European Commission Warns Germany over Mobile Termination Rates
*The European Commission, in a letter made public today, has requested the German telecoms regulator, BNetzA to notify it of all German mobile operators' termination rates, the wholesale tariffs charged by the operator of a customer receiving a phone call to the operator of the caller's network.
The Commission says that it considers mobile termination rates to be relatively high in Germany compared to several other Member States.
The Commission underlines that these rates need to be notified to it under the EU telecoms rules ("Article 7 procedure"), which aims to ensure more coherent and transparent termination rates across Europe, thereby avoiding distortions of competition between operators from different Member States. BNetzA has failed twice, in 2006 and now again, to include these rates in its analysis of the market for wholesale mobile call termination. In its letter, the Commission therefore alerts BNetzA that in case it continues to fail to comply with this obligation, the Commission, as guardian of the Treaties, will consider opening an infringement proceeding for non-compliance with EU legislation.
"I strongly advise Bundesnetzagentur to notify the termination rates of the German mobile operators to the Commission without any further delay", said EU Telecoms Commissioner Viviane Reding. "Mobile termination rates represent a key part of the price remedy and play a key role in ensuring effective competition in the EU telecoms market. Germany cannot be granted an exemption from what is required under the EU telecoms rules and what is common practice in other Member States. The German regulator should follow the examples of other national telecoms regulators which do not only notify their cost control remedies in detail, but in some cases, such as in Italy, even promptly take the necessary regulatory measures to bring down termination rates to more competitive levels following concerns by the Commission."
Competition Commissioner Neelie Kroes added: "Lower mobile termination rates have a positive impact on consumers' phone bills and on competition between mobile phone companies. It is therefore necessary that regulators bring the current high termination rates down to levels which reflect the real costs. It is equally important that the regulatory process is transparent for all stakeholders and that operators can quickly adapt their strategies on the market to the new regulatory requirements. I regret that Germany does not seem to apply a regulatory policy which is compatible with these principles."
In its letter the Commission has rejected a justification provided by BNetzA for not including the actual mobile termination rates in its notified draft regulatory measure. In BNetzA's view, the rates do not need to be notified to the Commission under Article 7 of the Framework Directive. The Commission has on many occasions expressed its view that the setting of the level of mobile termination rates has a clear cross-border effect and must be notified under the EU telecoms rules. Generally, other regulators notify all elements of price remedies, as part of their market analyses.
This is why the Commission will consider opening infringement proceedings against Germany if BNetzA continues to refuse the notification of mobile termination rates in Germany.
The regulatory measure proposed by BNetzA determines mobile termination rates with a special authorisation procedure under which the mobile operators active on the German retail market ask the regulator for approval of their rates. BNetzA argues that – due to the short deadline (10 weeks) for such authorisation procedure – it is not possible to proceed with a notification to the Commission. However, in the Commission's view national procedures cannot justify non-compliance with the "Article 7 procedure".
DXL - Consumer
*The European Commission, in a letter made public today, has requested the German telecoms regulator, BNetzA to notify it of all German mobile operators' termination rates, the wholesale tariffs charged by the operator of a customer receiving a phone call to the operator of the caller's network.
The Commission says that it considers mobile termination rates to be relatively high in Germany compared to several other Member States.
The Commission underlines that these rates need to be notified to it under the EU telecoms rules ("Article 7 procedure"), which aims to ensure more coherent and transparent termination rates across Europe, thereby avoiding distortions of competition between operators from different Member States. BNetzA has failed twice, in 2006 and now again, to include these rates in its analysis of the market for wholesale mobile call termination. In its letter, the Commission therefore alerts BNetzA that in case it continues to fail to comply with this obligation, the Commission, as guardian of the Treaties, will consider opening an infringement proceeding for non-compliance with EU legislation.
"I strongly advise Bundesnetzagentur to notify the termination rates of the German mobile operators to the Commission without any further delay", said EU Telecoms Commissioner Viviane Reding. "Mobile termination rates represent a key part of the price remedy and play a key role in ensuring effective competition in the EU telecoms market. Germany cannot be granted an exemption from what is required under the EU telecoms rules and what is common practice in other Member States. The German regulator should follow the examples of other national telecoms regulators which do not only notify their cost control remedies in detail, but in some cases, such as in Italy, even promptly take the necessary regulatory measures to bring down termination rates to more competitive levels following concerns by the Commission."
Competition Commissioner Neelie Kroes added: "Lower mobile termination rates have a positive impact on consumers' phone bills and on competition between mobile phone companies. It is therefore necessary that regulators bring the current high termination rates down to levels which reflect the real costs. It is equally important that the regulatory process is transparent for all stakeholders and that operators can quickly adapt their strategies on the market to the new regulatory requirements. I regret that Germany does not seem to apply a regulatory policy which is compatible with these principles."
In its letter the Commission has rejected a justification provided by BNetzA for not including the actual mobile termination rates in its notified draft regulatory measure. In BNetzA's view, the rates do not need to be notified to the Commission under Article 7 of the Framework Directive. The Commission has on many occasions expressed its view that the setting of the level of mobile termination rates has a clear cross-border effect and must be notified under the EU telecoms rules. Generally, other regulators notify all elements of price remedies, as part of their market analyses.
This is why the Commission will consider opening infringement proceedings against Germany if BNetzA continues to refuse the notification of mobile termination rates in Germany.
The regulatory measure proposed by BNetzA determines mobile termination rates with a special authorisation procedure under which the mobile operators active on the German retail market ask the regulator for approval of their rates. BNetzA argues that – due to the short deadline (10 weeks) for such authorisation procedure – it is not possible to proceed with a notification to the Commission. However, in the Commission's view national procedures cannot justify non-compliance with the "Article 7 procedure".
DXL - Consumer