered to be appropriate
to cover recognised differences of network structures and
delivery procedures between different designated operators
in different Member States;

shall provide also that the amount shall not be due where
and insofar as the designated operator provides proof that
the reason for the delay does not lie on him;

(d) ensure that the information necessary to prepare any review
of this Recommendation is provided in accordance with
Article 5(1) of Directive 2002/21/EC (the Framework
Directive) and report this information to the Commission
in accordance with Article 5(2) of the Framework Directive.

2.

This Recommendation is addressed to the Member States.

Done at Brussels, 21 January 2005.

(c) ensure in particular that financial penalties included into the
contracts as referred to in paragraph (a) apply in cases of
delayed delivery of lines and consist of a specified amount
for each day of delay for each line ordered; the contract

For the Commission

Viviane REDING
Member of the Commission

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ANNEX

METHODOLOGY AND DATA FOR LEASED LINES IN MEMBER STATES

Methodology

The methodology for recommended ceilings for contractual delivery times is based on the third lowest value observed in
the Member States in order to accommodate justified differences in network structures and delivery procedures in the
different Member States. Based on this methodology and the data given below, the following best current practice delivery
time figures have been derived for leased lines provided by designated operators:

1. for 64 kbit/s leased lines: 18 calendar days

2. for 2 Mbit/s leased lines unstructured: 30 calendar days

3. for 2 Mbit/s leased lines structured: 33 calendar days

4. for 34 Mbit/s leased lines unstructured: 52 calendar days

Delivery time data for leased lines in Member States

The Commission has obtained data from Member States on delivery times for leased lines of operators notified by the
NRA as having significant market power according to Article 11(1)(a) of Directive 92/44/EEC in response to the
questionnaire for the Leased Lines Report 2002 (1). The data was received by September 2003. Delivery times
reported are defined as the periods, counted from the date when the user has made a firm request for a leased line,
in which 95 % of all leased lines of the same type have been put through to the customers (2) (3).

(1) 2001 Report available at:

http://europa.eu.int/information_society/topics/telecoms/implementation/leasedlines/doc/COCOM02-10%20final.pdf

(2) See Article 2(3) of Directive 97/51/EC of the European Parliament and of the Council (OJ L 295, 29.10.1997, p. 23).
(3) Luxembourg provided only half year figures for 2002. Here the figures for both half year periods are displayed. In relevant cases the
higher of the two half year figures has been taken into account as an upper bound for full year figures in order to derive best current
practice figures.
Data given for Austria: data concern retail and wholesale lines; statistics correspond to the Directive (95 % of delivery times), data
include also orders in locations where infrastructure has to be built; for 2 Mbit/s no distinction between structured and unstructured
lines; for 34 Mbit/s and 155 Mbit/s the sample is too small for reliable statistics; specific customer delay, customer-requested changes
on the target-delivery date (no ‘best effort deliveries’) and on project orders are excluded; delivery times are calculated from time of
acceptance of a signed contract, if no other date (see customers’ delays) is agreed.

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64 kbit/s Leased Lines

2 Mbit/s Unstructured Leased Lines

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2 Mbit/s Structured Leased Lines

34 Mbit/s Unstructured Leased Lines