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By Suzanna Kerridge, 27 April 2000 00:30

NEWS The European Commission (EC) has given European telcos until 31 December to take steps to unbundle the local loop, opening up the last mile of telephone networks that connect exchanges to homes and businesses. Competition Commissioner Mario Monti and Technology and Information Society Commissioner Erkki Liikanen issued a formal recommendation calling on nine of the 15 member states to end local loop monopolies. The countries targeted by the EC include Belgium, Greece, Luxembourg, Portugal and Spain. Per Haujaard, spokesman for Erkki Liikanen, told Silicon.com: "Many things are happening in individual local countries to unbundle the local loop, but it is a very mixed picture and some are more advanced than others. "Unbundling will reduce access costs to the Internet and speed the roll out of new technology." The recommendations map out possible measures to open the local loop. One potential answer is for incumbents to offer shared access for basic telephone services while new entrants provide high-speed Internet access. Liikanen claimed this would be an easy route to unbundling as it is already covered under the Open Network Provision rules for network access. Haujaard claimed the Commission will not hesitate in taking anti-trust action if the recommendations are met with resistance. He said: "If a specific operator refused or granted exorbitant prices for access then our competition rules still apply." Alfredo Biocca, analyst at Meta Group, said: "It is important to unbundle to allow the right level of competition. Unbundling for the fixed line is just one step but not the only one - they still have to sort out wireless access." But Daniel Grundy, analyst at Datamonitor, said the end-of-year deadline is unrealistic. He called the threat of anti-trust action "bluster". "Unbundling will come in 18 months and it isn't worth shoving it though in six months when things aren't smoothed out - otherwise ultimately customers will lose out. The incumbents have been dragging their feet but some have gone as fast as they can."