TELECOMMUNICATIONS/FROM COPPER TO FIBRE : PROPOSAL TO MANIPULATE COPPER ACCESS PRICES CREATES STIR.

Wholesale access prices for the copper networks of incumbent operators should be lowered to give these operators incentive to invest in fibre networks. This proposal, contained in a consultation published by the European Commission in October 2011, created a stir among telecommunications operators, who are clearly divided on the issue. The association of alternative operators, ECTA, strongly supports the initiative, while incumbent operators represented by ETNO are vehemently opposed. The subject is extremely touchy because billions of euro are at stake and particularly because the Commission, which says it is promoting a "technologically neutral" approach to achieve its broadband internet targets for European territory for 2020, seems to be giving priority to pure fibre.

The debate got under way in October 2011, when the Commission published its consultation on the pricing method used by national regulators for access to telecoms networks. Responses submitted during the consultation, which closed in November 2011, are being used to help it draw up a recommendation on application of price control remedies. Its aim is to contribute to implementation in the telecoms sector of uniform conditions that encourage competition and investment in the Union. Although the recommendation will not be binding, its influence on national regulators will be real (see box).

The consultation contained two sections. The first addressed calculation of the costs of providing access to telecommunications networks (copper and fibre), the goal being to reduce gaps between European Union member states, in other words to further harmonise pricing methods. The wholesale access price for the local loop varies from 5.21 a month in Lithuania to 12.41 a month in Ireland, explained the Commission.

Most importantly, though, the Commission proposed to reduce access prices for the copper networks owned by incumbent operators in areas where investments are not being made in next generation access networks (NGAs), particularly fibre. In parallel, copper access prices would not be lowered and could even be increased, based on a specific calculation method, in places where operators agree to invest in fibre. In other words, the Commission intends to manipulate prices - in practice, to regulate the dominant models - by means of new calculation methods, with the objective of promoting investment in NGAs.

More broadly, these proposals are expected to contribute to achievement of the...