EC suspends CMT’s proposals on wholesale broadband pricing

1 Jul 2013

The European Commission (EC) has announced the suspension of a proposal from Spanish telecoms regulator Comision del Mercado de las Telecomunicacinoes (CMT) in which the latter sought to set the prices which fixed line incumbent Telefonica Espana could charge alternative telcos for broadband services offered over its network. In announcing the development, the EC said that it was concerned the Spanish watchdog’s approach might not be compatible with European Union (EU) telecoms rules, while it also suggested that the proposals could be ‘detrimental to competition and would not incentivise investment in broadband’. Further, the Commission highlighted concerns that the regulated prices had not been set in a transparent manner, arguing that the proposal could create artificial barriers in the market.

As per the proposals, the CMT had said it planned to set the regulated prices ‘with reference to a cost model in combination with Telefonica’s accounting data and benchmark among Member States’. However, the EC said that this resulted in the proposed regulated prices being up to 50% above cost-efficient levels, while it also noted that the wholesale broadband access product is currently the only regulated offer on Telefonica’s fibre network.

In response to the proposals the EC has now sent a ‘serious doubts’ letter to the CMT, giving the regulator three months to liaise with both the Commission and the Body of European Regulators for Electronic Communications (BEREC) to reach a more agreeable solution.