Final dash to meet telecoms deadlines

Date: 03/07/1997

By Chris Johnstone

A LATE flurry of activity this week showed governments and telecoms companies moving slowly towards the 1998 opening of the EU's multi-million ecu telecommunications market as the deadlines passed for three key liberalisation measures to be notified.

Telecoms firms were given until this week to inform the European Commission of what prices they will charge rivals to hook up to their networks (so-called interconnection), with governments required to declare what they had done to provide enough numbers for telecommunication services and detail how new operators will be licensed in the coming era of full competition.

Although most companies and countries have supplied the necessary information on time, competition officials expect they will have to hold a series of meetings this month and in September to push the stragglers along and check on the details. But they admit that failures to meet deadlines or complaints about unsatisfactory answers are more likely to be resolved at national level by local telecoms regulators, especially on the thorny issue of interconnection.

Some dominant telecoms companies acted just ahead of the 1 July deadline to spell out the charges which will face rival firms wanting to use their networks to begin or end calls. Publication of interconnection charges is crucial in enabling rival companies to draw up their business plans to challenge dominant firms on their home territory once across-the-board competition in telecommunications services kicks off in the EU in January.

Newcomers will almost always be obliged to use rivals networks on the 'local loop' - the connection between home or office and a main telephone cable - because the expense of laying their own alternative networks would be prohibitive.

Dominant Belgian phone company Belgacom published its interconnection tariffs just days ahead of the deadline. Belgacom general director for interconnection Patrice d'Oultremont presented the charges as being within “a European average”, adding that UK operator BT's lower tariffs were a consequence of its longer exposure to competition and that France Telecom's rates did not include its levy to meet universal service obligations. D'Oultremont added that the final charges were only a basis for negotiation.

But Belgacom's information left rivals disappointed, with BT Belgium saying that the three-page fax giving the bare bones of its interconnection proposals was not enough to prepare a strategy.

“BT produced a book weighing five kilos which gave details of its interconnection regime,” said a spokesman.

The Dutch government has also moved to curb the excessive charges of its dominant operator KPN following a complaint by rival Telfort, the joint venture between the Dutch railway and BT's Dutch subsidiary. KPN was ordered to devise a new accounting system and will, in the meantime, be forced to cut some of its interconnection fees by 10&percent;.

Further reductions will have to follow if the final assessment of charges shows they are too high and KPN will also be penalised with a further cut in interconnection tariffs if it fails to deliver the assessment on time. Telfort has complained that the initial reductions are unbalanced since they lower the price paid for the last leg of a call to its final destination, but do not cut costs for carrier selection, when a caller wants to use KPN's network at the start of a call to link it to rivals' networks.

“The measures of the ministry lead to a situation where Telfort is still unable to offer a competitive choice to consumers and small and medium-sized business,” said the firm, adding that it was still in the dark over the final regime for interconnection charges.

Although Germany's Deutsche Telekom has long since published its interconnection charges, it still faces an investigation by Commission competition officials into its interconnection regime following complaints by its rivals.

The complaints focus on DT's alleged use of discounted charges to hold on to its business customers.

Meanwhile, Italy's dominant operator STET promised that its interconnection charges would be ready by the deadline, but added that the government was expected to be late meeting its obligations on licensing and numbers.

Companies in Denmark, Spain, France, Finland, Sweden, and the UK have already published their interconnection regimes, but Ireland, Portugal, Greece, and Luxembourg have been given extra time under Commission derogations to meet the interconnection and other July deadlines.

A report by the Commission before the deadlines passed showed that Italy, Spain, Austria, and Belgium had yet to provide the required information on numbering and licensing. The Netherlands has a unique system where no licences are needed to start services.