Local loop unbundling - UKE

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Local loop unbundling

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President of the URTiP has imposed ex officio a reference offer on the local loop unbundling to be applied by Telekomunikacja Polska S.A. (Polish incumbent) as for  telecommunications and broadband services.

Decision of the President of URTiP was issued on 28 February 2005 and it defines framework for conditions for contracts regarding local loop unbundling (LLU) in terms of full and shared access. Decision was given an order of immediate enforceability due to its special significance for further liberalization of the telecommunications market in Poland.

Access to the local loop enhances development of the competition among operators in the area of access network (subscriber lines) by allowing them access to the already existing technical infrastructure of the operator with the significant market power.

The President of the URTiP said: „Local loop unbundling will lead to enhancement of the competition, lower prices and improvement of the quality of service. This aim has been achieved in the European markets where service providers, based on the incumbent’s existing network, entered the markets”.

In the full access to the local loop (i.e. access to a pair of cables brought to a subscriber’s  telephone socket) an alternative operator takes over telecom service provision (voice and broadband Internet access) for a hitherto TP S.A. subscriber without the necessity of setting up additional telephone lines.

In the shared access an alternative operator takes over only provision of the broadband Internet access while TP S.A. keeps the possibility to provide voice services on the hitherto conditions.

After the additional analyses are completed, a supplementary decision will be issued. The decision will extend the LLU offer to include the broadband access to the telecommunications network loops, so called bitstream access (meaning the access from the higher level of the operator’s network). Decision of the President of the URTiP of 28 February 2005 could not include the question of the bitstream access because the European Commission had set up the deadline for the acceptance of the LLU offer by the end of February 2005.

According to the Telecommunication Law, an SMP operator of the fixed telecommunications services is obliged to prepare an offer which defines framework conditions of the contracts for access to the local loop and related facilities. After such an offer is accepted by the regulatory office, an SMP operator is prohibited from signing contracts with alternative operators, containing worse conditions than the ones defined in the reference offer.

As the execution of its legal duty, TP S.A. submitted their own drafts of the LLU offers twice, i.e. on 27 April 2004 and 23 August 2004. The first project was withdrawn by TP S.A. one month after the submission in order to adapt its statements to the new ordinance of the Minister of Infrastructure of 29 April 2004 on detailed requirements regarding provision of the access to the local loop. However second project has been rejected by the President of URTiP because of its essential similarity to the first one. The project was not compliant with the requirements included in the ordinance mentioned above. Moreover it did not conform to the conditions of the Polish market nor the need to support effective competition.

In such situation, on 2 September 2004, the President of the URTiP decided to initiate works aiming at creation of the official draft of the LLU reference offer which would be obligatory for TP S.A. to be used. Also other telecommunications operators, gathered in the National Economic Chamber for Electronics and Telecommunications as well as the Polish Chamber for Informatics and Telecommunications, also participated in the administrative proceedings  acting as a party and with the possibility to submit their own proposals.

President of the URTiP decided that the LLU offer would cover all subscribers of TP S.A. regardless of their type of tariff plan. As a result TP S.A. subscribers using a social plan will be able to apply for unbundling their local loop and use services of an alternative operator.

As part of the LLU procedure, after the general information regarding possibility of the access to the specific local loop is provided by TP S.A., an alternative operator submits an application for signing a contract for the access. Within 90 days from submission of the application, both sides negotiate to sign the contract for the access and additional facilities (collocation, corresponding cable). After this stage is completed, the new operator should have the possibility to submit an order for the specific local loop to TP S.A. After the order is fulfilled, the new operator has a possibility to take over handling of the TP S.A. subscriber. Rejection of the local loop unbundling is possible solely due to the lack of technical capability on the side of TP S.A.

As the TP S.A. costs model has not been approved, the President of URTiP decided that the only possibility to define LLU tariffs is to base them on the tariffs of other European providers that operate in the competitive markets taking into account the level of development of the Polish market. President of URTiP has taken into consideration the fact that the costs of telecommunications equipment in Poland are similar to those in the other countries of the European Union.

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