News, 25 October 2010
The FCA has ordered Elisa Oyj to comply with the remedy whereby it undertakes to change its pricing practice regarding the installation charges collected from single-family and detached houses. The decision made by the FCA on 21 October 2010 is connected to the pricing change introduced by Elisa more than a year ago, which caused a manifold increase in the price of the Talokaapeli product.
Due to the price increase, a single-family / detached house connected to the telecom network was obligated to pay in the installation charges a bigger proportion of the expenses caused by the construction of a fixed telecom network than previously. In so far as the price increase concerned the traditional telecom network, through which the basic broadband service is offered, the price increase could include features which were problematic for the Competition Act. The FCA found that, incorporated into the switching costs, Elisa also collected other, unrelated costs. Elisa has now provided the agency with an undertaking to change its pricing structure so as to eliminate the detected problems.
Other telecom operators have since increased the installation charges collected from properties. The investigations of three other operators are still pending at the agency, however.
The FCA finds that the service in the fixed broadband network is still significant to the supply of broadband services. For the single-family and detached houses built in established neighbourhoods, it is currently often the only way to obtain broadband services sufficient to meet the users' data transmission needs. According to the agency, the mobile network service is supplementary, rather than substitutive, to the fixed network service . Optical fibre connections for single family dwellings are primarily built on new residential areas.
The FCA examines the local operators' pricing of the Talokaapeli and corresponding products as a potential abuse of dominant position. The Competition Act prohibits excessive pricing from companies in a dominant position. The commitment decision on Elisa is based on 13(3) of the Competition Act, on the basis of which the FCA may order that the commitments shall be binding on the business undertakings or associations of business undertakings involved in an alleged competition restraint, if these commitments are such that they may eliminate the restrictive nature of the conduct.
Senior Research Officer Juha Karjanlahti