Community Research and Development Information Service - CORDIS

Accounting separation and interconnection pricing in open network provision (ONP)

The European Commission, DG XIII, has launched an open call to tender for a study on the issues relating to accounting separation and interconnection pricing in the context of open network provision (ONP).

The purpose of the study is to provide guidelines for accounting separation, in the context of interconnection pricing, to dominant operators and organizations that have special or exclusive rights in sectors other than telecommunications. The need for accounting separation is to provide transparent interconnection pricing leading to competition on a fair, sustainable and efficient basis. Accounting separation will make transparent the costs, revenues and capital employed in those areas of the business subject to competition and give greater visibility to the operator of the pattern of its costs.

The accounting practices employed should reflect the present and potential shape of competition. The accounts should be assembled with a knowledge of cost drivers so that costs are allocated as far as possible to the activities that cause those costs (i.e. activity-based accounting). Ultimately, interconnection prices calculated according to these accounts must make it apparent to a regulator and interconnecting parties that no anti-competitive cross-subsidies exist.
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