EU blocks German plan for higher fixed phone rates

Deutsche Telekom.JPG

The European Commission blocked plans by Germany to raise the fees operators such as Deutsche Telekom and Vodafone charge each other to connect fixed-line phone calls, in a sign of how Brussels is seeking to influence telecoms policy.

The German telecoms regulator (BNetzA) proposed raising the termination fees to three times the average rates in many parts of Europe to compensate for steadily declining revenues in the sector.

But the Commission is seeking to harmonise such call termination rates across Europe, which are ultimately passed on to consumers, to create a single market for telecoms.

"My job is to deliver a single market for telecoms for all EU citizens," the EU Commissioner for telecoms Neelie Kroes said in a statement published Monday (8 April).

"I urge BNetzA to bring forward a new proposal that delivers lower consumer prices and helps us build a telecoms single market," she added

The German regulator said it planned to raise rates to €0.0036 per minute at peak times and €0.0025 per minute at off-peak times. Operators following the Commission's stance charge on average €0.001 per minute.

The German regulator and the EU will now negotiate for a three-month period to seek a compromise solution, the Commission said.

This is the second time this year that the Commission has disagreed with Germany over the implementation of national remedies to address lack of competition in the telecoms market. The first time was on charges for mobile termination rates, which were more than 80% higher than in most other EU member states.

Kroes stressed in the statement that the single market for telecoms applied to "all EU countries – big and small", including Germany.

Article 7 of the Telecoms Framework Directive requires national telecoms regulators to notify the measures that they plan to introduce to address the lack of effective competition in the markets in question.

The rules enable the Commission to 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.

  • 8 July: BNetzA has until 8 July (three months) to work with the Commission and the body of European telecoms regulators (BEREC) on a solution to the case.

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