Rip-off Europe paying over the odds for leased lines

According to research released by analyst house Yankee Group yesterday, businesses in Europe are paying up to 150 times more for local broadband access via leased lines than their rivals overseas.

Yankee Group carried out the research on behalf of GTS, which is calling for the European Union to force national telcos to offer more competitive rates for leased line services.

GTS CEO Duncan Lewis argued that incumbents' apparent hobbling of broadband services has limited the potential customer base.

"I've never understood why the likes of British Telecom and France Telecom get fussed about unbundling at large, as you want as much traffic as you can get," he said. "The economic argument is to get as much traffic as possible, and that fuels the networks return.

"The price bears no relationship to the cost of providing it," Lewis added.

Ebone, a division of GTS, is issuing a charter covering the key points it believes should be adopted, calling for regulators to use their powers "more effectively" and governments to act on the directives they have already accepted.

Ebone's head of telco procurement, Iain Osbourne, said: "This is per the requirements set out in the 1992 Leased Line Directive and the 1997 Interconnection Directive and per the clear endorsement of European heads of government in the 1999 eEurope declaration."

GTS' broadband charter demands several points including legal action by the EC against member states failing to enforce the 1992 and 1997 directives, transparent accounting by incumbents and incumbent service level agreements which if breached will result in fines.

Not surprisingly this is a hot issue for GTS and it is no doubt looking to show shareholders it is taking positive action ahead of its first quarter results on 21 May.

Lewis admitted the company would be 'squeezed' if the issues are not dealt with in the near future.

"It's a killer long-term. We can sustain this right now but we'll be dammed if we're going to put up with this for much longer. It will start to really hurt eventually," he said.