EU Approves Transitional Italian Telecoms Measures

by Ulrika Lomas, for LawAndTax-News.com, Brussels

30 May 2006

The European Commission announced on Monday that it has endorsed, for a transitional period, Italian measures to encourage new market entrants in fixed telephony.

Under the approved measures, new entrants to the Italian telecom market may charge higher wholesale call termination rates than the dominant player Telecom Italia, but only for a transitional period of four years.

In a letter with comments sent to the Italian telecom authority, Autorità per le Garanzie nelle Comunicazioni (“AGCOM”), the Commission stated that it requires AGCOM to specify the details of a 4-year "glide path" for reducing alternative network operators’ wholesale call termination rates.

Moreover, to better safeguard consumer interests, AGCOM has been asked to develop a cost model for calculating alternative network operators' termination rates that takes account of the need for them to become cost-efficient over time.

“I am determined to open, with the support of national telecom regulators, national telecom markets further to effective competition”, announced Viviane Reding, EU Commissioner for Information Society and Media.

She continued:

“In order to promote infrastructure-based competition, it can be justified to allow new entrants to charge higher call termination rates. However, such a measure should be justified by higher cost and be clearly limited in time to encourage new entrants to become cost-efficient. This efficiency should be reflected in progressively lower termination rates and hence lower retail prices for end users."

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