EC may cap call charges

THE EUROPEAN Commission may cap prices for telephone calls made between EC countries, writes Mary Fagan.

The cap is one option under consideration following a review of tariffs within the EC which shows large price differences between cross-border calls and calls within a member state.

Michel Carpentier, who heads the European Commission directorate for telecommunications and information technology, said cross-border calls could cost up to six times as much as internal calls over the same distance.

He described this as a 'frontier effect' of serious concern.

Mr Carpentier said the commission was likely to publish a long- awaited document on telecommunications policy this month.

Speaking at a London conference, he also described as a vital issue whether the market for voice telephony should be opened up to free competition, a move which would be fiercely opposed by large monopoly operators in many EC countries.

'What we want is a trans-European network which brings the best services to customers at the best prices,' he said. The commission had to weigh the interests of consumers with those of the industry, which is expected to invest ecu400bn ( pounds 280bn) developing and expanding networks by the year 2000.

'The financial stability of the telecommunications organisations and their ability to generate cash flow continues to be a subject of top priority for any policymaker in the sector,' he added.

The commission has already faced strong opposition in its efforts to open the markets for communications equipment. It resorted to using Article 90 of the Treaty of Rome, which forces governments to accept its will.

Mr Carpentier said that if competition in voice telephony was deemed to be good for the Community, then Article 90 could again be used. But he stressed that the issue had to take into account the debate over subsidiarity, which was given prominence in the Maastricht negotiations.