Commission orders German telecoms regulator to address fixed termination rates plan

The European Commission has again requested that the German telecoms regulator (BNetzA) amend or withdraw its proposal to set fixed termination rates (FTRs) three times (300%) higher than the member states averages, which follow the recommended approach set out in EU telecoms rules. This request comes after a three-month investigation, during which the German regulator has failed to provide convincing reasons for its proposal.

Termination rates are the rates telecoms networks charge each other to deliver calls between networks and the fees are ultimately included in call prices paid by consumers and businesses. Under BNetzA's proposal, fixed termination rates would range from €0.0025/minute (off-peak) to €0.0036/minute (peak). Operators in countries which follow the EC's recommended approach pay on average €0.001/minute.

The price difference would be incurred at the expense of operators, and eventually consumers, in the Member States from where the calls originate. The Commission believes that BNetzA will create barriers to the internal market if it does not follow the recommended calculation method.

Commission Vice President Neelie Kroes said: "EU telecoms rules require Member States to promote competition, protect EU consumers' interests and further the single market. I cannot accept an approach to setting termination rates which goes against these principles and objectives.”

BEREC, the body of European Telecoms Regulators, has expressed its support for the Commission's position. The Recommendation addressed to the German regulator requires it to either withdraw its proposal or amend it in order to bring it in line with the approach recommended by the Commission. Should BNetzA fail to follow the Commission's recommendation, the Commission will consider appropriate legal steps.

EU telecoms rules require member states to promote competition and the interests of consumers in the EU, as well as the development of the single market. Article 7 of the Telecoms Framework Directive requires national telecoms regulators to notify the Commission, the Body of European Regulators for Electronic Communications (BEREC) and telecoms regulators in other EU countries, of the measures they plan to introduce to solve market problems. Where the Commission has concerns as to the compatibility of the proposals with EU law, it can open an in-depth, or so-called Phase II, investigation, under the powers of Article 7a of the Framework Directive. It then has three months to discuss with the relevant regulator, in close cooperation with BEREC, how to amend its proposal in order to make it compliant with EU law. If, at the end of this investigation, divergences in the regulatory approaches of national regulators for remedies persist, the Commission may adopt further harmonisation measures, in which the Commission can require the national regulator in question to amend or withdraw its proposed measure.

The Commission's Recommendation addressed to BNetzA is published here.

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