A.1. Speed of process

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1 ANNEX I - BELGIUM A. REGULATOR - GENERAL FUNCTIONS A.1. Speed of process 1. What is the average timeframe for obtaining reservation of numbers? Pursuant to Article 5 5 of the Royal Decree concerning the management of the numbering plan, the Belgian institute for post and telecommunications ("BIPT") must notify its decision to the requesting party within 2 months after the reception date of the request. In practice, it takes approximately 2 weeks. 2. What is the average timeframe for reviewing reference interconnection offers (assessed over the past three years)? 24 weeks: BRIO (Belgacom Reference Interconnection Offer) 2002 was submitted by Belgacom for approval on 29 June 2001 and approved by the Minister of Telecommunications on 19 December 2001; BRIO 2003 was submitted on 18 June 2002 and approved by the Minister on 12 December 2002; BRIO 2004 was submitted on 7 July 2003 and approved by BIPT on 23 December The main concern of new entrants is that a final version of the BRIO (available on the Belgacom website) is only released by end-january of each year, which is too late for budgetary planning. 3. In practice, what is the average timeframe for the negotiation of an interconnection agreement for a new entrant which does not yet have an interconnection agreement with the incumbent operator? Pursuant to Article 1 of the Royal Decree of 19 March 2003 amending the Royal Decree of 10 December 1997, BIPT can fix at any time a timeframe within which the negotiations of an interconnection agreement must be finalised. During such negotiations, the BIPT can intervene at any time. Negotiation of an interconnection agreement may take between 3 months to 1 year. However, it is expected that an operator entering the market today would be able to negotiate an interconnection agreement more quickly. A.2. Transparency 4. Is your NRA required to hold public consultations prior to deciding on issues of general interest? There is no general obligation to use public consultations, but it may be used on an ad hoc basis and upon request. In practice, the BIPT has held a number of market consultations, although it will only do so for matters which are of general interest for the entire telecommunications market. In its last Management Plan of 31 July 2003, however, the - 1 -

2 BIPT referred to the fact that it would systematically consult all interested parties prior to adopting a decision. Also, BIPT has given a broad interpretation of its obligation to hear each person that is directly and individually concerned. 5. Explain how the decision making process works within the NRA. Does it provide at any or some stage of the procedure, some transparency or visibility on the decision making process? Article 19 of the Law of 17 January 2003 on the BIPT (the "Law of 17 January 2003") requires the Council of the BIPT (the "Council") to hear every person that is directly and individually concerned by a decision. However, there is no formal requirement for the regulator to provide interested parties with information on the decision which is in the process of being adopted. BIPT has circulated draft decisions to interested parties for consultation on an ad hoc basis. 6. Is your NRA required to effectively motivate its decisions? If so, is there any possibility of appeal in the event of the NRA's violation of its obligation to motivate its decision? Within what timeframe? The Law on the formal motivation of administrative acts of 29 July 1991 includes a general obligation to motivate every administrative decision. In addition, certain specific provisions such as those provided for in Articles 99 2 and al.2 of the Law of 21 March 1991 provide that the BIPT is obliged to motivate its decisions. In practice, the degree of motivation of the BIPT can be fairly limited. However, it appears that since the adoption of the new Law of 17 January 2003 on the BIPT, the practice of the BIPT has improved in this respect. 7. Is your NRA required to publish all its decisions upon their adoption? Pursuant to Article 22 8 of the Law of 17 January 2003 on the BIPT, the BIPT is expected to publish its decisions on its website. In the past, however, it has happened that the BIPT adopted a decision without any formal publication. A Royal Decree establishing the housekeeping rules still needs to be adopted and should include rules for the notification and publication of decisions and advices of the BIPT Council, as well as the timeframe for such notification/publication. 8. Does your NRA have a "management plan" disclosing its action plan on an annual basis? If yes, is it public? A management plan must be published every six months (Article 34 al. 2 of the Law of 17 January 2003 on the BIPT) and is available on the BIPT website. A.3. Effectiveness of sanctions and scale of resources 9. Is your NRA entrusted with the power to impose fines? If so, up to what level? Does it include also the possibility of imposing periodic penalty payments or of suspending the commercial launch of services? Yes. Article 21 2 of the Law of 17 January 2003 on the BIPT provides that the Council may impose an administrative fine of maximum EUR for individuals or ranging between 0,5% and 5% of the last annual turnover realised on the relevant market. The fine cannot, however, exceed EUR 12,5 million. The Law of 17 January 2003 on the BIPT does not provide for the ability to impose periodic penalty payments

3 In the event of serious or repeated breaches, the Council can impose a partial or total suspension of the network exploitation, the supply of services, or the commercialisation or use of any concerned service or product. 10. Are the powers of your NRA clearly defined by law? Yes. Pursuant to a judgement of the European Court of Justice of 19 September 2002, Belgium was condemned for failure to properly implement Articles 7.5 and 9.3 of Directive 97/33/EC, to the extent the Law of 21 March 1991 did not explicitly provide for a possibility for the BIPT to intervene "at any time". This competence was explicitly granted by the Royal Decree of 19 March 2003 implementing Articles 7.5 and 9.3 of the Directive 97/33/EC. In addition, Belgacom and Belgacom Mobile are currently contesting the ability for BIPT to intervene in interconnection disputes. The power for the BIPT to intervene in price squeeze matters remains, however, unclear. The BIPT has recently confirmed that it considers the Competition Council to be solely competent regarding price squeeze issues. Similarly, the competencies of the BIPT regarding universal service also remain unclear (e.g., audit of methodology of net cost calculation of providing universal service, decision regarding unfair burden, etc). 11. What is the number of employees employed for general regulatory issues (excluding frequency and numbering management)? How many competition economists are included in the staff? Around 25. The BIPT was granted resources in 2003 for additional staff (20 people), who are in the process of being recruited for regulatory issues. 12. What are the specific procedures for selecting NRA's personnel? (Specific exams/ general State recruitment exams) The BIPT's personnel can be either civil servants or employees. Civil servants are selected on the basis of general state recruitment exams organised by the Selor (Federal office for recruitment for civil servants jobs) and then a subsequent exam organised by the BIPT. 13. Does your NRA have the financial freedom to set levels of remuneration to attract appropriate staff? Pursuant to the Royal Decree of 11 July 2003 amending the Royal Decree of 18 March 1993 fixing the financial status of the BIPT s personnel, most of the staff are civil servants and are therefore subject to a fixed pay-scale (which cannot match private sector compensation levels). It is, however, possible for BIPT to hire on an ad hoc basis external persons on a contractual basis (Art. 73 of the Law of 21 March 1991 and Royal Decree of 18 March 1993). It should also be noted that the remuneration of the Members of the Council of the BIPT was set significantly higher than the pay scale applied to civil servants. 14. Can your NRA have recourse to outside expertise such as consultants? While allowed by law, outside experts are generally used on a limited basis due to budget restrictions. The new Law of 17 January 2003 on the BIPT grants the BIPT with financial autonomy, allowing it to more often consult outside expertise. A.4. Effectiveness of appeal procedure 15. Does the appeal of a NRA decision suspend the binding effects of the decision in question? - 3 -

4 Pursuant to Article 2 2 of the Law of 17 January 2003 on Legal Remedies and Dispute Settlement Procedures, an appeal of the BIPT s decision does not suspend the decision, except for those adopted on the basis of Article 21 2 and 3 of the Law of 17 January 2003 on the BIPT (i.e., decisions imposing a fine). It is also important to note that pursuant to Article 15 1 of the Law of 17 January 2003 on the BIPT, the Council of Ministers can, on the proposal of the Minister of Telecommunications, and through a motivated decree, suspend the execution of certain decisions taken by the BIPT. After approval of the Council of Ministers, the King will establish the list of decisions for which the BIPT has violated the law or which are contrary to general interest. 16. If the appeal does not suspend the binding effects of the decision of the NRA, what is the applicable standard to obtain such suspension and how is it applied in practice? There is no case law yet interpreting the standard that must be met to obtain such suspension. In the event the Court of Appeal would follow the case law of the Supreme Administrative Court (the Council of State), however, suspension would only be obtained in the event the decision would cause serious and irreparable harm, which is applied very restrictively by the Council of State. 17. What is the percentage of decisions that have been appealed? 60% (in 2003) What is the average timeframe for an appeal procedure? There are no precedents as of 31 December However, the procedure is expected to take approximately 6 months to 1 year. A.5. Independence 19. Is your NRA subject to any injunctions from political authority (other than through removal), when it grants authorizations (services/networks licences, frequency and number authorizations) or enforces SMP regulations (e.g., ex ante approval of standard interconnection offers, compliance with cost accounting separation)? Before the Law of 17 January 2003, the BIPT was headed and managed by the Minister of Telecommunications, who was also responsible for the Government's share in the incumbent operator (Belgacom). This led the Commission to consider in its 7 th Implementation Report that there was no legal guarantee for BIPT's independence. Under the new Law of 17 January 2003 on the BIPT, the BIPT has become an independent administrative authority. There are three caveats to this: First, Article 15 of the Law of 17 January 2003 on the BIPT still provides for the possibility for the Council of Ministers to suspend a decision of the BIPT on matters which have been determined in a Royal Decree, when such decision is considered illegal or contrary to the public interest. Although such Royal Decree (which must be adopted within a period of 3 months after the entry into force of the law) has not yet been adopted, it appears that the Government is still planning 1 This figure corresponds to the appeals lodged against the decisions of the BIPT under the new procedure which entered into force in

5 to adopt it. Accordingly, this potential for political intervention still appears to be a cause of concern. Second, the licences required under the current regulatory framework (i.e., voice telephony, fixed network and mobile licences) are still granted by the Minister of Telecommunications. Under the new regulatory framework, the licences currently granted by the Minister will be replaced by authorisations granted by the BIPT. Third, grounds for removal still allow a certain degree of political intervention. 20. What is the duration of office of your NRA's management? Is there a possibility of reappointment? 6 years (Article 17 2 of the Law of 17 January 2003 on the BIPT). Article 17 2 al. 2, 3, also provides for the possibility of re-appointment. 21. What are the grounds for removal of your NRA's management? Under Article 17 5 of the Law of 17 January 2003, the members of the Council are dismissed on the proposal of the Minister of Telecommunications, after approval of the Council of Ministers. In addition, Chapters V and VII of the Royal Decree of 11 May 2003 fixing the financial remuneration of the President and the members of the Council (the "Royal Decree of 11 May 2003") provide for an evaluation of the President and the members of the Council every two years and a final evaluation at least six months before the end of the 6-year term (Article 14). According to Articles 20 and 21, the Government may decide to remove the President or the members of the Council in the event of (i) non-compliance with their general obligations of competence, integrity or independence provided for under Article 17 3 of the Law of 17 January 2003 or (ii) a negative evaluation. 22. What are the eligibility requirements for your NRA's management? The Council is composed of a President and three members, with parity between Dutch and French-speaking members. Pursuant to Article 17 2, 3 of the Law of 17 January 2003, the members of the Council are elected on the basis of their competencies, integrity and independence. They are elected by the King on the proposal of the Minister of Telecommunications after approval of the Council of Ministers. The members of the Council may not have any interest in undertakings that are active on the telecommunications market and may not exercise any functions in such companies. The Law of 17 January 2003 also provides for a "cooling off" period of two years after holding such position. Under Article 4 of the Royal Decree of 11 May 2003, the President must have professional experience of at least ten years in the telecommunications or postal sector. The other members of the Council must have professional experience of at least five years in the postal or telecommunications sector or experience as an economic analyst of at least five years, in addition to experience in negotiations with European institutions. 23. Are clear objectives assigned to the NRA for its long term actions? Are such objectives set in the law or defined by the NRA's? - 5 -

6 There are no long-term objectives provided for in the law. However, the BIPT defines its activities/objectives for the next 6 month period in its Management Plan, which is published every six months (available on its website). 24. What percentage of the incumbent share capital is held by the Government? Does it confer control? The Belgian State currently controls Belgacom and holds 50% plus one share. B. REGULATORY DISPUTE SETTLEMENT B.1. Speed of process 25. What was, over the past two years, the average timeframe for obtaining a decision from your NRA acting in a capacity as a dispute settlement body? The average time frame for obtaining a decision of the Interconnection Chamber was 4 months. The Law of 17 January 2003 on Legal Remedies and Dispute Settlement Procedures, which abolished the Interconnection Chamber and granted the competence to the Competition Council, provides that the Competition Council must take a decision within four months when it acts as a dispute settlement body (Article 4). So far, no procedure has been initiated before the Competition Council on the basis of this competence, so it is not possible to assess whether the Competition Council will be able to comply with this timeframe. Compliance with the 4 month timeframe could constitute an issue in practice, given that there is no specific sanction in the event of non-compliance, and the Competition Council is manifestly under-staffed. Under the Competition Council's current administrative practice, it may take more than one year to obtain interim measures. 26. Can your NRA adopt interim measures? The Law of 17 January 2003 on Legal Remedies and Dispute Settlement Procedures does not explicitly provide for the competence to grant interim measures to the Competition Council. It is arguable whether the Competition Council could take provisional measures under the provisions of Section 6 of the Law of 5 August 1991 on the Protection of Economic Competition. B.2. Due process 27. Is the dispute settlement process subject to the principle of contradiction? Yes. Under Article 27 of the Law of 5 August 1991 on the Protection of Economic Competition. 28. What are the possibilities to appeal a decision of the NRA acting as dispute settlement body? Pursuant to Section 9 of the Law of 5 August 1991 on the Protection of Economic Competition, decisions of the Competition Council can be appealed before the Court of Appeal of Brussels. It is unclear whether this would also apply to decisions adopted by the Competition Council acting in its capacity of dispute settlement body. B.3. Effectiveness of sanctions 29. Is your NRA entitled to impose fines or periodic penalty payments? - 6 -

7 Section 7 of the Law of 5 August 1991 on the Protection of Economic Competition provides for the possibility for the Competition Council to impose fines and periodic penalty payments. However, these sanctions only apply to competition law infringements or failure to cooperate in the course of the investigation. There are no explicit sanctioning powers for the Competition Council when it acts as a dispute settlement body in accordance with the Law of 17 January 2003 on Legal Remedies and Dispute Settlement. 30. Does your NRA have the power to enforce its own decision? BIPT is in charge of ensuring compliance with the decision of the Competition Council when it acts as a dispute settlement body. B.4. Effectiveness of appeal procedure 31. Does the appeal of a NRA decision suspend the binding effects of the decision in question? There is no automatic suspension (Article 43bis 4 of the Law of 5 August 1991 on the Protection of Economic Competition). 32. If the appeal does not suspend the binding effects of the decision of the NRA, what is the applicable standard to obtain such suspension and how is it applied in practice? There is no case law yet interpreting the standard that must be met to obtain such suspension. In the event the Court of Appeal would follow the case law of the Supreme Administrative Court (the Council of State), however, suspension would only be obtained in the event the decision would cause serious and irreparable harm, which is applied very restrictively by the Council of State. 33. What is the percentage of decisions that have been appealed? As of 31 December 2003, no dispute settlement procedure has been initiated before the Competition Council and therefore, no decisions have been adopted on the basis of this new competence. Before the Law of 17 January 2003 granted this competence to the Competition Council and abolished the Interconnection Chamber, the Interconnection Chamber had adopted four decisions, none of which was appealed before the Council of State. 34. Average timeframe for an appeal procedure? There are no precedents as of 31 December However, the procedure is expected to take approximately 6 months to 1 year. C. APPLICATION OF ACCESS REGULATION C.1. Cost orientation 35. Is there a detailed model covering each and every or all regulated services for SMP operators? There is a model for fixed voice interconnection services (i.e., terminating, collecting, transit, access to IC-links and an access point). BIPT published a document entitled "Description of the top down cost model of the BIPT for the calculation of the interconnection tariffs of BRIO 2003" on 1 December For 2003, BIPT confirmed the cost oriented character of the BRIO tariffs in its advice of 12 December In addition, BIPT worked on an bottom-up cost model for interconnection and was expected to publish the results of this model - 7 -

8 during the first quarter of The interconnection charges for 2004 are likely to be adapted after reconciliation of the top-down and the bottom-up model. For mobile interconnection services, BIPT has published: a decision of 23 September 2003 on the mobile termination charges applied by Mobistar on the basis of the CCA (current cost accounting ("CCA")) cost model; an advice of 17 December 2001 on mobile termination charges applied by Proximus. For wholesale bitstream services, BIPT published an advice of 16 January 2003 approving the BROBA (Belgacom Reference Offer for Bitstream Access) for 2003, which includes a section on the cost oriented character of the tariffs. The degree of detail of the cost analysis is limited. For ULL services, BIPT has published one advice on 9 January 2003 approving the BRUO (Belgacom Reference ULL Offer), which includes a section on the cost-oriented character of the services. The degree of detail of the cost analysis is limited. There is no publicly available document analysing the cost-oriented character of leased lines. 36. What is the type of cost accounting methodology used? The cost accounting method is presently based on fully distributed costs ("FDC"). Assets are valuated on the basis of the current cost accounting method ("CCA"). 37. Does the NRA have the power to seek cost orientation of retail tariffs? Yes, pursuant to Article 106 of the Law of 21 March 1991, BIPT has the power to ensure compliance with the cost orientation obligation. C.2. Cost accounting separation 38. Are SMP operators subject to effective cost accounting separation obligations? In its judgement of 19 September 2002 (Case C-221/01), the European Court of Justice condemned Belgium for failure to implement Article 7(5) of Directive 97/33, according to which the NRA must ensure a description of the cost accounting system showing the main categories under which costs are grouped, and the rules of applying cost allocation to interconnection must be made available on request. Pursuant to this judgement, the legislator adopted a provision which explicitly provides for the power of the BIPT to verify compliance with the obligation of cost accounting separation (Article 109ter, 4 last paragraph). The BIPT has verified Belgacom's accounts for There is no possibility for third parties to verify this exercise. C.3. Availability of information 39. Is there any information available (e.g., number of subscribers, key for cost allocation between network components, WACC) enabling competitors/third parties to understand cost - 8 -

9 models and assess regulated operators' compliance with their cost orientation and accounting separation obligations? The Communication on the description of the BIPT top down cost model for the calculation of BRIO 2003 of 1 December 2002 (see contains some information on the cost model used. However, it lacks any concrete information which would allow third parties to verify compliance with cost orientation and cost accounting obligations. 40. Are the accounts drawn in accordance with cost accounting separation effectively published? This information is not publicly available. C.4. Procedures satisfying access requests in an effective and timely fashion 41. What is the procedure for the negotiation of a reference interconnection agreement or standard interconnection agreement with the incumbent. If there is no standard agreement, please elaborate. What is the timeframe for entering such an agreement - are there any material barriers to entering such an agreement? Article 1 of the Royal Decree of 19 March 2003 amending the Royal Decree of 10 December 1997 on the numbering plan and the Royal Decree of 20 April 1999 on interconnection agreements provides that the BIPT can fix at any time a timeframe for the negotiation of an interconnection agreement. 42. Is there a standard procedure available for operators to negotiate alternative access products/services not explicitly provided for in the standard reference interconnection offers? The procedure is set forth in the "Communication of the BIPT on interconnection requests outside the scope of a reference offer" (29 January 2002). The Communication provides that: in case of a request for an interconnection service for which a retail service is available on the market by an SMP operator, the underlying interconnection service must be made available from the launch date of the retail service by the SMP operator; in case there is no retail service available yet, the following timetable must be respected: Introduction of request (D); Written confirmation of receipt of request (D + 10 working days); Significant progress made (D + 3 months); Agreement reached (D + 6 months); Implementation on case by case basis. The Communication contains a number of parameters which will be taken into account by the regulator when deciding on whether the request does constitute a request for interconnection and whether such request is reasonable. C.5. Rights of way 43. Are operators entitled to free rights of way on public land? - 9 -

10 Although licenced operators benefit from free rights of way on public land, there is growing pressure from municipalities and Regions to claim financial charges or impose certain conditions. In this respect, the Flemish Government issued a decree imposing fees on operators for the use of the public domain. The legality of this decree is being challenged by both the Federal Government and some operators before the Council of State. D. KEY ACCESS PRODUCTS D.1. Voice interconnection 44. What is the level of interconnection tariffs for call termination with interconnection at the tandem switch level? Termination single transit : 1,12 Eurocents (9 th Implementation Report, Annex 1, p. 25). Termination double transit : 1,30 Eurocents (9 th Implementation Report, Annex 1, p. 25). 45. Do detailed cost models for SMP operators exist? Some information on Belgacom's cost model is contained in the Description of the BIPT cost model for the calculation of interconnection tariffs for BRIO 2003, (Communications of BIPT of 1 December 2002, see The consultation in autumn 2003 on the bottom-up cost model sought to provide some transparency on the cost model used for voice interconnection services, although certain market players did not consider the degree of transparency to be satisfactory. 46. Does the NRA have the power to apply a price squeeze test and the power to review the level of retail tariffs on the basis of alleged discriminatory access at wholesale level? Has your NRA applied this power effectively? No. The BIPT does not consider itself competent to apply a price squeeze test except where it is explicitly granted (e.g., for ULL services). Pursuant to a consultation, the BIPT issued a proposal to include such power in the Law of 21 March 1991 (Second Consultation of the BIPT of 2 July 2001 on the application of a price squeeze in the telecommunications sector). However, such proposal has not been retained under the new Law of 17 January 2003 on the BIPT. Still, it should be mentioned that the BIPT has applied the price squeeze test at certain specific occasions within the scope of the assessment of the reasonable character of interconnection requests. It should also be noted that certain OLOs have lodged a complaint against Belgacom before the Belgian Competition Council on the basis of a price squeeze. In the context of this procedure, the BIPT has intervened indicating that, in its view, there was a margin squeeze. However, the case for interim measures has been pending for more than a year now, which illustrates the need to provide such competence to the NRA as well. D.2. Leased lines and partial private circuits offer 47. Are there any wholesale private line offers ("ppcs") in your country? Yes, provided in BRIO 2003 ("Belgacom half links"). In its Communication on half links of 30 July 2002, BIPT indicated that there should be no restriction on the use of half links. Belgacom restricted the use of half links by operators, in the sense that they could only use half links in order to compete on the retail leased line market and not for other use

11 48. Comparison of tariffs for wholesale leased lines offers for 2Mbits/s on average distance of 2 km? EUR per year (9 th Implementation Report, Annex 1, p. 86) 49. Do detailed cost models exist for SMP operators? There is no publicly available document analysing the cost-oriented character of leased lines. In its "Communication on half links tariffs" of 10 September 2003, the BIPT rejected the cost models proposed by Belgacom and requested a modification, which will enter into force retroactively as from 1 January Does the NRA have the power to apply a price squeeze test and the power to review the level of retail tariffs on the basis of alleged discriminatory access at wholesale level? Has your NRA applied this power effectively? No (see Question 46). In its decisions concerning BRIO 2004, BIPT imposed a reduction of the half links tariffs on the basis of a "viability" test in comparison with the tariffs of leased lines. To set tariffs for 2004, BIPT has developed a stricter test taking into account: maximum discount rates (for volume and duration) applicable to leased lines, other types of existing discounts (BCS, Global Contract and High Capacity) applicable to leased lines and business costs or other comparable costs. 51. Are there effective measures to prevent discrimination in the provision of ppcs and leased lines? There is no public reporting on provisioning times for commercial leased lines or for PPCs. However, it should be pointed out that there have been no complaints on the subject and that BRIO guarantees the same SLA to half links as to retail leased lines. D.3. Fixed to mobile 52. Do detailed cost models exist for SMP operators? The decision of 23 September 2003 on mobile termination charges applied by Mobistar and the opinion of 17 December 2001 on mobile termination charges applied by Proximus verify compliance of tariffs with the cost orientation obligation. Although such documents provide a certain degree of transparency as to the cost model that has been applied, certain market players do not consider that the degree of detail is satisfactory and comparable to, e.g., the cost model for fixed operators. In addition, for Proximus, BIPT has recognised that it has not imposed a strict obligation of cost orientation in its advice of 25 July What is the average interconnection charge for fixed to mobile calls? 17,93 Eurocents/min. (9 th Implementation Report, Annex 1, p. 29). 54. Does the NRA have the power to apply a price squeeze test and the power to review the level of retail tariffs on the basis of alleged discriminatory access at wholesale level? Has your NRA applied this power effectively? See Question

12 D.4. Local loop unbundling 55. Is there a detailed cost oriented model in relation to ULL? No. The BIPT opinion of 9 January 2003 approving the BRUO includes a section on the cost-oriented character of the services, but is of limited detail. For ULL, neither the incumbent operator nor BIPT has developed a specific cost accounting model. The cost standard used for full unbundling is retail minus. ULL tariffs for shared access is based on a bottom up approach using the current cost accounting methodology. However, no information is being published to enable third parties to verify this. 56. What is the tariff charged for ULL access? 16,4 EUR/month (9 th Implementation Report, Annex 1, p.61). 57. What is the number of unbundled lines as a percentage of total lines? 0,07 % (ECTA Scorecard). 58. Does the NRA have the power to apply a price squeeze test and the power to review the level of retail tariffs on the basis of alleged discriminatory access at wholesale level? Has your NRA applied this power effectively? Yes. Article 108bis, 3 of the Law of 21 March 1991 provides that: "The institute shall take any appropriate measures to ensure effective competition on the market for unbundled local loop access". Based on this provision, BIPT can intervene against price squeeze or discriminatory practices regarding local loop access. This power has been used to verify the regulated price of full unbundled lines and shared access lines. D.5. Wholesale DSL products 59. Is there a detailed cost oriented model in relation to wholesale DSL products? BROBA 2003 tariffs were calculated on the basis of a cost model that is essentially based on the current cost accounting method. However, there are certain issues in the calculation of costs for bitstream services, as a result of which the cost orientation principle is not fully enforced. In addition, it should also be mentioned that the bitstream access offering in Belgium is more advanced than in most of the other EU Member States. More specifically, the BROBA offer consists of two parts, BROBA I and BROBA II. BROBA I is limited to access to the DSLAM infrastructure of the incumbent operator. BROBA II also allows use of the ATM-backbone network of the incumbent operator, allowing deployment of a national DSL-offering by the OLO, without the need for physical presence in every DSLAM-access point. Such distinction introduces an additional level of complexity for the cost calculation. Currently, the full details of the complete model are not publicly available. However, some key cost components, such as number of users ADSL/SDSL, capacity per user, other usage of the network, WACC, total amounts of investments, etc. are disclosed. 60. Is a wholesale offer published so as to enable launch at the same time as the SMP-operator? In the past, Belgacom launched its retail adsl product in 1999, while no comparable offer was made available to competitors. The Communication of the BIPT on interconnection requests that fall outside of the scope of a reference offer of 29 January 2002 provides that, in case of a request for an interconnection service for which a retail service is available on the market by an SMP

13 operator, the underlying interconnection service must be made available. In addition, the BIPT advice on BROBA 2003 provides that: "Belgacom should ensure that it extends its reference offer to new services which it provides on the retail market to avoid a distortion of competition". (Chapter 4, point 3.1 of the "BIPT opinion on the Belgacom Reference Offer for Bistream Access"). 61. Are the terms of the wholesale offer equivalent to the terms benefited by the SMP-operator downstream operating retail arm? No information is publicly available to verify this. In October 2003, Belgacom launched an ADSL retail offer providing for significantly lower retail tariffs, which reduces the margin between retail and wholesale products for competitors and raises concern of price squeeze and discrimination. The BIPT has recently started an inquiry to examine potential discriminatory practices for bistream access services and issued a statement of objections to Belgacom in relation to wholesale access requested by an OLO for the launch of a retail ADSL offer. 62. Are there volume order requirements per site? No. 63. Is there an access option at the nearest ATM node? Yes. 64. Is a price squeeze test applied by your NRA? Does your NRA have the power to review the level of retail tariffs on the basis of alleged discriminatory access at wholesale level of SMP-services; and if so does it apply such power in practice? Yes. Article 6octies, 2, of the Royal Decree of 22 June 1998 on the conditions for the establishment and operation of public telecommunications networks provides that in relation to bitstream access services: "Any SMP operator on the market of fixed public telephone networks shall meet the following obligations as of 1 January 2001: ( ) 2 it shall publish the rates for bitstream access. These rates shall be cost oriented, non-discriminating and shall not lead to unfair competition." Based on this provision, the BIPT could intervene against a price squeeze practice. Moreover, the requirement that the BROBA prices must not be discriminatory and must not lead to unfair competition should enable BIPT to impose an obligation on Belgacom to modify its retail tariffs. This power has been used to verify the regulated price of bitstream regulated offers, including timing, ATM transport and access line aspects. There is also an improved SLA (service level agreement), which is optional for new entrants. E. IMPLEMENTATION OF THE NEW REGULATORY FRAMEWORK 65. Has the new regulatory framework been transposed in your country? If so, when? No. As of 31 December 2003, the new regulatory framework had not yet been transposed. BIPT has, however, issued administrative guidelines in relation to the transitory regime. 66. Has the NRA completed the market analysis? 0 registered "Article 7" notifications received by Commission (see