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Europe is to take legal action against Euro zone countries that have failed to make any headway towards unbundling local telephone loops.

European telecoms commissioner, Erkki Liikanen, said that while he was in a position to start legal proceedings now, he has decided to wait until a report on the matter is published in October.

He said pursuing any legal action would be a distraction. He added that national teleoms regulators, such as the UK's Oftel, were " working hard to ensure implementation and resolve disputes".

Newswire AFX reports that Liikanen said: "...we do not underestimate the ability of the incumbent operators to drag their feet as much as possible in order to postpone competition."

So far, Liikanen has received one complaint about the slow implementation of local loop unbundling (LLU) but refuses to say who has been fingered.

It's understood that 500,000 telephone lines have been unbundled in Europe so far.

BT declined to say how many local loops had been unbundled so far in the UK.

However, a spokeswoman for BT was confident the UK would not be subject to any legal challenge.

"We have met all the deadlines - even bettered them," she said. ®

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