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European Commission

Press release

Brussels, 1 March 2013

Digital Agenda: Commission insists German operators should not be allowed special treatment on mobile rates

The European Commission has halted plans of the German telecoms regulator (BNetzA) which could result in mobile termination rates (MTR) more than 80% higher than in many other Member States. This could mean that German consumers pay unjustifiably high prices for their mobile calls. 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.

As part of its proposal, BNetzA has opted not to follow the method for calculating MTRs set out in the Commission's 2009 Recommendation on Termination Rates (see IP/09/710 and MEMO/09/222) as part of EU telecoms legislation. In addition to German consumers paying considerably over the odds, there is the risk that consumers in countries, such as Portugal, Italy, Spain and Greece, could end-up cross-subsidising German mobile operators.

European Commission Vice President Neelie Kroes said: "The vast majority of Member States play ball and are now applying EU telecoms rules in a coordinated way that brings maximum benefit to consumers and to competition. German operators should not be given special treatment."

In the letter sent to BNetzA today, the Commission explains that the new rates in the regulator's 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 a further example of the Commission using its powers regarding national remedies under Article 7a of the Telecoms Directive (MEMO11/321). BNetzA now has three months to work with the Commission and the body of European telecoms regulators (BEREC) on a solution to this case.

Background

At the end of January 2013 the Commission received BNetzA's proposal regarding its plans to regulate mobile termination markets in Germany. This included a price control method determining how to calculate MTRs which would allow operators in Germany to charge significantly higher rates than other operators in the vast majority of Member States. The Commission has issued this serious doubts letter because BNetzA's alternative would lead to MTRs around 80% higher than in those Member States which comply with the Commission's Recommendation. The Commission considers that BNetzA has failed to adequately take into account the interests of consumers and has also proposed a way forward, which is detrimental to establishing a single market for telecoms.

"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 powers of Article 7a of the Framework Directive, over the next three months the Commission, in close cooperation with BEREC, will discuss with BNetzA 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 German regulator will be published at:

https://circabc.europa.eu

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: @RyanHeathEU

Linda Cain (+32 2 299 90 19)


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