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Telefonica to be fined up to €150 million
Tuesday 03 July 2007 16:51:07 by John Hunt

Telefonica, Spain's largest telephone company and owners of O2 and broadband subsidiary Be in the UK, is to be fined up to €150 million for charging broadband access wholesale rates that are too close to retail prices.

The European Commission sent a statement of objections to Telefonica in February 2006 stating their wholesale rates charged to rival operators in Spain are so close to retail prices that other companies are effectively excluded from competition. Bloomberg sources advised that the fine would be between €100 and 150million. A Commission spokesman told Bloomberg the regulator will be making a ruling on an "abuse of dominant position" case tomorrow, but didn't specify the company involved.

At the time of the objections, Telefonica used a defence of regulation on wholesale and residential pricing by the Spanish government that restricted them from abusing their position.

Other similar cases have accrued complaints from the European Commission. Deustche Telekom had to cut its fees in March 2004 after accusations of blocking competition by charging wholesale prices higher than residential customers pay to use its network in Germany. France Telecom was also fined after it was discovered its prices for high-speed Internet were below the costs of providing it.

More details at Bloomberg.

Comments

Posted by Kempy over 9 years ago
They should be much more subtle like BT - they have begun to charge ISPs for reporting faults, because nearly every time the engineer investigating the fault simply ticks the 'charge the customer (ISP)' box and at £144 each time it is running into thousands each month. Also, they charge £5 for us to regrade the customer on our service and £33.70 for an early cease of contract even though the customer has only regraded not ceased. I urge all ISPs to dispute every single charge of this type, 'cause Dick Turpin was a rank amateur compared to this lot.
Posted by adriandaz over 9 years ago
Maybe the EC should be slapping this kind of fine upon Kingston Communications who also use this kind of method to prevent any competition from been viable in Hull and parts of East Yorkshire.

http://tinyurl.com/3834z6
http://tinyurl.com/38hnwn
Posted by herdwick over 9 years ago
"at £144 each time it is running into thousands each month" well it would only need 7 such charges per month to make £1,000 so this isn't a surprise. We hardly hear of any end users getting charged for Engineer visits so there is a credibility gap here.
Posted by Kempy over 9 years ago
Credibility Gap? This new 'tactic' by BT started at the same time as the alleged cuts in wholesale pricing At the current rate this will cost us £60k P.A. or about two staff. Heres whats happening. We report fault fault is quickly cleared without recourse to us - we are charged £144. In order to properly resolve fault we reject fault - BT finally resolve fault and charge £144. we get bill and have to identify all incorrect charges and dispute bill. Most ISPs will roll over - or stop giving the right level of service for fear of being charged.
Posted by Kempy over 9 years ago
Credibility Gap? £144 represents two years worth of gross profit on most connections, so BT end up keeping its rivals on the back foot while appearing to be 'helping the Industry'

Still think my comments lack credibility Herdwick?
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