EU regulator unhappy with plan for phone fee

BRUSSELS - Italy's plan to allow telephone companies to continue charging above-cost fees for completing calls on their networks hurt consumers by protecting mobile operators from competition, the European Union's telecommunications chief said yesterday.

Italian telecoms regulator AGCOM has proposed that the fee, known as the mobile-termination rate, be lowered to 7.9 cents per minute by July 2012 from 11.8 cents.

The decrease should be greater and faster, European Telecommunication Commissioner Viviane Reding said yesterday in Brussels.

"I am very disappointed by the approach taken by the Italian telecom regulator," Reding said.

Reding has been fighting to reduce mobile termination rates for several years. Last July she proposed cutting the rate by 70 percent over the next three years, eliminating unfair competition by mobile phone companies overcharging fixed-line competitors. She has clashed with regulators in the 27-nation EU over their protection of former national telecommunications monopolies.

Under EU rules, national regulators must take "utmost account" of comments by the European Commission, the EU's executive arm. The commission has no veto power over regulators' decisions. It can only sue countries for not taking account of its comments.

Reding's comments follow a meeting with Stefano Parisi, the chief executive of Milan-based FastWeb SpA, Italy's second-largest fixed-line company after Telecom Italia SpA, and Corrado Sciolla, the chief executive of BT Italia SpA.

Parisi said that AGCOM's plan will mean that mobile termination rates for mobile companies will be 14 times the rate for fixed-line companies by July 2012, up from the current rate of four times.

"It's ridiculous to have a higher termination rate for mobile operators than for fixed-line companies when the investment in networks will be needed by fixed-line companies," he said.