BEREC Opinion on Phase II investigation Case SI/2018/2050

On 10 January 2018, the European Commission registered a notification by the Slovenian Regulatory Authority, Agencija za komunikacijska omrežja in storitve (AKOS), concerning the market for wholesale high-quality access provided at a fixed location. In its notification, AKOS proposed to impose a price-setting mechanism based on LRIC+ methodology to be developed by the SMP operator. The WACC that the SMP operator is going to use for this purpose is calculated by AKOS.On 9 February 2018 the Commission sent a serious doubts letter opening a phase II investigation pursuant to Article 7a of Directive 2002/21/EC as amended by Directive 2009/140/EC. The Commission’s doubts concern the inclusion of a mark-up for company size (a ‘size premium’) in the WACC calculation. The Commission was of the view that such a size premium was not commonly applied by other NRAs in the EU, that AKOS had not sufficiently justified its inclusion and that AKOS did not provide sufficient information on how it reached the value of the size premium or explain why this value was appropriate for use in calculating the WACC of the Slovenian regulated company.

On the basis of the analysis set out in this Opinion, BEREC considers that the Commission’s serious doubts are justified.