EU Court Ruling Pleases Incumbent Telcos
A European Union (EU) court ruling has stated that historical costs must be taken into account for pricing telecoms services, thus opening the way for a rethink of the rules across Europe. In its ruling, the European Court of Justice said national telecoms industry regulators must take into account past and current costs of network operators. The case was referred to the EU by a German court and follows a suit filed by Vodafone's German fixed-line unit, Arcor against Deutsche Telekom. Arcor had argued that Deutsche Telekom overcharges for access to its fixed lines. However, Thomson Financial reports that the court did not rule that the charges were excessive.
Although the court has not definitively ruled that the charges were unfair, it opens the door for incumbents to argue for higher prices for their services. The argument for most new players and regulators had been that prices ought to be based on the present cost of providing the service. By including the past costs, the dynamics of pricing for such services like local loop unbundling, bitstream access, and wholesale line rental, could be under review.
