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Wednesday, 28 November, 2001, 17:11 GMT
Europe to punish broadband laggards
Fibre-optic cables
The wiring in Europe still needs freeing up
The European Commission is to decide by 20 December what infringement procedures it will impose on member states slow to open up their local calls market.

In its seventh annual review of the European telecoms market, the Commission said 10 countries out of 15 were sluggish in stopping incumbent operators from dominating the market.

Their regulators are lax in preventing overcharging and slow delivery of broadband services, hindering competition, it said.

"The Commission believes that progress is not satisfactory, and should be speeded up on the basis of hands-on monitoring [by regulators], binding deadlines and credible penalties," the report said.

"The wide range of prices across the Community and remarkably different lead times for supply cannot be justified in terms of differing costs or conditions."

No names

Launching the report today, Erkki Liikanen, the commissioner responsible for telecoms, refused to name the 10 countries involved.

European Commissioner Erkki Liikanen
Liikanen: keeping his counsel on broadband
"We will take a decision on 20 December," he said. "Let's see how much happens before then."

But sector watchers would not be surprised to find the UK near the top of the list.

The EU rules on opening up the local loop, the connection between the exchange and the end user, came into force in January this year.

Traditionally, the huge ex-monopoly telecoms companies, such as the UK's BT or Germany's Deutsche Telekom, have kept control of it, since it represents the gateway for any other telecoms services.

Slow road to broadband

The Commission's concern is not just that local call competition is difficult without "unbundling", as it is known, of the local loop.

Even more importantly, the rollout of broadband services such as ADSL, which can make internet connections up to 100 times faster than regular dial-up services, tends to be slow without unbundling.

"It is very crucial element in the roll out of broadband services, in the form of ADSL," Credit Lyonnais Securities' Dan Bieler told the BBC's World Business Report.

"If the incumbent drags it feet and it really does not open to this possibility, then the whole population and business included can really suffer from the slow roll out of the broadband offer," he added.

More work still needs to be done on the price of mobile services too, the Commission said.

The wide range of prices charged by operators for calls between networks and from landlines to mobiles "cannot be justified in terms of the actual costs, nor in terms of their level in relation to average fixed to fixed tariffs", it said.

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Credit Lyonnais's Dan Bieler
"It is a very crucial element in the roll out of broadband services"
See also:

18 Oct 01 | Business
Watchdog caps BT charges
23 Aug 01 | Business
Broadband fines threat to BT
02 Aug 01 | Business
BT bidders in talks with watchdogs
12 Jul 01 | Business
EU raids may bring cheaper roaming
27 Jun 01 | Business
Oftel orders BT to cut prices
20 Mar 01 | Business
EU 'to tackle 3G debt'
22 Sep 00 | Business
Oftel hits back as criticism mounts
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