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High-speed network connections Commission boosts competition in leased lines

The Commission also calls on national regulatory authorities to ensure that binding delivery times and penalties for not meeting them are included in wholesale leased line contracts offered by operators with significant market power to leased line retailers. Leased line delivery times vary substantially across the EU: for 2 Mbit/s lines, the delivery time in the slowest Member State is five times longer than in the fastest.

Information Society and Media Commissioner Reding said: “This recommendation will boost competition to supply leased lines to retail buyers and improve the quality of the wholesale leased line services. Greater competition will lead to more innovation and more choice for the customers which will make it easier for small businesses to access EU-wide markets”.

Leased lines offer dedicated transmission capacity (from 64kbit/s to 155 Mbit/s) of high quality. They are used by companies to link their distant offices or subsidiaries and the headquarters, e.g. for internal electronic communications and management purposes (email, telephony, fax, file sharing). Leased lines are also used by companies to connect to the Internet and for their e-business activities.

Leased lines are provided to companies by a telecom operator (incumbent or new telecom operator). New telecom operators need leased lines to complete their own network to provide their customers with value added services. Competition to supply end-to-end services is vital to deliver retail products at a reasonable price to European business users. Many new entrants to the retail leased line market complain that incumbents are much faster at providing leased lines to their own retail businesses than to their competitors. Today’s Commission recommendation therefore seeks to address problems with the length and the variation of delivery times for leased lines, which the Commission has been monitoring since 1996.

The recommendation applies only where national regulatory authorities place a duty of non-discrimination on operators with significant market power in the supply of wholesale leased lines. Contracts offered by such operators should provide comprehensive service level agreement contracts; delivery times that are shorter than their retail offers; and financial compensation in the event of late delivery, i.e. contract terms that an operator in a fully competitive market would have to provide in order to stay competitive.

A further recommendation on the pricing of leased lines is planned for spring 2005.

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