EU Commission expects Finland to apply much stricter regulation to the wholesale broadband markets
The European Commission has, on 18 October, issued a recommendation concerning obligations imposed on telecoms operators on the wholesale local loop and broadband markets. The recommendation follows the so called second phase investigation and negotiations between FICORA, the European Commission and BEREC, the Body of European Telecoms Regulators. The investigation concerned FICORA's draft SMP decisions and the proposed obligations to remove competitive problems in the wholesale market. In its recommendation the Commission holds to the viewpoint that FICORA's proposed obligations to operators are not sufficient.
According to the recommendation, FICORA should either amend or withdraw its proposals. FICORA would have to impose cost-oriented price caps for metallic local loops on all SMP operators. The price level could be specified later on the basis of a relevant costing methodology. The obligation for cost-oriented pricing should also be extended to optical-fibre local loops, unless FICORA can prove that there is a significant competitive constraint at retail level.
The Commission also recommends price regulation for the wholesale broadband access services with a speed of at least 8 Mbit/s and to impose obligations for the wholesale broadband access services below 8 Mbit/s.
"FICORA will now thoroughly analyse the contents of the recommendation from the Commission. Then FICORA will make the necessary amendments to obligations when they are possible and reasoned by virtue of the Finnish legislation. The recommendation has special emphasis because the other national regulatory authorities have supported the Commission's opinion. On the other hand, FICORA has the best knowledge to assess the situation and competition problems in Finland", says Asta Sihvonen-Punkka, Director-General of FICORA.
Within one month from this recommendation, FICORA must issue the final decisions on significant market power. If there are major changes to the imposed obligations FICORA will consult the players before issuing the decisions. FICORA has complied with the directive and notified the Commission of the draft decisions concerning telecoms operators that are relevant to the internal market. FICORA states that there are eight of these.
The European Commission press release is available on the Commission website.
Asta Sihvonen-Punkka, Director-General, tel. +358 50 573 9053
Jukka-Pekka Juutinen, Communications Market Specialist, tel. +358 9 6966 433, +358 40 359 1091
Jenni Koskinen, Communications Market Specialist, tel. +358 9 6966 250, +358 40 766 5250
A local loop means a part of a telecommunications network used for providing broadband subscriptions from the telecoms operator's network exchange to end-customers. When a service company, which has sold the subscription, carries out activities outside its own operating area, it must lease part of a local loop from the operating area's telecoms operator. The sound pricing of the local loop market is a prerequisite for telecoms operators to be able to compete in each other's operating areas and thus be able to provide inexpensive broadband services to consumers. For the purpose of using the local loop, telecoms operators have active devices that steer and manage data transfer in the physical local loop. A wholesale broadband product consists of a local loop and the steering and management of data transfer. When a service company, which has sold the subscription, operates outside its operating area, it leases a wholesale broadband product consisting of a local loop and the steering and management of data transfer. Thus a service company may offer broadband services without it having to bring its own active devices for the steering and management of data transfer.