Press Release: Digital Agenda: European Commission endorses general model of Italian regulator to calculate wholesale access prices; asks it to recalculate maintenance and commercial costs

In a letter sent to the Italian telecoms regulator (AGCOM), the European Commission agrees with AGCOM`s general approach to base wholesale prices for access to Telecom Italia`s network on a costing model which mimics costs incurred by an efficient operator managing a newly built copper network in a competitive market - i.e. Bottom Up Long Run Incremental Costs, BU-LRIC. However, the Commission has expressed its concerns that AGCOM has not consistently applied this model to calculate the prices which alternative operators would be charged for accessing Telecom Italia's network.

AGCOM plans to increase certain access prices, in particular for local loop unbundling (LLU) services. In the Commission's view the prices proposed by AGCOM do not sufficiently reflect the maintenance and commercial costs of an efficient operator managing a newly-built copper network. This creates a risk that alternative operators would have to pay prices higher than those which they should normally pay for high quality access to a modern network. The Commission requests AGCOM to re-examine its cost calculation using data of an efficient company managing a newly-built copper network. The resulting prices would give the correct investment signals to both access-seeker and access-provider and ensure that consumers pay fair prices for high-speed Internet access. AGCOM is required under EU telecoms rules to “take utmost account” of the Commission’s comments.