Brussels, 28 October 2013
European Commission urges Spanish regulator to amend or withdraw wholesale broadband access fees proposal
The European Commission has formally asked the Spanish telecoms regulator (CNMC) to withdraw or amend its proposal setting the regulated prices which the dominant operator, Telefónica, can charge other operators who want to sell broadband services based on Telefónica's network.
The Commission first warned CMT (the predecessor of the current CNMC) in June (see IP/13/621) that its plan may not be compatible with EU telecoms rules, could be detrimental to competition and would not incentivize investment in high speed broadband. In particular the Commission is concerned that the Spanish regulator´s proposed price setting model would lead to regulated prices up to 50% above cost-efficient levels. Moreover, the wholesale broadband access product is the only regulated offer on Telefonica's fibre network and the Spanish regulator does not plan to impose other competition safeguards such as stricter non-discrimination rules.
At the end of a three month in-depth investigation, the Commission has concluded that CNMC´s measure still lacks transparency and contains an element of arbitrariness, as CNMC failed to justify in detail the price levels set. BEREC, the body of European Telecoms Regulators, has also expressed support for majority of the Commission's concerns.
The Commission now requires the Spanish regulator to withdraw or amend its proposal in order to bring it in line with EU telecoms rules. Should CNMC fail to follow the Commission's recommendation, the Commission will consider any appropriate legal steps.
European Commission Vice President Neelie Kroes said: "Price stability and transparency of price-setting mechanisms within each Member State are indispensable to set the right conditions for competition and investment in the telecoms sector. Despite variations in national circumstances, we must also ensure further regulatory coherence to promote a single market for telecommunications".
Any new measure should also take account of the Commission's Recommendation on non-discrimination and costing methodologies to promote competition and enhance the broadband investment environment (see IP/13/828 and MEMO/13/779). This provides regulators with clear guidance as to the costs calculation to follow when setting regulated access prices.
This is the ninth time that the Commission has issued a recommendation under Article 7a of the Telecoms Directive (MEMO/10/226).
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.
Where the Commission has concerns as to the compatibility of the proposed regulatory obligations with EU law, it can open an in-depth, or so-called Phase II, investigation, under the powers of Article 7a of the Framework Directive. It then has three months to discuss with the relevant regulator, in close cooperation with BEREC, how to amend its proposal in order to make it compliant with EU law. If, at the end of this investigation, divergences in the regulatory approaches of national regulators for remedies persist, the Commission may adopt further harmonisation measures, in which the Commission can require the national regulator in question to amend or withdraw its proposed measure.
The Commission's letter sent to the Spanish regulator will be published at:
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