Brussels, 29/05/2006 (Agence Europe) - New entrants to the Italian telecom market may charge higher wholesale call termination rates than the dominant player Telecom Italia, but only for transitional period of four years, explains the European Commission in a letter to the Italian telecom authority Autorità per le garanzie nelle comunicazioni (“AGCOM”). The Commission, however, 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 is 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. The proposed obligations imposed on Telecom Italia allow alternative operators to have access to the necessary wholesale inputs on regulated terms in order to be able to compete in retail call markets. In the call termination market, AGCOM had proposed to impose regulatory measures both on the incumbent operator Telecom Italia and on alternative network operators, in view of the dominant positions all these operators hold on their respective networks. However AGCOM proposed to impose lighter obligations on alternative network operators than on the dominant operator Telecom Italia (so-called “asymmetrical regulation”). While Telecom Italia's termination rates are regulated with a view to achieving a cost-oriented level in 2009, alternative network operators are allowed to charge higher rates for the next four years before reaching the symmetry with Telecom Italia. The Commission's decision is based on Article 7 of the EU Framework Directive for electronic communications (2002/21/EC), which requires the Commission to ensure that national regulatory authorities apply competition law principles consistently in this sector. “I am determined to open, with the support of national telecom regulators, national telecom markets further to effective competition”, said Viviane Reding, EU Commissioner for the Information Society and Media. “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”.