EC tells FICORA to withdraw plans to deregulate fixed termination rates

4 Dec 2013

The Finnish Communications Regulatory Authority (FICORA) has been told by the European Commission (EC) that it must withdraw its plan to deregulate the wholesale markets for fixed voice call termination. In a press release the EC confirmed that it has overruled a proposal by FICORA, under which the watchdog had set out its stall to leave fixed termination rates (FTRs) unregulated, with the European body claiming that Finland’s currently regulated rates are the highest in the European Union (EU) at EUR0.0242 per minute, compared to an average of EUR0.011 per minute in all other EU member states which follow the approach recommended by the EC.

In its veto decision the EC argued that FICORA had failed to provide sufficient evidence that the market is effectively competitive and as such would no longer warrant regulation. In order to provide such evidence, it was claimed that the Finnish regulator 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. With the Commission also saying that FICORA had not provided a thorough analysis of the competitive conditions prevailing on the market, it said it considered that the 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’. Meanwhile, it was also confirmed that the Body of European Regulators for Electronic Communications (BEREC) fully supports the EC’s position in this case.

Commenting on the matter, EC 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.’

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