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IP/09/1008

Brussels, 25 June 2009

Telecoms: Commission takes legal action against Germany for circumventing the EU transparency mechanism when regulating mobile termination markets

The Commission today opened an infringement procedure against Germany because the country's national regulator the Bundesnetzagentur did not consult the Commission and other national regulators prior to deciding on new levels of mobile termination rates. Termination rates are wholesale fees charged by operators to connect calls from one network to another operator's network. Contrary to Germany's obligations under EU telecoms rules, the Bundesnetzagentur's final decisions on mobile termination rates were adopted on 31 March 2009 before the Commission and other national regulators had the possibility to comment on the level of these rates. This lack of transparency is a first in the application of EU telecoms rules in the 27 EU Member States. Without prior consultation of other regulators, there is an increased risk that the regulatory approach to termination rates will differ among Member States and distort competition in the EU's single telecoms market. Already today, termination rates, and the methodology used to set them, vary widely across the EU. The Commission has therefore called for them to be better coordinated (see IP/09/710 ) .

“Regulatory decisions setting mobile termination rates affect operators in other Member States and thus the single market. This is why the EU telecoms rules require national regulators to consult with regulators from other Member States and the European Commission on decisions such as these,” said EU Telecoms Commissioner Viviane Reding. Unfortunately, after intensive contacts with the Commission, the German regulator took the position that the levels of mobile termination rates and the method for their calculation are exempt from EU-wide consultation. This represents not only a violation of EU law, but goes also against the spirit of a single market where close cooperation and consultation among national regulators and the Commission should help to avoid diverging regulatory approaches that could create obstacles for the single telecoms market."

On 31 March 2009, the German telecoms regulator, Bundesnetzagentur, adopted decisions setting mobile termination rates and determining the method used for their calculation. These decisions became effective on 1 April 2009. Despite being obliged to do so under the EU telecoms rules, before adopting its final decision Bundesnetzagentur did not make these measures accessible for comments to the Commission and to other national regulators. EU telecoms rules require national regulators to contribute to the development of the internal market by cooperating with each other and with the Commission in a transparent manner in order to ensure consistent application of EU laws. This includes an obligation to notify regulatory measures to the Commission, comprising such rates.

The German government has two months to respond to the letter of formal notice which the Commission has decided to send today. If the Commission receives no reply, or if the observations presented by the German government are not satisfactory, the Commission can issue a reasoned opinion (the second stage in an infringement proceeding). If after that Germany still fails to fulfil its obligations under EU law, the Commission can refer the case to the European Court of Justice.

Termination rates are the wholesale tariffs charged by the operator of a customer receiving a phone call to a mobile phone, to the operator of the caller’s network for connecting, or “terminating”, the call. Termination rates are therefore part of the cost of a call between customers of different network operators and included in the phone bill of the calling customer. The price that users from one country have to pay for calling a number in another Member State is affected by the levels of termination rates set in the destination country. The level of termination rates also influences the ability of operators established in other Member States to provide services in that country depending on the set termination rates.

Background

The EU telecoms rule s require national regulators to inform the Commission and the regulators in other Member States of draft measures affecting trade between Member States, and provide the reasoning on which the measure is based. National regulators and the Commission may give their comments on the measures proposed.

In May 2009, the Commission adopted a Recommendation on the regulation of termination rates in the EU, setting out clear guidance for EU telecoms regulators on the cost-based method to be used when calculating termination rates ( IP/09/710 ).

A detailed overview of the telecoms infringement proceedings is available at:

http://ec.europa.eu/information_society/policy/ecomm/implementation_enforcement/infringement/


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