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European Commission - Press release

Digital Agenda: Commission suspends Dutch proposal to raise wholesale rates for fixed & mobile telephony and starts an in-depth review

Brussels, 13 February 2012 - The European Commission has expressed serious doubts about a new proposal from the Dutch telecoms regulator (OPTA) regarding fixed and mobile termination rates which would negatively affect consumers in the Netherlands. Termination rates are the rates telecoms networks charge each other to deliver calls between networks, and each operator has market power over access to customers on its own network. These costs are ultimately included in call prices paid by consumers and businesses.

In a previous filing in 2010, OPTA proposed to apply cost-oriented fixed and mobile termination rates, in line with the Commission's 2009 Recommendation under the EU telecoms legislation. Despite this, OPTA's decision was subsequently annulled in a national Tribunal ruling, which prescribed a different methodology that includes costs not directly related to call termination. Under OPTA's new proposal based on the national Tribunal's methodology, fixed and mobile termination rights would be twice as high as under the EU approach.

European Commission Vice President Neelie Kroes said: "This case is important to lay down the roles of national authorities and courts in applying EU telecoms rules in a coordinated way that brings maximum benefit to consumers and to competition."

In the letter sent to OPTA today, the Commission explains that the new rates in this proposal do not comply with the principles and objectives of EU telecoms rules which require Member States to promote competition and the interests of consumers in the EU, as well as the development of the Single Market.

This is the first time that the Commission has used its new powers regarding national remedies under Article 7a of the Telecoms Directive (MEMO11/321) in the Netherlands. The procedure must be concluded within 3 months.

Background

In 2010 OPTA proposed termination rates which were in line with the Commission's 2009 Recommendation (see IP/09/710 and MEMO/09/222). These rates were, however, overturned in August 2011 by the Dutch Trade and Industry Appeals Tribunal following an appeal brought by certain operators. As a result, OPTA sent the Commission a new proposal based on the new costing method prescribed by the Tribunal.

The Commission has issued this serious doubts letter because OPTA's proposal would result in mobile and fixed termination rates significantly higher than those recommended in the Commission's Recommendation.

"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 that they plan to introduce to address the lack of effective competition in the markets in question.

Under the new powers of Article 7a of the Framework Directive, the Commission, in close cooperation with BEREC will, over the next three months discuss with OPTA how to amend its proposal in order to make it compliant with EU law. In the meantime, implementation of the proposal is suspended.

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.

Useful Links

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

https://circabc.europa.eu/w/browse/0fc4cbf9-3412-45fe-84bb-e6d7ba2f010e

Digital Agenda website

Neelie Kroes' website

Follow Neelie Kroes on Twitter

Contacts :

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

Linda Cain (+32 2 299 90 19)


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