Contrary to interconnection as regulatory issue for which an appropriate regulatory framework was created by the Interconnection Directive (directive 97/33/EC as amended by directive 98/61/EC), there exists no comparable statutory basis for unbundled access to the local loop. Accordingly, the decision on unbundled access to the local loop is taken autonomously by the respective Member States. At the national level, Art. 37 (1) TKG (and Art. 3 ZVO) point out the obligation for the company with significant market power to provide for unbundling. According to this obligation of Art. 37 TKG, the company with significant market power "shall enable other users to access his telecommunications network or unbundled parts of the same". Additionally, within the meaning of Art. 34 (1) TKG, services provided shall be non-discriminatory, i.e. that services which are not demanded need not be accepted if the organisation provides such services to itself or to other organisations in unbundled form. Thus, TKG clearly creates the basis for unbundling of the local loop. The calculation of the costs shall be based on the FL-LRAIC approach described in section III.2.2.2.2.

IIII.2.2.3.2 TKK's decision on unbundling¹

After unsuccessful negotiations TKK was called in by alternative network operators for the purpose of resolving disputes regarding the scope of and the charges for unbundled access to the local loop. TKK commissioned experts with expertise in economics, business administration and engineering. After the experts had investigated the respective fields thoroughly, the framework for unbundled access to the local loop was laid down by TKK on 02.07.1999 for the first time.

For determining the costs of efficient service provision both a bottom-up model (see section III.2.2.2) and a top-down model were used.

For determining return on investment an external expert opinion was commissioned. Taking into account additional cost components, such as operating costs and costs of fault clearance, a monthly rent of ATS 170.00 net was determined.

This price is valid throughout Austria; regional differentiation was not considered desirable by the market players in a preceding public consultation.

Leasing of parts of the local loop (sub-loop unbundling), e.g. in-house cabling, for the purpose of encouraging local competition was not considered necessary by TKK at that time.

After considering the technical outline conditions the Commission concluded that all transmission techniques - also high bit rate - can be used by alternative network operators. To safeguard the network integrity, however, in the first step only transmission systems may be connected which are also used by Telekom Austria. If others are to be used, they will have to be tested for their network compatibility together with Telekom Austria.

With regard to collocation, TKK upheld the request by the alternative network operators and ordered that physical collocation shall be provided if enough collocation space is available. With physical collocation the alternative network operator installs his transmission equipment and facilities on the premises of Telekom Austria. If this is not possible within the exchange for lack of space, an outdoor container/cabinet can be installed on the property where the exchange is located (virtual collocation). If there is not enough space either, the passive extension of the copper pair to a near collocation room shall be provided.

Right after the decision, Telekom Austria and alternative network operators started to investigate collocation options and establish connections to the networks. A large-scale roll-out is expected to occur in the third and forth quarters of 2000.

III.2.2.3.3 Outlook

The decision by TKK was limited in time until 30.09.2000. To provide for a new, consistent decision, TKC, in co-operation with the Wissenschaftliche Institut für Kommunikationsdienste (WIK) [Scientific Institute of Communications services], has been working on the introduction of an adjusted bottom-up model for the access network. This represents a derivative of the model used in the German decision of 1998, which is being revised so that the input shall become much more user-friendly due to a Geographic Information System (GIS), and also some optimisation algorithms of the access network are subjected to revision.