EU network access fine sends message to telcos

The European Commission warns telcos that they must allow network access to downstream broadband providers

The European Commission has sent a clear message to telecom operators that they must allow access to their networks and wholesale broadband markets to new operators by fining Telekomunikacja Polska more than €127 million (US$182 million).

Under European Union rules, dominant telcos are required to allow new operators access to their networks. The aim is to increase broadband connectivity and to give consumers a better choice. Building a network from scratch is rarely economically viable, hence the E.U.'s law on access.

"The Commission cannot allow the development of the Internet and of the digital economy to be put at risk by anti-competitive practices. This case shows our determination to ensure that dominant telecom operators do not systematically hinder competitors who can make a real difference in the market to the benefit of consumers and businesses," said Competition Commissioner Joaquín Almunia.

In Poland, the network is exclusively provided by Telekomunikacja Polska (TP), but the Commission found that it deliberately sought to limit competition in the broadband market by placing obstacles in the way of alternative operators.

From August 2005 until at least October 2009, TP proposed unreasonable conditions, delayed the negotiation processes, rejected orders in an unjustifiable manner and refused to provide reliable and accurate information to alternative operators, said the Commission.

Poland has one of the lowest broadband penetration rates in Europe -- in January 2010 it reached only 13 percent, significantly below the E.U. average of 24 percent. Consumers also suffer lower connection speeds with 66 percent of Internet access lines below 2M bps (bits per second).

Telekomunikacja Polska's total revenue in 2010 was €3.9 billion and the fine takes account of the duration and gravity of the infringement. But matters may not end there as individuals or businesses affected by the anticompetitive behavior can also appeal to local courts for damages.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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