Supreme Administrative Court confirmed FICORA's views on the need to regulate local loop products - obligations on maximum prices were repealed

Published 28.10.2014

Decisions issued by the Supreme Administrative Court (korkein hallinto-oikeus, KHO) on 27 October confirmed FICORA's views on the need to regulate metallic and optical fibre local loops. Instead, KHO repealed FICORA's decision as regards imposing a maximum price.

On 27 October, KHO issued its decisions on the leasing out of Anvia Oyj's, Elisa Oyj's and TeliaSonera Finland Oyj's local loops. FICORA issued related decisions concerning significant market power in 2012. KHO repealed the operators' appeals with the exception of the obligations on the imposition of a maximum price.

KHO confirmed FICORA's views on the operators' significant market power and on the need for price regulation. Leasing out both metallic and optical fibre local loops for a price that is reasonable and based on costs is necessary for promoting competition and removing the obstacles to market entry. In this respect, FICORA is content with the decisions issued by KHO.

KHO repealed FICORA's decisions to the extent that they concern the obligation imposed on the operators to adhere to a maximum price determined by FICORA in advance. KHO regarded that the grounds proposed by FICORA for imposing a maximum price were insufficient when taking into consideration the requirements laid down in the law on the exceptional situations regarding the imposition of a maximum price. FICORA is disappointed with KHO's guidelines because defining in advance the maximum price charged for regulated products would improve the predictability of regulation and it would enable the market access of new entrants more efficiently than ex post control of pricing.

Due to KHO's decisions, FICORA interrupts the consultation regarding the maximum prices imposed for the leasing out of local loops. The consultation began on 10 October 2014. The operators must take into consideration the impact of the price regulation remaining in force in their pricing. Meanwhile, FICORA is obliged to control that the pricing is lawful and also that the recently confirmed SMP obligations are compiled with. In addition, FICORA will start to assess other impacts of KHO's decisions, e.g. on the assessment of the need for ex ante regulation and on the imposition of obligations in the future.

KHO's decision concerning the appeal by Elisa Oyj (in Finnish)

KHO's decision concerning the appeal by TeliaSonera Finland Oyj (in Finnish)

KHO's decision concerning the appeal by Anvia (in Finnish)

Further information:

Marja Lehtimäki, Deputy Director, tel. +358 295 390 515

Sanna Hughes, Head of the Supervision group, tel. +358 295 390 522

A local loop means a part of a telecommunications network used for providing broadband subscriptions from the telecoms operator's network exchange to end-customers. When a service company, which has sold the subscription, carries out activities outside its own operating area, it must lease part of a local loop from the operating area's telecoms operator. The sound pricing of the local loop markets is a prerequisite for telecoms operators to be able to compete in each other's operating areas and thus be able to provide inexpensive broadband services to consumers.

Key words: Internet , Telephone , Broadband , Competition , Prices , Significant market power , News

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