Reccomendation on Termination Rates 2008
The commission has published for public consultation before summer their last work on termination rates. The consultation last till mid of september. You can find here the relevant documents.
It is quite long time that the commision is triying to sell their position to european stakeholders: harmonisation of termination rates in all Europe is a must for an efficient communication market.
If we look at the broad impact of this reccomendation and the forthcomming challenges of convergence of network a proactive approach of the commission in this direction makes sense.
However, if the objective of the reccomendation is noble, we can hardly say the same for the tools used to achive it.
The commission obsession on using a LRIC bottom up model as a panacea is not supported by any empirical evidence of its effectiveness and superiority against a FAC or a LRIC top down. The IRG/ERG report on regulatory in practice have demostrated several times that there is not a direct correlation between harmonisation, lower interconnect rates and the use of a LRIC model.
For example: UK, currently the country with the lower fixed termination rates in Europe, uses a audited FAC and not the so loved bottom up LRIC. As my friend Gavin was used to say, if you use the right efficiency measures and audit properly the data received you will have comparable, if not in some cases superior results.
We can reconise that the commision knows about the weakness of a LRIC bottom up model in the final words of the draft reccomendation when is mentioned the reconciliation of the data with a top-down audited model.
There are more and more critics to the reccomenation I could do, however, I leave this exercise to the people that are going to answer to the reccomendation. What is imporant is that we discuss about it and may be a new course to the use of LRIC has been taken.
We have many years to prepare ourselves to the new rules, that we will have just to follow; someone out there will have to re-allocate costs to other services and others will have to check this allocations. So just follow the rules? No not really, you have time to send your comments to the draft reccomendation!
www.regulation.tk
It is quite long time that the commision is triying to sell their position to european stakeholders: harmonisation of termination rates in all Europe is a must for an efficient communication market.
If we look at the broad impact of this reccomendation and the forthcomming challenges of convergence of network a proactive approach of the commission in this direction makes sense.
However, if the objective of the reccomendation is noble, we can hardly say the same for the tools used to achive it.
The commission obsession on using a LRIC bottom up model as a panacea is not supported by any empirical evidence of its effectiveness and superiority against a FAC or a LRIC top down. The IRG/ERG report on regulatory in practice have demostrated several times that there is not a direct correlation between harmonisation, lower interconnect rates and the use of a LRIC model.
For example: UK, currently the country with the lower fixed termination rates in Europe, uses a audited FAC and not the so loved bottom up LRIC. As my friend Gavin was used to say, if you use the right efficiency measures and audit properly the data received you will have comparable, if not in some cases superior results.
We can reconise that the commision knows about the weakness of a LRIC bottom up model in the final words of the draft reccomendation when is mentioned the reconciliation of the data with a top-down audited model.
There are more and more critics to the reccomenation I could do, however, I leave this exercise to the people that are going to answer to the reccomendation. What is imporant is that we discuss about it and may be a new course to the use of LRIC has been taken.
We have many years to prepare ourselves to the new rules, that we will have just to follow; someone out there will have to re-allocate costs to other services and others will have to check this allocations. So just follow the rules? No not really, you have time to send your comments to the draft reccomendation!
www.regulation.tk
Labels: Commission, Convergence, interconnection, Regulation, Regulatory Accounting
posted by Marco L. Gatti at
Thursday, August 07, 2008
