EU drops action against Greece, Portugal on ‘local loop’ access

BRUSSELS (Reuters) – The European Commission announced yesterday it had dropped legal action against Portugal and Greece for their failure to open local telephone services fully to competition but was continuing proceedings against Germany. «We have received replies from the two member states other than Germany. They have replied and their legislation is now in order. We still have no reply from Germany,» European Commission spokesman Per Haugaard told a press briefing. Germany was swift to express surprise and said it had already sent a letter addressing the Commission’s concerns in terms of granting open access at local level. «We are very surprised about the EU statement. The deadline for the reply is Monday and the German letter should have arrived at the Commission’s table yesterday morning,» a spokesman for the German’s Economic Ministry said in Berlin. The Commission launched action in December against the three countries, saying they had been slow to ensure open access to the last few kilometers of telephone lines – the «local loop.» The EU executive said Portugal and Greece were now complying with a pan-EU law on the liberalization of the «local loop,» but was still awaiting a satisfactory response from Germany. Haugaard said that if no reply was received soon from Germany, the Commission would proceed with legal action. A spokesman for the German telecoms regulator RegTP said Deutsche Telekom, a former monopoly, had completed a line-sharing deal with German DSL operator QSC AG which is under review at the RegTP for pricing and contract clauses. A decision on pricing is expected in March. Industry sources say the Commission and Germany had a different understanding of what «open access» meant. «If Deutsche Telekom would post an offer for line-sharing on the billboard, Brussels would be happy,» a source said. «But the German law is based on individual contracts between the companies.» The Commission believes that open access to the last mile of telephone lines into European homes could foster competition and bring down costs for high-speed Internet. But progress in this area has been unsatisfactory. A study by the law firm Squire, Sanders and Dempsey published yesterday showed that new entrants seeking to rent copper lines from former state-owned operators are still facing high tariffs and the reluctance of telecom incumbents to open their premises to competitors.

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