Brussels, 18 October 2012
Digital Agenda: Commission asks Finnish telecoms regulator to improve access conditions to fibre network
The European Commission has called on the Finnish telecoms regulator (FICORA) to amend or withdraw its proposal on regulated access to dominant operators' broadband networks. If implemented, FICORA's plans would damage competition and hamper investment in competitive broadband services. This could limit current and future offers available to consumers and businesses. This is the third time that the Commission has issued a formal recommendation under Article 7a of the Telecoms Directive (MEMO/11/321).
European Commission Vice President Neelie Kroes said: "Regulators have to ensure stable and predictable prices for broadband, but also introduce effective safeguards against discrimination, so that dominant operators do not get an unfair advantage. FICORA's proposal is lacking both. I want FICORA to make a proposal which creates a transparent and predictable regulatory environment for Finnish broadband and which encourages investment and competition"
FICORA's proposal concerns wholesale broadband services, through which alternative operators can offer internet services to their own customers. FICORA wants to regulate two types of such access: "wholesale broadband access" which is granted at a higher network level and "network infrastructure access" (also known as "unbundling") which allows the alternative operator to use a greater part of its own network.
The Commission is concerned that FICORA's proposal, does not use important regulatory tools, such as effective non-discrimination and price obligations. The Commission considers that in the short term, workable cost-based regulation for copper-based access products seems inevitable in order to ensure proper functioning of broadband markets in Finland where dominant operators are in a position to charge excessive prices. Also the Commission recommends FICORA impose appropriate specific regulatory obligations for wholesale broadband access services below 8 Mb per second.
However, the Commission suggests that FICORA would no longer be required to price-regulate new generation fibre networks based on cost-orientation if the regulator applied strengthened non-discrimination rules and proved that a significant competitive constraint from regulated copper access prices and/or other well developed alternative infrastructures like cable or LTE (Long term evolution, a standard for wireless communication of high-speed data) could provide sufficient competitive safeguards. The Commission has therefore issued recommendations which would make broadband regulation in Finland compliant with EU telecoms rules.
The Commission's Recommendation follows a three month investigation during which BEREC, the body of European Telecoms Regulators, expressed support for the Commission's position. The Recommendation requires FICORA to either withdraw or amend its initial draft regulatory measures. The extended investigation into FICORA's proposal began in June when the Commission addressed a serious doubts letter to FICORA (see IP/12/623).
EU telecoms rules require Member States to promote competition and the interests of consumers in the EU, as well as the development of the Single Market.
Article 7 of the Telecoms Framework Directive requires national telecoms regulators to notify the Commission, the Body of European Regulators for Electronic Communications (BEREC) and telecoms regulators in other EU countries, of the measures they plan to introduce to solve market problems. The EU telecoms rules 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.
In July 2012 (SPEECH/12/552), Neelie Kroes outlined elements of a forthcoming package which will provide durable guidance for broadband access regulation until 2020. The draft proposals will be formally presented soon and will address issues including non-discrimination remedies, network access pricing and the conditions for pricing flexibility for "next generation" wholesale access products.
The Commission's letter sent to the Finnish regulator FICORA will be published at:
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