Independent telecoms companies have condemned a draft recommendation from the European Commission on charges that incumbent telecoms companies can levy for access to their lines.
The proposal, which is to be considered by the European committee of national telecoms regulators, Berec, at a meeting today (6 December), meets the demands of the incumbents that they should be allowed to charge more for access to their lines for the provision of broadband services.
They say that higher charges are justified to fund investment in fibre networks. The competitor telecoms companies complain that the proposal does not exact any guarantee that any such investment will be made.
They argue that a better incentive to investment is competition, but that competition will be squeezed out by the higher prices. They warn that the incumbents could, while levying higher charges, content themselves with upgrading copper lines, whose capacity and speeds will not meet the Commission’s aspirations for the next generation of very high-speed internet access.
Miroslaw Godlewski, chief executive of the Polish company Netia, warned of “the re-monopolisation of the market in Poland”. He said that the proposal, which would nearly double access charges in Poland, was “bad news for consumers and for competition in central and eastern European countries”.
The draft puts flesh on an outline given by Neelie Kroes, the European commissioner for the digital agenda, on 12 July. She said then that “more predictable returns on investment are essential”.
Her proposal offers the competing operators the prospect of tougher rules to prevent the incumbents discriminating against them over access. But she is giving national regulators greater flexibility over how they police price regulation.
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Her argument is that the price for access to copper networks should not be driven down too far.
A Commission source said: “We support stability in real terms for the cost-oriented pricing of copper.”
Maximo Ibarra of the Italian company Wind Telecomunicazioni said that the copper price should come down “in order to rebalance the existing situation and to mitigate the risk of a structural competitive squeeze”.
The draft recommendation says that: “National regulatory authorities should ensure that the recommended methodology is implemented no later than [31 December 2016]…the Commission expects the average of the present outcomes of the recommended methodology for the monthly rental access price of the full unbundled copper local loop in the EU to fall within a band of prices between [€8 and €10].”
The European Competitive Telecommunication Association, a trade association for the new entrant telecoms companies, says that this would mean price rises in most member states. Its chairman, Tom Ruhan, accused Kroes of taking on the role of a pan-European telecoms regulator.
“This is a normal incentive for normal economic behaviour,” a Commission source said of the pricing proposal. “In any other business, obligatory cost-oriented access to a key input offered on exact equivalent terms would not be considered as ‘just consolidating the position of incumbents’.”