EU in final moves to complete liberalisation of telecommunications

The European Commission yesterday launched a final heave to complete the process of telecommunications liberalisation with an announcement that it wishes to see the unbundling of the so-called local loop by the end of the year.

The unbundling will allow prospective telecom operators full access, at cost price, to the physical infrastructure of established operators like Eircom, most specifically the "last mile" between the home and exchange. This is seen as crucial to reducing the cost of Internet access.

The announcement was welcomed by the Minister for Public Enterprise, Ms O'Rourke, who said it would be "a key element in driving competition and reducing prices for consumers".

A proposal for a regulation will go to ministers and the European Parliament and then, unlike a directive which has to be transposed, take effect directly in the member states.

The Commissioner for the Information Society, Mr Erkki Liikanen, said yesterday the measure was a central priority of the Lisbon summit in enhancing European competitiveness in e-commerce.

The Commission's proposals coincide with the expressed intentions of Ms O'Rourke, who announced a fortnight ago that she would be putting legislation to the Dail in the autumn to allow full shared access to the copper loop rather than the partial "bitstream access" which had previously been proposed. But the Commission's timeframe will cause Ireland problems - Ms O'Rourke had promised only to unbundle the loop by April of next year and working groups established by the Office of the Director of Telecommunications Regulation (ODTR) are working to that deadline.

An ODTR spokeswoman said the timeframe was "difficult, but we will try", while a Government spokeswoman described it as "challenging".

Diplomatic sources suggest Ireland will probably back the Commission's proposals but "despite best efforts, overshoot the deadline by a little". Derogations are frowned on.

A spokesman for Eircom, Mr Gerry O'Sullivan, acknowledged the fact that "unbundling is part of the reality of the regulatory environment", but expressed concern that the recoupment from new operators of the real, rather than marginal, costs of access would be crucial.

Failure to recoup the real historic costs of establishing the network would undermine the ability of companies like Eircom to invest and their competitiveness in the face of the global telecom giants. Eircom also questions why cable operators were not also required to unbundle.

The key elements of the new regulation involve a requirement on incumbent operators to provide new operators with full, shared access to their copper loops on fair and non-discriminatory grounds on a cost-only basis. Access must be offered on the same terms as that to the loop owner or its associated companies.

New operators must be allowed access to any technically feasible point on the copper loop for their equipment, and incumbents must publish a reference offer for unbundled access including prices, terms and conditions.

The Commission also announced a major consolidation and updating of telecommunications legislation to meet the needs of a rapidly changing marketplace.

The consolidation of legislation - from 28 legal measures to 8 - should be in place by 2002 and is supposed to give greater legal certainty as traditional communication technologies develop. Among the new measures proposed is one to forbid the sending of junk e-mail without the recipient's explicit consent.