Commission questions Italian regulator's broadband services' price mechanism

The European Commission has invoked the EU review mechanism in the case of plans by the Italian telecoms regulator AGCOM to change current wholesale broadband prices, as such changes would negatively affect operators' ability to plan and decide on their prices in Italy.

More specifically, the Commission has expressed concerns that AGCOM's recent decision to set 2013 prices based on its previous market review contradicts its own announcement of October 2012 that new prices will result from the new market analysis. This is all the more unexpected given that AGCOM has been consulting in parallel the results of its new market review which it launched already in September 2012. As access prices should reflect most recent available cost information, the Commission believes that AGCOM should have set the prices on the basis of its more recent and reliable full market analysis. The Commission, in close cooperation with BEREC will, over the next three months, discuss with AGCOM how to amend its proposal.

The Commission is determined to ensure regulatory approaches that are transparent and able to provide predictability and stable planning conditions for market players. Indeed, if operators cannot plan ahead on the prices they will offer their customers, they could see their business seriously hampered. In particular, given AGCOM's own announced course of action, all market players in Italy had expected that any modifications in the wholesale access prices for 2013 would only be based on a full review of broadband markets based on up-to-date market information.

European Commission Vice President for the Digital Agenda Neelie Kroes said: "In departing from the approach announced last year for setting access prices in the Italian broadband markets, AGCOM undermines the required regulatory certainty for all market players. Regulation must aim at creating a level playing field for all operators."

Background

'Article 7' of the new Telecoms Framework Directive requires national telecoms regulators to notify the Commission, BEREC (the Body of European Regulators for Electronic Communications) and telecoms regulators in other EU countries, of measures that they plan to introduce to address the lack of effective competition in the markets in question.

Under the new powers of Article 7a of the Framework Directive, the Commission can adopt further harmonisation measures in the form of recommendations or (binding) decisions, if divergences in the regulatory approaches of national regulators, including remedies, persist across the EU in the longer term.

Wholesale broadband access services (so-called local loop unbundling and Bitstream access) affected by the proposal allow alternative operators to use a part of a dominant company's (in this case Telecom Italia's) network to provide retail services to end users.

The Commission's letter sent to the Italian regulator will be published here.

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