EC launches investigation over FICORA’s proposed MTR regulation

1 Apr 2015

An in-depth investigation over proposals made by FICORA, the Finnish telecoms regulator, for new rules on mobile termination rates (MTRs) has been launched by the European Commission (EC). Confirming the development in a press release, the European body claimed: ‘If adopted, the new rates in Finland would not be based on costs as would be incurred by an efficient operator as set out in the European Union (EU) recommended approach for the calculation of MTRs. They would also be more than 25% higher than the EU average MTRs which follow the recommended approach.’ As such, the Commission has argued that the MTR proposals could harm both competition and consumers.

According to the EC, FICORA’s proposal to allow Finnish mobile network operators to recover in the MTRs other costs than those strictly related to the incremental costs of provision of the wholesale termination services would lead to significantly higher termination rates. For its part, in a separate press release FICORA argued that its regulatory proposition promoted competition. Noting that the Information Society Code, which is in force in Finland, did not enable the use of the cost calculation model recommended by the EC, the Finnish watchdog claimed to have proposed stricter regulation and a ‘significant’ reduction in interconnection fees. As per the proposition, FICORA had suggested that MTRs should not exceed EUR0.0125 (USD0.0135) per minute, effectively meaning a 33% reduction from the current level. Commenting on the plans, FICORA deputy director Marja Lehtimaki was cited as saying: ‘We regard that the cost calculation model we use is appropriate and the price level achieved by means of it is reasonable.’

Nonetheless, the EC now has three months to discuss the matter with FICORA, in cooperation with the body of European regulators (BEREC), with a view to making the proposals compliant with EU law. During this period FICORA is prohibited from adopting the proposed measures, while at the end of the investigation period the EC may either lift its reservations or demand that the withdrawal or amendment of the Finnish regulator’s proposed measure.