EC endorses higher Italy telecom rates

May 30, 2006 at 10:35 AM

ROME, May 30 (UPI) -- The European Commission has endorsed temporary higher call-termination rates for new entrants into Italy's telecom market.

The commission said Monday the new players should be allowed to charge more for termination than Telecom Italia for a period of four years, after which Italian regulators would implement a reduction of wholesale termination rates.

Termination rates refer to the price charged to connect calls.

The EC said the plan was aimed at generating capital for new infrastructure and was based on Article 7 of the EU's electronic communications framework, which requires European regulators to apply competition laws consistently.

"In order to promote infrastructure-based competition, it can be justified to allow new entrants to charge higher call termination rates," EU Commissioner Viviane Reding said in a statement. "However, such a measure should be ... clearly limited in time to encourage new entrants to become cost-efficient."

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