Brussels, 28/11/2013 (Agence Europe) - On 26 November, the European Commission asked the Austrian telecoms regulator (TKK) to withdraw or amend its proposal for regulating broadband wholesale access, including the fees which the dominant operator, A1TA, can charge other operators who want to sell broadband services via A1TA's network. European Commissioner for the Digital Agenda Neelie Kroes stated: “Regulation which does not allow the regulated operator a return on investment will certainly not help deliver modern networks to EU citizens. Regulation needs to be proportionate and sustainable while ensuring that both regulated and alternative operators have the right incentives to invest in new technology”.
TKK has developed a cost model of €15.34 per month for unbundled access to the copper loop of Telekom Austria (the parent company of A1TA). In July, the Commission expressed concern that this model does not take all EU rules into account and therefore results in an access price to the copper network which is above the EU average. Nevertheless, TKK decided not to impose the tariff ceiling, proposing a considerably lower rate instead - of €5.87 per month - obtained from a margin-squeeze test. Although access rates that are this low can favour competition in the short term, they are likely to hinder innovation and the effectiveness of investment in new and modernised infrastructure, and they ultimately risk preventing operators from recovering the cost of their investment, the Commission judged. Another drawback to this approach is that it would not contribute to stabilising the environment and making it predictable for Telekom Austria and alternative operators because the prices obtained through margin-squeeze could be revised every year. Lastly, national or foreign operators would have less incentive to invest in Austria - which would have a negative effect on cross-border telecoms markets in the EU. At the end of its three-month investigation, the Commission has confirmed its position. It now requests the withdrawal or amendment of the TKK proposal. (IL/transl.fl)