Commission Recommendation of 29 March 2005 on the provision of leased lines in the European Union — Part 2 — pricing aspects of wholesale leased lines part circuits (notified under document number C(2005) 951)Text with EEA relevance
Date: 2005-03-29
Institutions: European Commission
Subjects: EC recommendation, European Commission, information system, systems interconnection, telecommunications, telephone charges, transmission network

L 83/52

EN

Official Journal of the European Union

1.4.2005

COMMISSION

COMMISSION RECOMMENDATION

of 29 March 2005
on the provision of leased lines in the European Union — Part 2 — pricing aspects of wholesale
leased lines part circuits

(notified under document number C(2005) 951)

(Text with EEA relevance)

(2005/268/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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 services (1)
(the framework Directive), and in
particular Article 19(1) thereof,

Whereas:

(1)

(2)

New entrants (or other authorised operators) often have
to rely on the incumbent to provide a short-distance
to link the customer’s premises to the
leased circuit
new entrant’s network (a leased line part circuit).

(4)

(Under 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 provision (ONP) (2) and
Council Directive 92/44/EEC of 5 June 1992 on the
application of Open Network Provision to leased
lines (3), that have now been repealed (4), certain organi-
sations operating leased lines services were obliged to
provide their leased line services (including leased lines
part circuits) under the principles of non-discrimination
and cost orientation.

(5)

(3)

the Framework
In accordance with Article 27 of
Directive and Article 16(1) of Directive 2002/22/EC of

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

98/61/EC, OJ L 268, 3.10.1998, p. 37).
(3) OJ L 165, 19.6.1992, p.27. Directive
98/80/EC, OJ

Commission Decision
p. 27).

as
L

last
14,

amended by
20.1.1998,

(4) These Directives were repealed by Article 26 of

the framework

Directive with effect on 24 July 2003.

communications networks
service Directive)

the European Parliament and of the Council of 7 March
2002 on universal service and user’s rights relating to
and services (5)
electronic
and Article 7 of
(the universal
Directive 2002/19/EC of the European Parliament and
of the Council of 7 March 2002 on access to, and inter-
connection of, electronic communications networks and
associated facilities (6) (the access Directive), the former
obligations are therefore 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.

that a relevant market

In accordance with Article 16(4) of
the framework
Directive, where a national regulatory authority (NRA)
is not effectively
determines
competitive, it shall identify undertakings with significant
market power and shall impose appropriate specific regu-
latory obligations on such undertakings, 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. Hereinafter undertakings with obligations
under any of the abovementioned directives are referred
to as ‘notified operators’.

the Commission adopted a
On 11 February 2003,
service
recommendation on relevant product
markets (7) defining the relevant markets within the elec-
tronic communications sector that NRAs must analyse
under the provisions of Article 15 of the framework
Directive. The
terminating
segments of leased lines and wholesale trunk segments
of leased lines.

includes wholesale

and

list

(5) OJ L 108, 24.4.2002, p. 51.
(6) OJ L 108, 24.4.2002, p. 7.
(7) C(2003) 497, OJ L 114, 8.5.2003, p. 45.

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Official Journal of the European Union

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(6)

The supply of leased lines part circuits is included in the
market of wholesale terminating segments of leased lines
and for sufficient line lengths also in the market for
wholesale trunk segments of leased lines referred to in
the Recommendation of the Commission of 11 February
2003.
the NRA to decide what
constitutes a terminating segment depending on the
network topology specific to their national market.

is a matter

for

It

assessments by NRAs

(7) Without prejudice to the market reviews and market
in accordance with
power
the framework Directive and
Articles 15 and 16 of
Article 16(3) of
infor-
mation provided by Member States reveals a persistent
pattern of worsening problems with the level of prices
for leased line part circuits given by notified operators
and confirms problems with the variation of such prices.

the universal service Directive,

(8) Where,

the universal

in accordance with Article 13 of

the Access
Directive or Article 18 of
service
Directive, a national regulatory authority imposes obli-
gations for cost orientation with regard to leased line
part circuits, it may take into account the fact that the
cost information received from the operator concerned
may not fully reflect the costs of an efficient operator
It may also take into
deploying modern technologies.
competitive
account prices
markets with regard
recovery
to mandated
mechanisms or pricing methodologies.

in comparable

available

cost

(9)

In these circumstances, the publication of recommended
price ceilings for leased line part circuits should inform
and guide NRAs as to how to apply the best current
practices in leased line provision, when devising regu-
latory remedies for leased line markets that are not effec-
tively competitive in their territory. In so doing, it would
contribute to the development of an internal market by
the
improving EU-wide consistency in application of
underpin
framework
regulatory
the
creation of
and cost-efficient
a more
market for leased lines.

and
competitive

thereby

(10)

The derivation of price ceilings in this recommendation
takes account of average prices in those Member States
that allow notified operators price flexibility in different
geographical areas.

(11) As provided in Article 13(3) of

the access Directive,
NRAs may require a SMP-designated undertaking to

provide full
appropriate, require prices to be adjusted.

justification for its prices, and may, where

(12)

The Commission shall consider the need to review this
recommendation no later than 31 July 2006 in order to
take account of changing technologies and of markets.

(13)

The Communications Committee has been consulted in
accordance with the procedure referred to in Article
22(2) of the framework Directive,

HEREBY RECOMMENDS:

1. For the purpose of

this recommendation,

the following

definitions shall apply:

(a) a ‘leased line part circuit’ (LLPC) means the dedicated
link between the customer premises and the point of
interconnection of the other authorised operator at (or
close to) the network node of the notified operator, and
should be regarded as a particular type of a wholesale
leased line which can be used by the other authorised
operator
to retail users, other
operators or for its own use such as, but not limited
to, leased lines, connections to the switched telephone
network, data services or broadband access;

to provide services

(b) ‘line length’ means the radial distance between the
from the

locations of the two ends of the line,
point of interconnection to the customer premises;

i.e.

(c)

‘customer’ means customer of
operator.

the other authorised

2. When imposing or maintaining an obligation for cost orien-
tation of prices under Article 13(1) of Directive 2002/19/EC
(the access Directive) with regard to operators providing
leased line part circuits, national
regulatory authorities
should:

the tariff

(a) ensure that the prices associated with the provision of a
the
leased line part circuit reflect only the costs of
underlying network elements and the services being
requested including a reasonable rate of
In
structure may include one-off
particular,
imple-
connection prices covering the justified initial
the service being requested (e.g.
mentation costs of
specific
testing and
line
equipment,
human resources), and monthly prices covering the
on-going cost for maintenance and use of equipment
and resources provided;

conditioning,

return.

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Official Journal of the European Union

1.4.2005

in
are

the Commission
respected unless

(b) ensure that any of the price ceilings listed in Annex I for
leased line part circuits based on the price data and
services
methodology
given
working document
is
reliable evidence from cost accounting analysis as
approved by the national regulatory authority that the
recommended ceiling would result in a price level below
the efficient costs of the underlying network elements
and the services being requested including a reasonable
rate of return.

there

(c) use their rights under Article 13 of the access Directive
to request full justification of the proposed charges, and
if appropriate, to require these charges to be adjusted.

3. This Recommendation is addressed to the Member States.

The methodology used to calculate recommended price
ceilings, as described in the associated Commission Staff
working document (1), is considered to be appropriate to
cover
recognised cost differences between different
operators in different Member States;

Done at Brussels, 29 March 2005.

For the Commission

Viviane REDING
Member of the Commission

(1) ‘Commission staff working document — Methodology, reference
configuration and data of leased lines in Member States related to
the Commission recommendation on the provision of leased lines in
the European Union — Part 2 — Pricing aspects of wholesale leased
line part circuits’ — http://europa.eu.int/information_society/topics/
ecomm/useful_information/library/commiss_serv_doc/index_en.htm

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Official Journal of the European Union

L 83/55

ANNEX

Ceiling for the
sum of the
monthly price and
1/24 of the one-
off connection
price for a circuit
length of up to
2 km

Ceiling for the
sum of the
monthly price and
1/24 of the one-
off connection
price for a circuit
length of up to
5 km

Ceiling for the
sum of the
monthly price and
1/24 of the one-
off connection
price for a circuit
length of up to
15 km

Ceiling for the
sum of the
monthly price and
1/24 of the one-
off connection
price for a circuit
length of up to
50 km

(EUR)

Ceiling for the
One-off
connection price

61

186

892

78

248

963

82

333

1 597

1 991

99

539

2 539

4 144

542

1 112

2 831

3 144

155 Mbit/s

1 206

1 332

Capacity

64 kbit/s

2 Mbit/s

34 Mbit/s