Commission approves Ficora’s SMP proposal for fixed access

Commission approves Ficora’s SMP proposal for fixed access

Ficora has successfully finished international hearing on SMP regulation in fixed access, Markets 3a and 3b. The European Commission approved Ficora’s second SMP decision proposal on 21 February 2018. In consequence, Ficora is expected to publish the final SMP decisions in near future.

The process has been long and complicated with the biggest challenges revolving around price ceiling regulation in fibre access (part of Market 3a). Among other phases, the Commission rejected Ficora’s first proposal in July last year due to inconsistent cost modelling; most notably, the model assumed full-coverage fibre roll-outs that was highly unrealistic and led to biased results. Further, the Commission considered imposition of price ceilings based on BU LRIC a harsh approach in a market where investments in network expansions should be encouraged. Ficora decided, however, to stick to BU LRIC but adopted part of the Commission’s views by relaxing the assumption on fibre roll-outs. The Commission was satisfied with the change and gave its approval last week.

The Commission also approved Ficora’s new proposal on setting only conditional price regulation on copper access; it is to be implemented only if an operator deviates from a joint agreement not to increase wholesale prices during the next three years. Similarly, the Commission accepted Ficora’s view on not imposing price regulation on bitstream market (3b). In sum, the Commission’s review led to one important change in cost modelling but otherwise left Ficora’s original decision pretty much intact.