Arcor v Germany/Deutsche Telekom [2008] EUECJ C-55/06

European Court of Justice judgment (about 24 pages) on EC law aspects of a dispute about the basis for local loop price controls in Germany.

The court found, in line with the Advocate General opinion, that the concept of cost-orientation did not mean much on its own:

56. It is apparent from the above that, generally, Community law lays down, in various areas of the telecommunications sector, the principle of cost-orientation of rates or prices without specifying what that means in each of the areas concerned (interconnection, voice telephony or the local loop).

57. In those circumstances, to define the principle that rates for unbundled access to the local loop are to be set on the basis of cost-orientation, account must be taken not only of the wording of that principle but also of its context and the objectives pursued by the legislation laying down that principle.

The court rejected both Germany's arguments in favour of the systematic use of replacement (current) costs and Arcor's arguments in favour of the systematic use of actual (historic) costs, holding instead that it was for the national regulator to determine its approach in the light of the competitive situation in each market and the relevant policy objectives. There was no EC law objection to the use of cost modelling methods to estimate such costs.

For further information or advice please contact Franck Latrémolière.

Filed under ECJ/CFI, Price controls.

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