European Commission opposes removal of ex ante regulation in the wholesale market for call termination on fixed networks
On 2 September 2013, FICORA presented the European Commission its proposal on the removal of regulation in the wholesale market for call termination on fixed networks. In FICORA's view, there is no longer need for regulation because telecoms operators cannot set wholesale prices without taking other players and end users into consideration.
In its decision, the Commission demands that FICORA provide additional evidence for its conclusions of how wholesale price increases are passed on to the retail telephone service price level. According to FICORA's proposal, telecoms operators cannot, despite the removal of regulation, raise their wholesale prices without economic loss. When wholesale price increases are passed on to retail prices, end users can, instead of calling to the subscriptions of the telecoms operators that raised their wholesale price, switch to making calls to mobile subscriptions, for example. In this case, there is no need for ex ante regulation in the wholesale market.
As a result of the decision, the European Commission launched phase II investigation regarding the case. The investigation will last for two months and during it, a working group consisting of European regulatory authorities and FICORA will work together to resolve the matter. Ultimately, the Commission possesses a right of veto over the conclusions about the removal of ex ante regulation presented by FICORA, and a possibility to refer the matter back to FICORA.
Jukka-Pekka Juutinen, Chief, Steering group, tel. +358 295 390 523
Tuukka Lehtiniemi, Communications Market Specialist, tel. 0295 390 527
*A call made from a mobile or fixed telephone network is directed from the network determined by the caller's telecoms operator to the fixed telephone network determined by the recipient's telecoms operator. In this case, the telecoms operator whose subscriber the recipient is, charges the caller's telecoms operator for call termination on its network. The charge is called a charge for call termination on the fixed telephone network or fixed call termination charge.