Following a three-month in-depth investigation the Commission issued a recommendation concluding that the German regulator (BNetzA) does not follow the EU recommended approach for the calculation of fixed termination rates (FTRs). The adoption of rates based on the proposed methodology would mean that a German consumer would pay 200% more for the fixed telephony services than the consumers just across the border.

Following a three-month in-depth investigation the Commission issued a recommendation concluding that the German regulator (BNetzA) does not follow the EU recommended approach for the calculation of fixed termination rates (FTRs). BNetzA proposes to base FTRs for the newly defined 19 operators on the methodology previously applied for Deutsche Telekom (DT), which is contrary to the EU regulatory framework. The adoption of rates based on the proposed methodology would mean that a German consumer would pay 200% more for the fixed telephony services than the consumers just across the border. The Commission now requests BNetzA to withdraw its proposal or to amend it in order to bring it in line with the EU telecom rules. BNetzA has one month to communicate the adopted measure to the Commission. Where it decides not to amend or withdraw its proposal on the basis of the recommendation, it shall provide the Commission with a reasoned justification.

Background

Termination rates are the rates telecoms networks charge each other to deliver calls between networks, and each operator has market power over access to customers on its own network. These costs are ultimately included in call prices to the detriment of consumers and business.

In the current case BNetzA proposed to impose LRAIC+ methodology for calculation of termination rates for the new 19 alternative operators recently defined on the market. Already in April 2013 (see IP/13/311), the Commission criticised BNetzA's LRAIC+ method for calculating FTRs for the main operator, Telekom Deutschland GmbH (DT), resulting in rates, which are around 200% higher than in the Member States which follow the recommended approach and in August 2013 issued a recommendation requesting BNetzA to amend or withdraw the proposal (see IP/13/766). The German regulator however did not follow the Commission's recommendation and notified the Commission further proposals to set FTRs contrary to the recommended approach. All the above cases resulted in the Commission's recommendations requesting withdrawal or amendment of the draft measures.

The body of European Telecoms Regulators (BEREC) again expressed its full support for the Commission's position.

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