European Commission Rules Against Finnish Regulator on Fixed Termination Rates
Published on: 4th Dec 2013
By: Ian Mansfield
The European Commission has ruled that the Finnish telecoms regulator (FICORA) must withdraw its plans to deregulate the wholesale markets for fixed voice call termination in Finland.
Finland's currently regulated fixed termination rates (FTRs) are the highest in the EU at 2.42 €-cents/min, compared to an average of 0.11 €-cents/min in all other EU member states which follow the approach recommended by the European Commission.
The Commission says that it has therefore overruled FICORA's proposal to leave unregulated the rates, which Finnish operators charge other operators for connecting calls to customers on their respective fixed networks.
In its veto decision, the European Commission considers that FICORA has failed to provide sufficient evidence that the market is effectively competitive and would therefore no longer warrant regulation. In order to provide such evidence, FICORA should have demonstrated that it would not be profitable for operators providing termination services to raise FTRs, for example if this would cause consumers to substitute their fixed connections for mobile ones. The Commission considers therefore that FICORA has not provided a thorough analysis of the competitive conditions prevailing on the market. .
In the absence of such evidence, the Commission considers that FICORA's draft measure is not compatible with the principles and objectives of the EU telecoms rules which require Member States to promote competition, EU consumers' interests, and the development of the Single Market. The Body of European Regulators for Electronic Communications (BEREC) fully supports the Commission's position in this case.
European Commission Vice President Neelie Kroes stated: "I cannot allow regulation to be lifted from a market where each operator has a monopoly and where fixed termination tariffs are up to 60 times higher than in elsewhere in Europe Excessive pricing means unjustifiable expense for operators and for consumers in Finland, and in countries which do regulate fixed termination charges. Such an approach puts at risk the single telecommunications market."