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Finnish Communications Regulatory Authority (FICORA) Switchboard +358 9 69 661 Television fees Customer service of Fi-domain names +358 9 6966 700 |
14.07.2004 International comparative study: Powers and resources of FICORA’s economic regulation insufficientInternational comparative study: Commissioned by the Finnish Communications Regulatory Authority (FICORA), Europe Economics, an independent consultancy firm, has made a comparative study on economic regulation in five EU Member States and in its report put forward propositions for the development of FICORA’s economic regulation. The countries involved in the comparative study were Denmark, Ireland, Italy, Sweden and the UK. In comparison to the other countries’ regulatory authorities, FICORA’s resources for economic regulation were found poor and its powers clearly more restricted, which tends to reduce the influence of the economic regulation on the Finnish communications market. More powers for FICORA According to the report, the powers of FICORA’s economic regulation should be increased in order that the Authority could cope with its controlling tasks efficiently. FICORA’s powers for controlling telecommunications operators’ activities and to interfere in cases of infringement detected are clearly smaller than in the other countries reviewed. Europe Economics emphasises that the light handed (from the European viewpoint) regulation traditionally applied in Finland should not, however, lead to ineffectiveness. Europe Economics recommends the Authority have, like the other countries’ authorities involved, among other things the powers for determining the prices of regulated products, where necessary, and in particular claim the publication of the operators’ internal transfer prices. Consequently, it could be avoided that network operators favour their own service operators and thus reduce independent service providers’ chances for competition. At present, FICORA has no powers for controlling the internal transfer prices of operators with SMP (significant market power). Furthermore, Europe Economics finds that a rapid and efficient mechanism for solving disputes between telecommunications operators is a pre-requisite for efficient economic regulation. A special Appeals Board is recommended be established. It would as a first stage deal with complaints concerning pricing decisions within a reasonable time limit. Such a model is already used for instance in Denmark. In addition, Europe Economics finds it important that FICORA’s decisions should stand during appeal. This is to ensure that appeals are not used for delaying the resolution for instance in cases where the implementation of the decision would lead to reduction of prices charged to other telecommunications operators. Europe Economics also highlights that an authority should have sufficient sanctions available as tools to be used in case of non-compliance of regulations. It is proposed in the report that to prevent unnecessary delays, a penalty be imposed on operators that are not able to deliver the information requested by FICORA in due time. A harmonised “yardstick” for fragmented markets In Finland, the economic regulation of telecommunications operators is particularly challenging compared to the rest of Europe, as the ownership of fixed networks is spread out to tens of independent telecommunications operators, the pricing of whose network products FICORA should be able to monitor. On the other hand, the market structure could also be exploited for instance by collecting in a consistent manner background information on the costs behind the companies’ regulated prices and comparing them in a harmonised way (so called yardstick competition model). By this method both inefficient operators and good examples in the sector will be detected. According to Europe Economics, to increase efficiency, such comparative information should also be made publicly available, which, however, would require the questions of confidentiality to be solved first. Even now FICORA ought to be able to publish reference price-lists for regulated wholesale products, where operators collecting particularly high prices could be easily detected among other operators. The report as a whole is available at the address: Further information: Finnish Communications Regulatory Authority Europe Economics
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