commiss recommend april interconnect liberalis telecommun market part account separ cost account text eea relev ec commiss european commun regard treati establish european commun regard direct ec european parliament council june interconnect telecommun regard ensur univers servic interoper applic principl open network provis onp articl thereof direct ec nation regulatori author telecommun nra import role secur adequ interconnect network accord commun law take account recommend laid commiss facilit develop genuin european home market articl direct ec requir commiss draw recommend cost account system account separ articl direct ec requir organis notifi nra signific market power hereinaft refer notifi oper follow principl transpar cost orient interconnect charg articl direct ec requir notifi oper separ account hand activ relat interconnect cover interconnect servic provid intern interconnect servic provid hand activ identifi element cost revenu basi calcul detail attribut method relat interconnect activ includ itemis breakdown fix asset structur cost commiss recommend ec januari interconnect liberalis telecommun market part interconnect price consid approach interconnect price base forward long run averag increment cost compat competit market approach preclud justifi mark up mean recov forward joint common cost effici oper aris competit condit approach interconnect price base forward long run averag increment cost entail account system base current cost histor cost commiss recommend member state recommend januari set deadlin implement notifi oper account system base activ base cost bottom econom engin model highli sophist imperfect reconcili top bottom approach advis forese futur articl direct ec requir nra ensur descript cost account system show main categori cost group rule alloc cost interconnect made request interest parti alloc method displai level detail make clear relationship cost charg network compon servic usag factor basi unattribut cost alloc account provid complianc cost account system verifi nation regulatori author compet bodi independ telecommun organis approv nra financi statement complianc publish annual articl direct ec european parliament council decemb applic open network provis onp voic telephoni requir tariff fix public telephon network voic telephoni servic follow basic principl cost orient transpar includ implement notifi oper suitabl cost account system purpos contribut interconnect parti access deficit type scheme permiss tariff constraint impos nra ground afford access telephon servic accord articl direct ec commiss commun novemb assess criteria nation scheme cost financ univers servic telecommun guidelin member state oper scheme believ scheme disappear januari commiss direct eec june competit market telecommun servic amend direct ec requir member state ensur effect competit oper compet relev market transpar requir respect cost account oper provid fix network mobil telecommun network articl commiss direct ec octob amend direct eec regard abolit restrict cabl televis network provis liberalis telecommun servic requir member state ensur account transpar prevent discriminatori behaviour oper exclus provid public telecommun network infrastructur cabl tv network infrastructur ensur separ financi account concern provis network activ provid telecommun servic articl direct ec notifi oper special exclus right provis servic sector cabl satellit tv broadcast requir separ account telecommun activ extent requir telecommun activ question carri legal independ compani structur separ telecommun activ activ articl direct ec requir organis provid public telecommun network publicli telecommun servic suppli financi inform nra promptli request level detail requir nra publish inform contribut open competit market take account consider commerci confidenti applic principl recommend prejudic duti member state undertak compli fulli commun competit rule take account specif posit set commun commiss applic competit rule access agreement telecommun sector advisori committe set articl council direct eec onp committe broad support principl contain recommend commiss utmost account view express make recommend recommend concern implement account separ cost account system oper design nra signific market power hereinaft refer notifi oper accord articl direct ec implement interconnect oblig regard principl transpar cost orient purpos account separ provid analysi inform deriv account record reflect close perform part busi oper separ busi recommend nra requir notifi oper disaggreg oper cost capit emploi revenu broad busi line core network switch infrastructur core network cover provis interconnect servic transit servic carrier carrier servic local access network local loop infrastructur local access network cover provis connect telephoni network retail retail busi cover activ relat commerci provis fix telephoni servic leas line end user separ account prepar activ retail subject regul leas line telephoni activ activ cover activ provid notifi oper includ unregul activ type regul activ account regul unregul activ separ section annex defin scope busi transfer charg busi identifi section disaggreg account broad busi line consid nra regard transpar competit requir demand nation commun law mobil cabl tv intern activ recommend alloc cost capit emploi revenu accord principl cost causat activ base cost abc cost system notifi oper suffici detail permit alloc cost unbundl network compon determin cost unbundl interconnect servic defin cost alloc system enabl cost alloc basi direct indirect cost causat recommend unattribut cost cost attribut arbitrari basi identifi specif account subject specif treatment nra distribut rule determin member state accord commun competit rule complianc principl transpar proportion recommend nra undertak public consult market player adopt sound alloc method specif treatment unattribut cost section annex outlin recommend principl alloc cost capit emploi revenu prepar separ account section annex guidanc applic principl calcul oper cost includ depreci section cost capit capit emploi section revenu recommend januari nra recommend set deadlin notifi oper implement cost account system base current cost recommend methodolog criteria evalu network asset current fix nra public consult market player evalu network asset forward current effici oper prevail market vigor competit kei element current cost account cca methodolog requir depreci charg includ oper cost calcul basi current valuat equival asset report capit emploi current cost basi appendix annex guidanc modern asset valuat current cost adjust methodolog regard deriv interconnect price nra requir effici factor appli recognit fact cca valu network fulli reflect cost effici oper end practic interconnect charg provid recommend januari constitut suitabl point refer recommend oper requir report account separ provid profit loss statement balanc sheet separ busi transfer charg purchas busi identifi recommend content format financi regulatori report provid notifi oper section annex consist recommend financi report separ regulatori account consolid profit loss statement balanc sheet compani reconcili separ regulatori account statutori account oper suggest recommend nra make relev account inform notifi oper request interest parti suffici level detail ensur undu discrimin provis servic intern provid extern enabl averag cost unbundl interconnect servic identifi respect public notifi oper suffici detail cost statement show averag cost network compon increas transpar rais confid part competitor anti competit cross subsidi consid import cross border interconnect servic intern activ addit member state oper scheme financ univers servic oblig access deficit contribut recommend nra make suffici account inform notifi oper ensur discrimin charg levi oper levi implicitli intern account guidelin concern regulatori report intend replac statutori financi report requir member state recommend review commiss juli latest recommend address member state brussel april commiss martin bangemann member commiss oj oj oj oj oj oj oj oj includ compon network traffic sensit dedic custom includ local loop line card port locat concentr exchang directli attribut cost cost directli unambigu relat product servic indirectli attribut cost cost apport product servic measur arbitrari basi base relationship cost directli attribut cost usag factor consum share resourc asset excess requir network architectur optim implement bottom econom engin model provid inform ineffici annex guidelin implement account separ account separ local access network local access network connect core network account local access network busi includ cost capit emploi provid maintain connect account separ local access network busi includ custom dedic compon network includ line card port locat concentr exchang core network busi includ network compon custom line rental servic provid retail busi revenu line rental provid end user record retail line rental revenu unbundl local loop made market player assign local access network busi cost provid custom line initi record local access network busi transfer cost retail order match revenu cost cost transfer retail net local access revenu line rental revenu market player access deficit contribut section core network core network busi rang wholesal interconnect servic intern extern order custom oper commun custom oper access servic provid oper servic includ switch convey call addit core network busi provid servic oper engin servic relat develop mainten privat network develop competit number portabl carrier select account core network busi includ cost revenu capit emploi provis servic revenu core network busi deriv princip sale interconnect servic retail busi oper nation regul permit wholesal provis transmiss circuit revenu book core network busi retail retail busi includ activ involv sell telephoni servic end user includ line rental leas line call payphon provis directori inform account retail busi includ cost revenu capit emploi provis servic end user cost alloc retail includ transfer charg relat network resourc servic provid local access network core network busi market bill cost provis end user servic nra extent retail account disaggreg distinguish cost revenu individu servic take account transpar requir nation commun law separ account prepar activ retail subject regul requir separ account prepar activ subject regulatori control activ incumb oper typic provid wide rang servic includ rental repair mainten custom equip addit interest telecommun activ tv broadcast purpos account separ cost revenu capit emploi activ separ identifi nra individu account prepar addit activ relev incumb oper oper mobil activ separ busi individu nra extent separ account activ prepar take account transpar requir nation commun law transfer charg section guidelin set principl appli oper order account cost product servic intern system transfer charg appli servic product provid busi local access network core network retail clear rational transfer charg charg support charg discriminatori discuss section transpar transfer charg separ account measur intern usag transfer charg intern usag determin product usag unit charg charg intern usag equival charg levi product servic sold extern intern account separ purpos assum oper retail busi pai interconnect charg servic access deficit contribut univers servic contribut interconnect direct requir charg interconnect separ charg relat univers servic includ charg impos result oper prevent nra rebalanc tariff access deficit contribut adc commiss tariff rebalanc complet januari member state grant addit implement period accord full competit direct member state oper access deficit scheme adc assign local access network busi adc recov oper retail busi discrimin adc charg retail adc charg oper member state oper scheme financ univers servic oblig contribut oper intern separ identifi account adc discrimin univers servic contribut charg oper contribut charg intern principl cost alloc section set principl order alloc cost capit emploi revenu purpos prepar separ account applic principl oper cost capit emploi revenu consid detail section principl relev determin interconnect charg unbundl interconnect servic purpos cost system oper suffici detail permit alloc cost unbundl network compon number addit factor relev cost account determin charg specif interconnect servic issu scope guidelin principl account separ base principl causat cost revenu alloc servic product cost revenu aris requir implement detail cost alloc methodolog practic requir oper review item cost capit emploi revenu establish driver caus item aris driver alloc item individu busi alloc subject review nra item cost revenu alloc product servic provid oper case revenu anticip revenu alloc directli product servic relat case cost high proport cost oper share product servic methodolog cost alloc process figur illustr typic cost alloc process note actual alloc process vari depend entiti organis structur financi oper data captur consider complex involv figur impli import note ultim aim alloc cost process start inform data captur gener ledger cost financi system oper compani cost inform held system divid oper cost capit cost account entri depreci cost attribut directli servic cost pool call network compon relat function function defin servic cost directli identifi servic purpos term servic refer end user servic provis payphon intermedi servic network servic network compon pool cost relat compon transmiss switch network plant system cost respect network compon attribut directli servic utilis provis number servic relat function pool cost function provis servic custom bill mainten custom servic function pool cost function relat provis servic import part oper compani exampl cost includ plan personnel gener financ note seri step alloc cost pool tier approach eventu alloc cost servic step alloc perform driver step summaris step alloc function relat function network element servic step alloc relat function cost servic network element step alloc network compon servic step group servic busi defin purpos account separ alloc step illustr involv number detail step initi captur cost inform aggreg level perform alloc number direct indirect attribut prefer alloc singl arbitrari step figur typic cost alloc process gt refer film gt anticip telecommun oper sampl techniqu period activ review order alloc cost includ capit cost servic provid subsequ busi defin purpos account separ period analysi task undertaken staff custom call centr determin amount time spent staff task inform alloc directli indirectli cost staff servic provid oper oper cost section guidelin consid applic principl section oper cost includ depreci oper applic oper cost cost alloc process outlin previou section relat principl oper capit cost tabl summari alloc attribut method oper cost head depreci provis instal mainten cost network plan develop cost network manag cost market sale cost bill collect cost oper servic cost directori servic cost payment oper support cost head pure illustr intend reflect oper expect record cost intend provid high level guidanc individu oper develop cost alloc procedur specif captur record cost refin time final column tabl indic princip busi expect major oper cost question alloc gt tabl gt cost capit capit emploi articl interconnect direct requir charg interconnect cost orient includ reason return invest determin level return cost capit capit calcul set cost capit purpos set interconnect charg scope guidelin consist measur capit emploi cost capit base measur capit emploi report separ account requir interconnect direct enabl comparison actual percentag return earn oper regul activ interconnect cost capit allow nra review charg activ consist implic alloc item capit emploi focu section cost capit cost capit oper reflect opportun cost fund invest network compon relat asset convention reflect weight averag cost debt form debt held oper cost equiti measur return sharehold requir order invest network risk valu debt equiti inform determin weight averag cost capit wacc formula wacc gt num gt gt den gt gt num gt gt den gt cost equiti cost debt total equiti total interest bear debt calcul wacc individu oper total straightforward notwithstand scope discuss precis deriv input wacc formula nra applic global cost capit repres wacc regul activ oper wacc total purpos determin interconnect charg nra account risk premium appli activ reflect cost equiti financi structur wacc busi line disaggreg activ mobil cabl tv intern servic wacc capit wacc appli capit network compon relat asset order determin return recov interconnect charg easi identifi valu debt equiti oper easi constitu activ decis debt financ larg corpor decis determin number factor histor borrow facil tax plan consider debt posit corpor relat specif fund requir individu activ altern approach determin capit regul activ interconnect requir approach provid balanc sheet ident sharehold fund equiti debt net asset exclud debt capit valu regul activ determin apport net asset capit emploi apportion carri causal basi current valuat methodolog capit emploi tabl summari alloc method item capit emploi indic princip busi expect major item alloc applic method determin capit valu regul activ includ interconnect tabl intend exhaust list item classifi capit emploi method alloc activ gt tabl gt price set purpos nra oper concern averag capit emploi period capit emploi singl point time financi year end snap shot point time repres averag level capit emploi oper specif work capit balanc singl point time repres averag work capit requir extend period separ account oper show averag capit emploi year end balanc section consist treatment work capit tabl propos approach treatment work capit calcul capit emploi approach equal valid practic principl appli treatment individu item work capit purpos separ account consist treatment asset cost revenu inclus exclus individu item principl impact wacc effect decis includ exclud item adjust wacc offset term effect absolut return requir oper revenu section set principl alloc attribut cost revenu product servic offer oper section applic principl revenu consid revenu core telephoni activ expect revenu provis core telephoni product servic directli alloc product servic relat base account record bill system inform case direct alloc base account record bill system data revenu attribut basi causat alloc revenu core telephoni servic local access network core network retail fix telephon network summaris connect charg charg establish connect fix telephon network establish point interconnect interconnect charg assign retail custom line rental charg line rental charg assign retail revenu leas line revenu leas line alloc retail revenu line rental oper provid market player revenu line rental unbundl local loop assign local access network access deficit contribut member state oper access deficit scheme access deficit contribut alloc local access network univers servic contribut member state oper scheme financ univers servic oblig contribut oper alloc retail addit explanatori note account demonstr discrimin contribut charg oper charg implicitli intern interconnect charg interconnect charg includ cost establish point interconnect volum relat charg alloc core network call charg revenu call charg alloc servic retail busi equip rental sale revenu rental sale equip telephon facsimil machin alloc servic activ revenu advertis directori revenu receiv advertis directori alloc directori servic account activ engin servic consult revenu engin servic consult interconnect alloc activ revenu oper gener incom telephoni servic accord principl causat alloc activ relat revenu let part properti core telephoni busi revenu treat number wai option includ treat revenu revenu busi let accommod record revenu activ approach necessarili import revenu core activ cost treat consist failur lead profit busi underst profit overst incom fix asset invest incom fix asset invest alloc invest relat approach adopt section alloc pure financi invest invest unrel activ incom invest alloc activ incom fix asset invest alloc local access network core network retail relat invest alloc incom short term invest principl appli incom receiv short term invest incom alloc busi invest alloc report requir section guidelin set inform oper prepar purpos account separ extent publish suggest account separ account local access network core network retail activ oper prepar inform relat activ summaris singl set account inform prepar set account profit loss statement balanc sheet inform form consist measur capit emploi price set purpos oper retail activ includ regul unregul activ separ account regul activ prepar nra determin retail activ separ account prepar take account transpar requir nation commun law requir oper reveal detail financi inform unregul activ requir reveal statutori report purpos inform regard commerci confidenti inform relat activ shown total report retail activ content report suggest profit loss account balanc sheet core network purpos account separ shown figur end section suggest format local access network retail activ shown figur account make explicit transfer charg busi charg paid oper retail activ interconnect servic shown cost retail account revenu item core network account account make explicit differ cost alloc activ oper cost nra allow purpos determin charg provid transpar extent cost exclud nra charg purpos reason exclus basi prepar separ account prepar current cost basi appendix guidanc applic current cost account concept audit requir set articl interconnect direct separ account prepar oper subject independ audit accord relev rule nation legisl inform inform prepar part account separ statement account polici prepar account reconcili separ account statutori account oper matrix summaris total transfer charg account matrix make explicit total charg core network retail input reconcili separ account statutori account statement describ basi unattribut cost alloc account inform cost alloc methodolog emploi order prepar separ account level detail make clear relationship cost interconnect charg statement show averag cost network compon member state oper scheme financ univers servic oblig explanatori note demonstr discrimin charg level oper levi implicitli intern format inform present oper determin consult nra interconnect direct requir oper provid interconnect oper term condit provid servic intern subsidiari partner purpos oper provid inform nra demonstr undu discrimin provis servic intern provid extern nra inform provid process inform valid public inform public inform requir interconnect direct serv number purpos includ make transpar relationship interconnect charg cost transpar interconnect charg paid oper retail activ assur undu discrimin intern extern provis interconnect servic help establish confid interconnect regim nra encourag public inform inform proven commerci confidenti publish inevit cost alloc method oper oper histor requir prepar separ account nra extent inform publish year adopt interconnect direct cost alloc methodolog emploi oper publish immedi figur suggest report format core network busi gt start graphic gt gt end graphic gt figur suggest report format local access network busi gt start graphic gt gt end graphic gt figur suggest report format retail busi gt start graphic gt gt end graphic gt figur suggest report format activ gt start graphic gt gt end graphic gt appendix current cost account calcul current cost asset valu kei element current cost methodolog valuat asset asset valu consider decis rule net replac cost net replac cost cost replac asset asset similar characterist ag kei element formula calcul replac cost asset replac cost simpli cost todai replac asset ident technolog chang rapidli exist asset longer replac longer manufactur case calcul modern equival asset mea asset level capac function exist asset issu relat calcul mea valu telecommun oper consid depriv depriv dv repres recover asset organis higher econom asset gener net realis nrv asset sold econom econom ev measur asset base net present futur cash flow valuat rule summaris ev gt nrv compani asset current nrv gt ev compani sell asset proce sale exce econom expect gener continu depriv recover amount asset higher ev nrv current cost lower depriv net replac cost lower amount compani recov asset cost compani replac asset ident modern equival asset valuat issu adopt cca methodolog telecommun complic rate technolog chang industri implic identifi suitabl replac cost technolog asset ensur asset exhibit level function capabl exampl technolog issu telecommun oper includ copper versu fibr cabl analogu versu digit switch pdh transmiss technolog versu sdh technolog technolog superior technolog term function effici mea valu requir reflect asset equival capac function make adjust current purchas price relat oper cost asset requir mainten current cost account adjust altern approach cca approach differ approach capit mainten manner capit compani view determin profit capit view oper term compani capac produc good servic financi term sharehold equiti interest oper capit mainten financi capit mainten concept oper capit mainten ocm consid oper capabl compani propon ocm assert capit mainten approach requir compani oper capabl product capac end period begin financi capit mainten fcm consid financi capit compani maintain current price term capit assum maintain sharehold fund end period maintain real term level begin period main adjust ocm set concept concern mainten product capac oper signif adjust relat revalu fix asset current cost due revalu addit adjust requir restat depreci amount identifi revalu fix asset ocm gross book asset revalu account specif price price asset technolog calcul current cost asset appli specif price indic exist gross book asset deriv compani procur depart altern modern equival asset mea valuat method base asset current cost modern equival asset subject cost abat abat discuss supplementari depreci depreci charg year calcul basi asset valuat ensur current cost fix asset consum year charg revenu asset group asset ocm depreci charg assum straight line depreci deriv divid gross replac cost asset life supplementari depreci differ histor cost depreci current cost depreci charg posit neg depend asset rise fall charg profit profit loss account illustr concept tabl illustr concept asset purchas ecu assum life asset year simplic assum asset depreci straight line basi tabl assum cost replac asset fall annum tabl hand assum cost replac increas annum gt tabl gt gt tabl gt deriv explan current cost gross replac cost asset current cost depreci deriv gross replac cost divid asset life histor cost depreci origin acquisit cost divid asset life supplementari depreci addit depreci charg result revalu asset deriv current cost depreci histor cost depreci cumul depreci sum cumul current cost depreci end previou period backlog depreci previou period current cost depreci current period equival requir depreci end previou current cost depreci current period requir depreci cumul depreci charg current cost asset put differ gross net replac cost asset backlog depreci differ requir depreci cumul depreci adjust financi capit mainten fcm fcm similar adjust made ocm concept revalu fix asset supplementari depreci fcm treatment term profit loss adjust account hold gain loss aris due effect asset specif inflat current cost asset effect gener inflat sharehold fund capit mainten concept discuss set main adjust requir histor cost account order deriv current cost inform ocm fcm includ reflect fact transit lraic fulli alloc histor cost basi determin interconnect charg requir asset valu market current cost current cost inform kei aspect help determin interconnect charg special attent provid choic capit mainten emploi effici oper ocm determin charg revenu requir deriv sum oper cost histor cost depreci supplementari depreci return net asset fcm revenu requir sum oper cost histor cost depreci supplementari depreci return net asset hold gain loss adjust sharehold fund requir revenu differ depend capit mainten concept ocm concept systemat incorpor insuffici excess return level allow revenu depend asset specif inflat expect lower higher gener inflat desir featur regulatori regim provid invest incent fcm prefer capit mainten concept principl extent separ account prepar individu retail activ expect diminish time provis servic competit sourc commun commiss assess criteria nation scheme cost univers servic telecommun guidelin member state oper scheme final brussel novemb natur expect chang time respons chang market requir includ oper capit cost financi econom actual investor behaviour teach cost equiti equal cost risk free debt risk premium depend underli activ financi market activ higher competit carri higher risk cost debt vari activ compani financi market cost equiti capit structur reflect balanc sheet main activ main balanc sheet activ accept assum capit structur activ context cost debt assum activ markedli balanc sheet fix asset current asset creditor exclud debt provis arthur andersen report account separ context onp guidanc applic principl treatment fix asset invest short term invest long term provis liabil taxat dividend potenti contenti area context sound account practic member state scope guidelin principl appli analog network discuss section nra requir separ set account prepar activ report prepar reduc scope activ includ activ account practic alloc unattribut cost post financi report alloc purpos price set effici term long run approach capit emploi effici oper arthur andersen report account separ context onp guidanc account adjust provid financi mainten concept subject level invest asset effici defin level revenu requir order earn reason return