Members of the European Regulators Group (ERG) are set to agree that long-run incremental cost (LRIC) will be the basis of deciding price controls in the 18 markets regulated under the Framework agreement in EU member states. The ERG will finalise the move when its members meet in plenary in Budapest on November 20. While LRIC is already used to determine standard interconnect charges, "benchmarking" - averaging member states' termination rates - is still used to decide the level at which mobile termination rates should be set. And these rates may be set according to models other than LRIC. Mobile termination rates are the fees operators have to pay to land calls on mobile operators' networks. Though the more widespread use of LRIC will bring down fixed-to-mobile termination rates, its full impact may not become evident for some time. Member states are still conducting market reviews to comply with the EU's new Communications package, and even when they are complete, the designation of dominance in a given area, particularly mobile termination, is likely to be disputed. All of this will take time.
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