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Digital Agenda: - Commission suspends the Czech regulator’s proposal on remedies in the fixed termination markets

European Commission - IP/13/894   30/09/2013

Other available languages: FR DE CS

European Commission

Press release

Brussels, 30 September 2013

Digital Agenda: - Commission suspends the Czech regulator’s proposal on remedies in the fixed termination markets

The European Commission has suspended a proposal from the Czech telecoms regulator (ČTÚ) concerning regulatory remedies for the fixed termination markets as it has serious concerns on the scope of the proposed access obligation with regard to alternative network operators.

In its proposal, ČTÚ imposes a new price regulation on fixed alternative operators, but without imposing on them a corresponding access obligation. The Commission is particularly worried that these operators might then be able to circumvent the price regulation by refusing to provide access to their competitors. That could lead to consumers being prevented from making calls to the networks of alternative operators.

Neelie Kroes, European Commission Vice-President for the Digital Agenda, said: "Consumers should not find themselves at risk of being unable to make calls where they wish. That is why, where we have a monopoly situation like in fixed termination markets, we need to guarantee access to the networks for all operators, alternative operators included."

Under the EU telecom rules, the access obligation requires an operator to interconnect its network with that of any other operator. ČTÚ's proposal suggests that only the incumbent will face such an obligation, but not the alternative network operators. However, all operators have been found to hold significant market power in their respective markets.

The Czech regulator now has three months to work with the European Commission and the Body of European telecoms regulators (BEREC) to find a solution to this case. In the meantime, implementation of the proposal is suspended.

Background

On 29 August 2013, the Commission registered a notification from the Czech national regulatory authority (ČTÚ), concerning the markets for call termination on individual public telephone networks provided at a fixed location in the Czech Republic.

The Commission’s decision to open an in-depth investigation begins a so-called “second phase” procedure under article 7a of the EU Telecoms Directive (MEMO/11/321).

Regulatory remedies suggested by ČTÚ on alternative network operators include a new obligation of price control, and maintain the obligations of transparency and non-discrimination, but without mandating an access obligation. These remedies attempt to address several market failures, such as the imposition of excessive rates in a market in which each fixed operator has a monopoly position. Fixed termination rates are fees which fixed operators charge to deliver calls from other fixed or mobile networks.

Article 7 of the 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.

The 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.

Useful Links

The Commission's letter sent to the Czech regulator will be published on

https://circabc.europa.eu/

Digital Agenda website

Neelie Kroes' website

Follow Neelie Kroes on Twitter

Contacts

Email: comm-kroes@ec.europa.eu Tel: +32.229.57361 Twitter: @RyanHeathEU


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