The French telecoms regulator Arcep is cutting fixed termination rates from 1 October 2011, having secured clearance from the European Commission (EC) and Competition Authority. Under the plan, fixed termination rates will drop to 0.30 euro cents per minute, and then again to 0.15 cents per minute in July 2012, before falling to 0.08 cents in January 2013. The regulator’s new rates are based on the Long-Run Average Incremental Cost (LRAIC) model and, as part of the revamp of prices, will bring incumbent operator France Telecom (FT’s) tariffs for premium calls services into line with rival altnets. Arcep’s rule change effectively bars FT from charging too much for premium call services. Under the new tariffs the telco’s rates will be capped at 0.43, 0.415 and 0.40 euro cents per minute respectively for 2012, 2013 and 2014. Arcep’s new rules also simplify the country’s interconnection regime vis a vis FT’s handling of voice-over-internet protocol numbers, as well as for the operator’s wholesale line rental offer, dubbed VGAST.