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European Commission - Press release

Digital Agenda: Commission questions plans for regulating mobile termination rates in Poland and starts an in-depth review

Brussels, 7 November 2011 - The European Commission has written to the Polish telecoms regulator, UKE, to express its serious doubts about the compatibility with EU law of UKE's proposed regulation of mobile termination rates (MTRs). This is the first time the Commission decided to use its new powers under Article 7a of the Telecoms Framework Directive (see MEMO11/321) to scrutinise remedies proposed by national regulators.

MTRs are the wholesale prices which telecoms operators charge each other for connecting incoming calls to subscribers using their networks and are ultimately included in phone call prices. The Commission has questioned UKE's proposal merely to publish recommended MTRs on its website in a non-binding form, rather than to regulate MTRs through legally binding, immediately enforceable regulatory decisions. The Commission is concerned that this approach would lack predictability and legal certainty for market players, allowing significant deviations from EU regulatory principles enshrined in the 2009 Commission Recommendation on the regulatory treatment of fixed and mobile termination rates in the EU (IP/09/710 and MEMO/09/222), and would violate important procedural requirements.

The Commission believes that UKE's proposal, in the absence of a proper imposition of price control obligations, risks allowing operators to charge prices higher than the limits merely "recommended" by UKE. This could lead to disputes between operators and unnecessary regulatory costs.

Neelie Kroes, European Commission Vice-President for the Digital Agenda, said: "UKE's proposal raises concerns about compliance with the regulator's duty to promote regulatory predictability and symmetric tariffs reflecting the low costs of providing these services. I expect that UKE will cooperate closely with the Commission and with other regulators to bring about greater transparency and predictability in the Polish market for mobile termination services".

Background:

"Article 7" of the new Telecoms Framework Directive requires national telecoms regulators to notify the Commission, BEREC (the Body of European Regulators for Electronic Communications) and telecoms regulators in other EU countries, of measures they plan to introduce to solve market problems. National telecoms regulators have to take outmost account of Commissions recommendations, such as the Termination Rates Recommendation.

The Commission, in close cooperation with BEREC, will discuss with UKE the issues raised and possible amendments of the proposed measures in order to make them compliant with the EU law and to eliminate barriers within a single European market which they appear to create. An in-depth review of the notified measures will last up to 3 months. At the end of the process the Commission may issue a recommendation asking the national regulator to amend or withdraw its planned remedy.

The Commission's serious doubts on UKE`s draft measure follow the amended "Article 7 procedure" under the Framework Directive of the EU telecoms rules, which came into force in May 2011. The Article 7 procedure leaves some scope for regulators to tailor approaches for achieving effective competition in their national telecoms markets, but requires them to notify draft regulations to the Commission in order to achieve consistency across the EU. Where these concern market definitions and analyses of significant market power, the Commission can require the regulator to withdraw the measure after a two month extended consultation. Where they concern regulatory measures (as in the present case), the Commission may express its serious doubts and start an in-depth review which could last up to 3 months. During that review the Commission, BEREC and the regulator concerned should closely cooperate to identify the most appropriate and effective remedies, in the light of the objective of the EU regulatory framework, whilst taking into accounts the views of market participants and the need to ensure the development of consistent regulatory practice.

The new rules also enable the Commission to adopt further harmonisation measures in the form of recommendations or (binding) decisions if divergences in the regulatory approaches of national regulators, including remedies, persist across the EU in the longer term, for example on broadband access conditions or on mobile termination rates.

Useful Links

The Commission's letter sent to the Polish regulator will be published at

https://circabc.europa.eu/w/browse/22404314-150c-48f4-a6d1-ec51a59e12b1

Digital Agenda website:

http://ec.europa.eu/digital-agenda

Neelie Kroes' website:

http://ec.europa.eu/commission_2010-2014/kroes/

Follow Neelie Kroes on Twitter:

http://twitter.com/neeliekroeseu

Contacts :

Ryan Heath (+32 2 296 17 16); Twitter: @ECspokesRyan

Linda Cain (+32 2 299 90 19)


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