MCI Worldcom is desperate to get its hands on Europe's local copper telephone networks, but getting a nod of approval from the regulators isn't the only challenge for new operators.
At the Cebit show here Friday, MCI Worldcom distributed a white paper explaining why new operators should have access to local phone networks and urging regulators to accelerate moves to open up the local loop.
"In these circumstances there is a real danger that, without regulatory invention, the PTTs will be able to dominate the new broadband access market and will slow its development so that Europe lags behind the rest of the world," the white paper says.
Most of the phone lines running to homes and businesses in Europe are owned by the former monopoly telcos, BT in the UK. New operators, like MCI Worldcom, want access to these networks so they can offer their own local and end to end services.
"There is no established monopoly in data," said Richard Feasey, head of MCI Worldcom's international regulatory division. "If regulators don't take action, then existing PTTs will leverage their traditional power in voice into the data market."
Regulators across Europe are debating whether to unbundle their local loops and so far Germany is one of the only countries to emerge with a plan to do so.
MCI Worldcom says the demand for broadband services on the local loop, using digital subscriber line (DSL) technology, is there.
"Small and medium sized businesses are demanding industrial strength bandwidth, this is an opportunity to solve the problem on a pan European basis," said Feasey.
But unbundling the local loop will create problems: "You will hear a lot about these from copper owners over the next few months," said Feasey.
A new operator would have to place its equipment in the established telco's premises - called colocation - something that is not always simple. Running new services over existing voice and ISDN lines has raised questions of interference and new operators are limited by the reach of the copper owner's network.
The PTT must also cooperate in transferring high bandwidth traffic within its exchanges.
These problems and others, including lack of space at PTT's premises, will slow the roll out of local loop services by new operators in Europe, said Philippe Bodart, vice president international sales at telecomms network equipment maker, ADC Telecommunications. "The market is moving slowly. It takes three years [after unbundling] looking at the US experience," said Bodart. "We'll see the same in Europe. For regulation passed in 1998, by 2000 to 2001 you'll see a truly unbundled market."
Germany has recently opened up its local loop and MCI Worldcom is already in discussions with Deutsche Telekom about running services across its network. MCI Worldcom wants to offer broadband data services, using high speed ADSL technology, as well as voice.
The rest of Europe will watch the German experience closely. "If they can make a benchmark here, they can make it everywhere else as well," said Bodart.
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