Spanish incumbent Telefonica may be violating EU antitrust rules ...
Spanish incumbent Telefonica may be violating EU antitrust rules by maintaining too little spread between what it charges rivals for wholesale broadband access and its own customers for retail access, the European Commission said Wed. In a “statement of…
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objections” -- the first step in formal competition proceedings -- the Commission said preliminary investigation shows that since 2001, the difference between Telefonica’s wholesale prices to other telcos and downstream retail charges to customers has been too narrow to cover its own costs for supplying its end- users. The “margin squeeze” deprives new market entrants that need access to Telefonica’s infrastructure of the ability to compete for retail subscribers, the Commission said. Retail broadband prices in Spain are high and well above EU average, and the rollout of alternative infrastructure lags far behind, it said. Telefonica rivals are limited to either building their own networks or buying one of 3 types of wholesale products available to them, all built on the incumbent’s nationwide local access network, the Commission said. The statement contains only preliminary conclusions; the telco has 2 months to respond. If found to have violated competition law, Telefonica can be fined.