USA raises trade concerns about EU telecoms sector
The US government has announced that it intends to 'monitor closely' six EU Member States due to concerns about fair competition regarding mobile wireless interconnection rates and the provisioning and pricing of leased telecom lines. Belgium, France, Germany, Italy, Spain and the UK have been singled out by the USA and may face retaliatory action, claims a report published on 3 April. 'Competitive telecommunications markets are catalysts for growth, investment and innovation in all economies,' said US Trade representative Robert Zoellick. 'We urge our trading partners to ensure that telecom operators do not undermine trade commitments and to use vigorously domestic remedies to address the competitive concerns that domestic and foreign operators raise.' The report claims that US companies face difficulties in obtaining leased lines from former monopolies, with Germany providing the most severe provisioning problems. Germany has, however, proposed penalising delays in the future. Pricing for leased lines in Belgium, France, Ireland and Spain is 'excessive' according to the report. The USA is therefore urging the Commission and national regulators in the EU to identify benchmarks for leased line prices in order to ensure that rates are reasonable. The report also claims that EU mobile wireless operators charge wireline carriers wholesale rates that are significantly above cost price, raising the amount that US operators and consumers have to pay. Some countries, including France and the UK are however analysing mobile wireless network costs in order to determine what competitive rates would be. The report comes as the EU prepares action against certain incumbents in the telecommunications sector who have made insufficient progress in the unbundling of the local loop (the last mile of the telecommunications network). The European Commission is also preparing a document to look at where regulation is needed in the telecommunications sector and Member States are also required to enforce the new telecommunications package approved in February by May 2003.