Brussels, 14 October 2013
European Commission urges Estonian regulator to withdraw broadband wholesale fees proposal
The European Commission has requested the Estonian telecoms regulator (ECA) to withdraw its proposal for calculating regulated fees which the dominant operator, Elion Ettevoted AS, can charge other operators to use its broadband infrastructure.
The Commission's request follows a three month investigation, during which BEREC, the body of European Telecoms Regulators, expressed its support for the Commission's serious doubts. The Commission therefore requires the Estonian regulator to withdraw its proposal in order to bring it in line with the approach recommended by the Commission. Should ECA fail to follow the Commission's recommendation, the Commission will consider any appropriate legal steps.
ECA failed to provide evidence with the level of detail required by both the Commission and BEREC during the investigation, which began last July (see IP/13/539), as to why its proposal would comply with EU law including its principles and policy objectives such as to promote competition and efficient investments in NGA networks in Estonia.
ECA has not demonstrated that valuing the assets at their initial historical cost rather than their current cost can achieve price stability in the Estonian markets, or whether ECA’s proposed measure will help Estonia sustain the objectives of the Digital Agenda for Europe in terms of speed, coverage and penetration.
European Commission Vice President Neelie Kroes said: "Price stability within each Member State and price consistency across the EU are key to set the right conditions for competition, innovation and investment in the telecoms sector. There is flexibility about national circumstances built into the system, but we must also ensure further regulatory coherence to promote a single market for telecommunications".
Any new measure should also take account of the recently approved 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) which provides regulators with clear guidance as to the costs calculation to follow when setting regulated access prices.
This is the eighth 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 Estonian regulator will be published at:
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