"local loop" means the physical circuit connecting the network termination point at the subscriber's premises to the main distribution frame or equivalent facility in the fixed public telephone network.

all relevant detail regarding local network architecture, information concerning the locations of physical access sites, availability of copper pairs in specific parts of the access network;

This results from the fact that operators rolled out their old copper local access networks over significant periods of time protected by exclusive rights and were able to fund its investment costs through monopoly rents.

The "local loop" refers to the physical copper line circuit in the local access network connecting the customer's premises to the operator's local switch, concentrator or equivalent facility.

For as long as the level of competition in the local access network is insufficient to prevent excessive pricing of unbundled access to local loops, it is recommended that prices for unbundled access to local loops follow the principle of cost orientation.

This applies in particular to the roll-out of new service in the local access network, access to unbundled local loops, availability of collocation space, provision of leased transmission capacity for access to collocation sites, ordering, provisioning, quality and maintenance procedures.

With regard to technologies and services used with unbundled local loops, it is recommended that national regulatory authorities ensure that any restrictions designed to protect network integrity, and in the case of shared access to the local loop to protect the voice telephony channel, are non-discriminatory and based on objective criteria identified in advance, in accordance with Article 13(2)(b) of Directive 98/10/EC.

As noted in the Commission fifth report on the implementation of the telecommunications regulatory package fn, the local access network remains one of the least competitive segments of the liberalised telecommunications market, because new entrants do not have wide-spread alternative network infrastructures and are unable with traditional technologies to match the economies of scale and scope of operators notified as having significant market power in the fixed network (hereinafter referred to as "notified operators").

The conclusions of the special European Council of Lisbon on 23 and 24 March 2000 note that for Europe to fully seize the growth and job potential of the digital, knowledge-based economy, it is required that businesses and citizens have access to an inexpensive, world-class communications infrastructure and a wide range of services, and to provide this calls on the Member States, together with the Commission, "to work towards introducing greater competition in local access networks before the end of 2000 and unbundling the local loop, in order to help bring about a substantial reduction in the costs of using the Internet".

In the context of the promotion of an advanced, harmonised and competitive electronic communications market that provides a wide choice for users for a full range of communications services, including broadband multimedia and high-speed Internet services, this recommendation concerns conditions for the provision to new entrants of unbundled access to the local loop and associated facilities, by public fixed network operators designated by the national regulatory authority as having significant market power (hereinafter referred to as "notified operators") in accordance with Directive 97/33/EC, Directive 92/44/EEC, and, Directive 98/10/EC.

The local loop remains connected to, and part of, the public switched telephone network.

Wireless local loops, power line networks etc, in addition to cable TV networks.

The local loop remains connected to, and part of, the notified switched network.

The incumbents' local loop networks have been developed nationwide in each of the Member States.

access to the fixed public telephone network, including unbundled access to the local loop

Information concerning the locations of physical access sites(1), availability of local loops in specific parts of the access network;

In the longer term, technological developments may lead to other local loop access mechanisms being viable, such as energy networks:

To overcome the limited current competition in the local access network referred to above, three means of access to the local loop are considered:

In order to provide particular services to consumers, access to the local loop of either the TO or the cable television operator is necessary.

As noted in the Commission's Fifth Report on the implementation of the telecommunications regulatory package, the local access network remains one of the least competitive segments of the liberalised telecommunications market.

The "local loop" is the physical twisted metallic pair circuit in the fixed public telephone network connecting the network termination point at the subscriber's premises to the main distribution frame or equivalent facility.

"local loop" means the physical twisted metallic pair circuit connecting the network termination point at the subscriber's premises to the main distribution frame or equivalent facility in the fixed public telephone network;

"local sub-loop" means a partial local loop connecting the network termination point at the subscriber's premises to a concentration point or a specified intermediate access point in the fixed public telephone network;

The recommendation proposes publication of a reference offer for unbundled access to the local loop, covering network elements to which access is offered, collocation services, operational support systems, supply conditions and prices.

Traditionally it takes the form of pairs of copper wires (one pair per normal telephone line), but increasingly fibre-optic cables are being deployed to connect large customers, and other technologies are also being rolled out in the local access network(4).

The Member States, together with the Commission, are called upon to work towards introducing greater competition in local access networks before the end of 2000 and unbundling the local loop, in order to help bring about a substantial reduction in the costs of using the Internet.

This results from the fact that operators rolled out their local access networks over significant periods of time protected by exclusive rights and were able to fund its investment costs through monopoly rents.

The incumbents' local access network (i.e. the copper pairs connecting end-users to the closest distribution frames) is not the only technical infrastructure allowing for the provision of retail services to end-users.

pricing of local loops should be compatible with the aim of fostering fair and sustainable competition, and providing efficient investment incentives in alternative local access network infrastructure(18),

It identifies actions that Member States are invited to take to address limited competition in the local access network where the incumbent continues to dominate both the provision of voice telephony and the development of higher bandwidth services.

For the incumbent, provision of a high-speed bit-stream service is attractive in that it does not involve physical access to copper pairs, and so does not hinder the progressive modernisation of the local access network (i.e. replacing copper by fibre).

The bottleneck situation experienced so far for the provision of access and local calls services and now for the provision of high-speed services does not prevent new entrants from developing local networks, at a more limited level, such as in densely populated urban areas, but with these networks they are normally unable to compete nationwide on an equal footing with incumbents, providing the same whole range of services (see below).

For a new entrant, the problem in exploiting access to unbundled copper pairs is that it entails building out its core network to the incumbent's local exchanges where the copper pairs are terminated; in a typical European country this could number several thousand sites.

When a notified operator provides a high-speed bit-stream service, it typically conveys customer traffic to one or more points where service providers can interconnect, so that the service providers do not have to build out their network to all local exchanges equivalent facilities.

Where an operator notified as having significant market power under the Voice Telephony Directive provides shared access to the local loop for its own services, it is granting itself special network access, in that it is making use of the fixed public telephone network for providing publicly available telecommunications services.

Providing access to the local loop to all new entrants will increase the level of competition and technological innovation in the local access network, which will in turn stimulate the competitive provision of a full range of telecommunication services from simple voice telephony to broadband services to the customer.

A refusal from an incumbent to give access to competitors on its local loop is thus likely to eliminate the possibility for new entrants to compete at all on the nationwide market(10) for the three identified services, and they would be limited to regional and local markets where they succeed in building alternative networks.

This Regulation mandates unbundled access to the metallic local loops only of notified operators that have been designated by their national regulatory authorities as having significant market power in the fixed public telephone network supply market under the relevant Community provisions (hereinafter referred to as "notified operators").

At the same time, given the cost of investment in local access network infrastructure and/or dependence of the service offerings of the incumbent, competition in provision of full voice telephony services (including the connection, monthly rental and local calls markets) is concentrated on business customers in urban areas.

High-speed bit-stream access refers to the situation where the incumbent installs a high-speed access link to the customers premises (e.g. by installing its preferred ADSL equipment and configuration in its local access network) and then makes this access link available to third parties, to enable them to provide high-speed services to customers.

Providing access to the local loop to all new entrants will increase the level of competition and technological innovation in the local access network, which will in turn stimulate the competitive provision of a full range of telecommunication services from simple voice telephony to broadband multimedia and high-speed Internet services to the customer.

High-speed bit-stream access refers to the situation where the incumbent installs a high speed access link to the customers premises (e.g. by installing its preferred ADSL equipment and configuration in its local access network) and then makes this access link available to third parties, to enable them to provide high-speed services to customers.