EC says Italian termination rates still too high

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EC says Italian termination rates still too high
Thursday 10 April 2008 | 04:41 PM CET

The European Commission has reiterated its concern about asymmetric fixed termination rates in the Italian market. While clearing the Italian regulator Agcom's new decision setting rates for the period to July 2010, the commission said it still considers the higher rates allowed for alternative operators versus Telecom Italia as too high, both in absolute terms and relative to the rest of the EU. The commission had already asked Agcom for more information on how it determined the rates, and the regulator has since then lowered the rates further. The EC said it was now pleased with the cost-oriented approach used to set the rates. The high asymmetry was attributed to several factors, what Agcom called in a statement as part of the highly competitive Italian market. According to the EC, the regulator used high and different starting values of alternative operators' glide paths, included operator-specific data in the cost model and included additional costs and mark-ups taking account of so-called "competition costs" (in recognition of initial start-up and sunk costs of entry) and a proportion of the costs of customer premises equipment. Its letter to Agcom on the matter is not legally biding, but the regulator is required to take the comments into account. The commission has proposed giving the EC more power to enforce harmonisation in such rates across the EU.