Opening the Local Loop in Spain

Español.internet.com reports that the Minister of Science and Technology, Anna Birulés, is examining ways to open the local loop so that CLECs and independent ISPs can provide flat rate Internet access.

by Alex Goldman
Associate Editor, ISP-Planet
[June 13, 2000]

According to Español.internet.com, the Spanish government is about to take steps to ensure that residential users have reasonable, flat rate Internet access. The government noted that flat rate Internet access is now the norm outside of Spain.

Current monthly fees for residential Internet access are about 6500 Pesetas per month (about $37.22). The government hopes to lower those charges to between 3000 Pesetas (about $17.18) and 5000 Pesetas (about $28.64). These prices will be maximum charges — providers will be allowed to charge less, but will not be allowed to charge more.

Anna Birulés, minister of Science and Technology, said that in exchange for allowing access to the local loop, tariffs might be changed to increase the monthly phone charge.

Local loop charges are already inflated as part of the agreement with the government that opened interstate and international telephony to competition. The agreement allows the incumbent, Telefónica, to nearly double local phone rates in exchange for allowing competition in interstate and international calls.

Regulation still favors the recently privatized incumbent. Maurizio Giacometto, new media consultant at analyst firm, Intercai Mondiale, recently told Telecommunications Online that he sees sees Spain as one of the most interesting markets in Europe largely because of its regulators require new operators to have interconnect capability in 50 Spanish cities. This stipulation raises the cost of market entry and, by extension, protects the dominance of ex-PTT Telefónica.

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