EC Plans to Submit Local Loop Plan

BRUSSELS (07/11/2000) - The European Commission Wednesday will unveil its proposals for eight new pieces of legislation that represent a dramatic revision of the regulatory framework for telecommunications across the European Union, an EU official who asked not to be identified said Tuesday.

"The whole package sets out a comprehensive reform that will simplify procedures notably as regards licensing, clarify the roles of national regulators and ensure the provision of universal services," the official said.

The eight proposals will replace the existing framework of 25 EU directives adopted and revised at various times over the last 10 years.

The package of proposals is part of the European Union's efforts to become the most competitive economy in the world. For the Commission, the planned changes to the regulatory framework are designed to keep regulation to a minimum, but to guarantee fair competition for all players, whether incumbent former monopolies or new service providers.

Most of the package will take 18 months to win approval by the Council of Ministers representing the 15 member states of the European Union and another 12 months to be translated into national law. This is the normal time frame for the EU's decision-making process.

A key element in the package, however, is a draft regulation, which will require member states to require incumbent operators to unbundle the local loop as soon as the proposal is approved by the Council at the end of this year. The local loop refers to the last segment of a communications network that brings a voice, data or video transmission from the central switch to the individual home or office. Unbundling refers to the process by which companies -- typically former telecom monopolies -- offer to lease out parts of the local loop to competitors.

Regulations, unlike directives or decisions, which are the other types of EU laws, are directly applicable and do not require member states to first translate them into national law. In the telecom sector, they have never been used before.

The official said that the Commission has tacit understandings from both the Council of Ministers and European Parliament that both institutions will process the local loop regulation using a fast-track approach, so that adoption and implementation can take place by the end of the year.

"There is a clear sense of urgency and recognition that unbundling will provide the shot of adrenaline necessary to dramatically reduce prices and thereby accelerate the rollout of broadband technologies and services," he said.

Earlier this year, the Commission and Council of Ministers approved a Recommendation on unbundling that simply urges the member states to unbundle by the end of the year. The Regulation is designed to prevent any backsliding on this commitment.

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