EC issues Spanish broadband warning

The European Commission has formally asked the Spanish telecoms regulator (CNMC) to withdraw or amend its plans to regulate the prices Telefonica can charge other operators that want to sell broadband services based on its network. 

The EC said it was particularly concerned that the Spanish regulator´s proposed price-setting model would result in regulated prices going up to 50% above cost-efficient levels that no other competition safeguards such as stricter non-discrimination rules were planned.

“At the end of a three month in-depth investigation, the Commission has concluded that CNMC´s measure still lacks transparency and contains an element of arbitrariness, as CNMC failed to justify in detail the price levels set. BEREC, the body of European Telecoms Regulators, has also expressed support for majority of the Commission’s concerns,” said the EC in a statement.

The Commission first warned in June that the Spanish regulation plans for market-dominating Telefonica may not be compatible with EU telecoms rules, could be detrimental to competition and would not incentivise investment in high speed broadband.

“Price stability and transparency of price-setting mechanisms within each Member State are indispensable to set the right conditions for competition and investment in the telecoms sector. Despite variations in national circumstances, we must also ensure further regulatory coherence to promote a single market for telecommunications,” said European Commission vice-president Neelie Kroes.