Update 2 July 2012: OPTA has today adopted its final decision, stating explicitly that it maintains the content of the notified draft measure, given that the instruction given to it by the national Appeals Court (CBb), the highest judicial body, has precedence over an administrative recommendation of the European Commission. See specifically Annex G, points 142 and 145 of the OPTA decision. 
 

142. Het belangrijkste in dit kader is echter naar het oordeel van het college dat het CBb in het dictum van de uitspraak het college een opdracht geeft om de tariefplafonds voor vaste gespreksafgifte- en interconnectiediensten op basis van de plus BULRIC-kostenmethode vast te stellen (r.o. 5 onderdeel c.). Het CBb stelt in haar uitspraak zelf de tariefplafonds voor mobiele gespreksafgifte vast op het niveau van plus BULRIC. Die opdracht en vaststelling door het CBb, de hoogste rechterlijke instantie, gaan voor op een bestuurlijke aanbeveling van de Commissie. Het college is daarom gehouden de opdracht van het CBb uit te voeren.

[...]

145. Gelet op het voorgaande ziet het college geen aanleiding om het ontwerpbesluit in te trekken of te wijzigen conform de aanbeveling van de Commissie. Het college handhaaft het eerder genotificeerde besluit. Gelet op de latere publicatiedatum wordt alleen het tijdstip waarop de verlaging van vaste gespreksafgiftetarieven verschoven van 1 mei 2012 naar 1 augustus 2012.

As a consequence, the wholesale fixed call termination rates (FTRs) are set at 0,37c/min using the plus-BULRIC methodology (rather than 0,16c/min using the pure-BULRIC methodology) with effect from 1 August 2012 (rather than 1 May 2012). The full set of regulated fixed wholesale charges (including switch port charges, co-location charges, etc.) is contained in Annex A of the OPTA decision. By way of information, OPTA also included the wholesale mobile call termination rates (MTRs) determined by the Appeals Court in Annex B of its decision.

T-REGS Note: The question is now whether the European Commission will initiate formal infringement proceedings against The Netherlands.


Update 25 June 2012: The European Commission's Recommendation has been published this afternoon. The file can be accessed here:

icon European Commission Recommendation C(2012) 3770 in Case NL/2012/1284: Call termination on individual public telephone networks provided at a fixed location in the Netherlands and in Case NL/2012/1285: voice call termination on individual mobile networks in the Netherlands 

The Recommendation contains the following key points (including points 4 and 5 which contain timing for next steps):

1. OPTA should amend or withdraw the remedies containing the price control obligation
relating to the rates charged by SMP operators on the fixed and mobile termination markets
(markets 3 and 7) in the Netherlands in order to ensure that the evaluation of the efficient
costs for the rates applied on the fixed and mobile termination markets is based on a pure
BULRIC methodology, as being the most appropriate methodology for the regulation of the
rates applicable on the fixed and mobile termination markets.

2. OPTA should implement the methodology provided in Recommend 1 without delay and in
any event no later than 1 January 2013, having regard to the objectives laid down in Article 8
of the Framework Directive, and with particular regard to Article 8(3)(d) of the Framework
Directive, which requires OPTA to co-operate with other NRAs, with the Commission and
with BEREC so as to ensure the development of consistent regulatory practice, and as
recommended by the Commission in the Termination Rates Recommendation, which
recognises the pressing need to ensure that consumers derive the maximum benefits in terms
of efficient cost-based termination rates.

[...]

4. In accordance with Article 7(7) of the Framework Directive, where OPTA decides not to
amend the draft measure on the basis of this recommendation, it shall provide a reasoned
justification.


5. In accordance with Article 7(6) of the Framework Directive, OPTA shall communicate the
adopted draft measure to the Commission by 13 July 2012. This period might be extended, at
OPTA's request, to allow OPTA to undertake a public consultation in accordance with Article
6 of the Framework Directive.


Update 13 June 2012: The European Commission has today, for the first time, 'proceeded all the way' through the Art 7a FD procedure and has formally issued a Recommendation to an NRA requiring it to amend or withdraw proposed regulatory obligations ('remedies').

The case at hand concerns the OPTA (Netherlands) notification for wholesale fixed call termination and wholesale mobile call termination.

The European Commission's press release is accessible via: http://tre.gs/4n 

OPTA has also issued a press release, accessible via: http://tre.gs/4p

The actual Recommendation has not yet been published; we will update this T-REGS news item when it becomes available.


Update 22 May 2012: After the Danish DBA modified its proposal to ensure that there is no longer any potential differential treatment for the purposes of SMS MT depending on the national or international origin of an SMS, the European Commission has withdrawn its serious doubts.


Update 27 March 2012: The BEREC Opinions on these two cases were published today.

BEREC Opinion - Netherlands wholesale fixed call termination and wholesale mobile call termination

BEREC Opinion - Denmark wholesale SMS termination


Update 14 Feb 2012: The European Commission has now published the letters in which it details its reasons for opening the Article 7a(1) procedure relating to the cases in The Netherlands and Denmark, as well as the web notices, in which it invites interested third parties to file observations by 28 Feb 2012.

The files can be accessed here:

  • Netherlands: wholesale fixed call termination and wholesale mobile call termination:

icon SG-Greffe (2012) D/2859 for Cases NL/2012/1284 and NL/2012/1285

icon web notice

  • Denmark: wholesale SMS termination 

icon SG-Greffe (2012)2858 for Case DK/2012/1283

icon web notice

T-REGS Note: study of the EC comments letter reveals that the European Commission had already sent an Administrative Letter to the Danish authorities on 3 Jan 2012, formally challenging the measures previously adopted on wholesale SMS termination.


Today, the European Commission again triggered the new procedure in application of Article 7a(1) of the revised Framework Directive, according to which it formally expresses serious doubts, and triggers a 3-month co-operation procedure.

The co-operation procedure is described icon here and involves BEREC and the relevant National Regulatory Authority (NRA).

The two cases subject to today's triggering of the procedure both concern the specifics of draft regulatory remedies put forward by NRAs:

  • Netherlands: Cost-accounting methodology to set wholesale call termination charges ('plus BULRIC' versus 'pure BULRIC').

This case concerns OPTA's Jan 2012 notification of proposed measures on wholesale call termination charges, following the partial annulment of OPTA's previous decision on Markets 3 and 7, by the College van Beroep voor het bedrijfsleven (CBb - the relevant Appeals Court in The Netherlands). The Appeals Court, in a Judgment dated 31 Aug 2011, had itself set alternate wholesale mobile call termination rates (MTRs - at 2.4c/min instead of 1.2c/min as determined by OPTA, reflecting the difference between 'plus BULRIC' (2.4c/min) and 'pure BULRIC' (1.2c/min)) costing methodologies. In that same Judgment, the CBb had also ordered OPTA to revise wholesale fixed call termination rates (FTRs) along the same lines (i.e. 'plus BULRIC'. The CBb's Judgment (which was not appealable by OPTA) explicitly required OPTA not to apply the 'pure BULRIC' methodology which is recommended in the EC Recommendation on the Regulatory Treatment of Fixed and Mobile Termination Rates in the EU.

The text of today's European Commission press release can be accessed by clicking here.

A T-REGS note in English (7 pages, with exact paragraph references to the CBb Judgment in the original Dutch language) dated 12 Sep 2011, describing the substance of CBb Judgment LJN:BR6195, is available on request (on commercial terms). Please contact Yves Blondeel for more information on this T-REGS note.

  • Denmark: Regulation of domestic wholesale SMS termination charges, but not international wholesale SMS termination charges.

This case concerns the Danish Business Authority (DBA) Dec 2011 notification proposing to apply the same wholesale SMS termination charge rules to Lycamobile (a new MVNO in Denmark) as to the existing Danish MNOs and MVNOs. The substance of the case relates to the fact that the DBA proposes wholesale price-cap regulation applicable to the MNOs and MVNOs only with regard to their relationship with their 'retail competitors' (in practice meaning that regulation would apply to domestic wholesale SMS termination rates, but not to wholesale international SMS termination rates). The European Commission is clearly invoking its newly acquired powers under the 2009 Telecoms Package (which was to be implemented by all EU Member States by 25 May 2011) over proposed regulatory remedies in this case.

The text of today's European Commission press release can be accessed by clicking here.

The theme of wholesale SMS termination was the subject of a T-REGS news item in mid-2010, which has been updated as new developments (including today's development) occurred.

We take this opportunity to also flag the fact that the Spanish competition authority has launched an investigation into wholesale SMS termination and origination charges.

We will update this T-REGS news item as the official documents on the Art 7a(1) cases become available. Please contact Yves Blondeel for more details or for a discussion.