10 Implementation of the Telecommunications
Regulatory Package
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15227/02
COM(02) 695 ADD 1-4
| Commission's Eighth Report on the Implementation of the Telecommunications Regulatory Package — European telecoms regulation and markets 2002.
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| Legal base | — |
| Department | Trade and Industry
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| Basis of consideration | Minister's letter of 21 July 2003
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| Previous Committee Report | HC 63-xiv (2002-03), paragraph 2 (5 March 2003)
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| To be discussed in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
10.1 On 5 March 2003, we asked several questions in our Report
on the Commission's Eighth Report on the Implementation of the
Telecommunications Regulatory Package, as follows:
"Commenting on the reports findings on the provision of leased
lines in the UK and the performance of the National Regulatory
Authority, the Minister says that Oftel has carried out investigations
into anti-competitive behaviour in the rollout out of ADSL[14]
and taken action where appropriate. We ask the Minister to elaborate
on this comment. What anti-competitive behaviour was alleged,
what was the alleged effect of the behaviour and what action did
Oftel take?
"We also ask the Minister whether the actions,
or lack of action, to open their markets by other Member States
[has] been the subject of complaints by British operators and
what action the Government is taking in these cases."
The Minister's replies
10.2 In a letter dated 21 July (not forwarded until
23 October), the Minister for Energy, e-Commerce and Postal Services,
Department of Trade and Industry (Mr Stephen Timms) replies:
"I will deal first with the question about investigations
and actions undertaken by Oftel in connection with the roll-out
of ADSL. In one case, Oftel received complaints from some operators
that BT's refusal to allow them to interconnect with its core
broadband network at the ATM[15]
layer was preventing them from offering innovative wholesale and
retail products to their customers. After investigating the complaints,
Oftel required BT to provide the relevant interconnection service.
Oftel is currently investigating allegations that in pricing
its interconnection product BT is margin-squeezing in relation
to its wholesale products.
"In addition, there have been allegations by
various service providers that BT was behaving anti-competitively
in the supply of ADSL services by giving advance notice of price
cuts to its own service provider business. Oftel's investigations
so far have concluded that these allegations are unfounded, but
it continues to monitor developments very closely and will take
action where appropriate. No action has been required.
"The Committee also asked whether lack of action
to open their markets by other Member States has been the subject
of complaints by British operators. During the period covered
by the report British operators have complained to the National
Regulatory Authorities (NRAs) in a number of Member States. The
main causes for complaint are:
- Discrimination by incumbent
operators on price and non-price aspects of services offered to
their own downstream subsidiaries and competitors (Ireland and
Germany);
- The need for actions to secure needed wholesale
inputs such as partial private circuits and wholesale DSL[16]
or bitstream[17] (Netherlands,
Germany and other Member States);
- The need for proper, visible application of accounting
separation rules.
"Some specific examples of complaints are:
Spain
"In February 2002, the Spanish NRA, CMT, ruled
against the incumbent operator, Telefonica, for failing to abide
by the terms of an early judgement in favour of a British company
concerning a conflict over interconnection. Also, in February
2002, CMT ruled against Telefonica for failing to abide by a ruling
permitting pre-selection of operators by telecoms customers in
a case which was brought by ASTEL, a trade association which includes
UK operators. In July 2002, Telefonica was sanctioned for failing
to abide by a ruling governing public call boxes. The case was
brought by a number of operators, including a British company.
"There have also been competition cases. During
2002, the CMT ruled against Telefonica on a number of occasions
for a variety of practices deemed anti-competitive. In some of
these cases the complaints were made by individual operators;
in others by a trade association (ASTEL) representing the interests
of all the non-incumbent operators, including some British companies.
Ireland
"In June 2002, the NRA ruled that Eircom, the
incumbent operator, should supply FRIACO[18]
to a British company, and a further decision forced Eircom to
provide unbundled backhaul and reduced connection charges.
Germany
"A successful challenge was made to the NRA
in respect of the length of Deutsche Telekom's (DT) delivery times
for leased lines, but DT have appealed and the decision was suspended
pending the appeal hearing. The NRA also ruled against DT for
abusing the designation of Closed User Groups, which DT had been
using to offer special tariffs to disparate customers lacking
the same commercial purpose. In addition, the European Commission
has recently fined DT 12.6 million for abusing its dominant position
through unfair prices for the provision of local access to its
fixed telecoms network.
The Netherlands
"In response to a complaint by a British company,
the NRA ordered KPN, the incumbent operator, to offer wholesale
DSL.
"The evidence suggests that the current regulatory
framework is in general providing an effective mechanism for the
resolution of complaints by British companies operating in other
Member States. From 25 July, the date on which the new competition-based
framework is due for transposition, the UK will be working with
the European Commission to promote coherent implementation and
operation of the new regime, which should offer easier market
entry and provide faster and more reliable mechanisms for resolving
complaints and disputes.
Conclusion
10.3 We thank the Minister for this reply, which
we understand was not drafted until July, as British companies
needed to be consulted. The letter was then not forwarded until
late October, due to a clerical error.
10.4 We now clear the document.
14 ADSL provides advanced high-speed internet access. Back
15
ATM (Asynchronous Transfer Mode) is the internationally agreed
basis for broadband ISDN, a technology that enables all types
of information (data, voice and video in any combination) to be
transported by a single network infrastructure. Back
16
DSL provides high-speed Internet access over copper subscriber
lines. Back
17
High-speed DSL technology. Back
18
FRIACO is time-unlimited internet access. Back
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