* Draft rules to cut cost of broadband build by 60 bln euro
* Europe behind Asia, parts of US on faster fibre broadband
* Patchwork of different rules hinder investment
* Part of Europe's effort to create a telco single market
By Claire Davenport
BRUSSELS, March 26 The European Commission has
set out rules aimed at reducing the cost of building high-speed
broadband networks, in a move that shows how Brussels is seeking
more power over the telecoms sector.
The initiative is important because European leaders are
worried that debt-laden telecom operators' slow pace of
investment is saddling the region with weak infrastructure that
over time could hobble its already recession-wracked economies.
It also comes as the EU cuts funding for broadband rollouts.
EU budget cuts, which must be approved by Parliament, hammered
out in February cut such funding for rural projects to just 1
billion euros ($1.3 billion) from 9.2 billion.
The draft regulations issued on Tuesday, which Reuters
reported in early February, requires new and renovated housing
to be broadband ready, calls for ducts and other infrastructure
to be shared among telcos on fair and reasonable terms and
shortens the permitting process.
It also calls for water, electricity and gas companies to
share their underground ducts with telecoms firms to cut the
cost of creating high-speed broadband networks.
The Commission said digging up streets to lay fibre accounts
for up to 80 percent of the cost of deploying new networks,
adding that the new rules would save up to 60 billion euro.
The construction in Europe of fibre networks lags far behind
Asia and some parts of the United States, worrying policymakers
who see the infrastructure as a key motor for economic growth.
Europe had 5.95 million fibre broadband customers by mid-2012, a
fraction of the more than 58 million subscribers in Asia.
About half of Europeans still rely on internet technologies
such as ADSL, which offers speeds of up to 30 megabits per
second compared with 100 megabits or more for fibre.
Hampering the buildouts, the continent's debt-laden telecom
operators such as Telefonica and Telecom Italia
are wary of ploughing billions into fibre when the
investments will take decades to pay off.
Another major obstacle has been the patchwork of regulations
in the 27 member states of Europe on how telcos must share
access to ducts and lines into homes, the cost of such line
rentals, and also the technology deployed.
For example, in France, the telecoms regulator has said
operators must share access to the final part of fibre into the
home. But Spain hasn't gone that far, and in Germany, the
regulator has backed Deutsche Telekom's plan to delay
fibre and rely on another technology, known as VDSL, instead.
Each country also sets their own prices for competitors to
rent space on each others' networks.
"This shows that the European Commission is interested in
centralising control," said analyst Robin Bienenstock at
A Commission source told Reuters the proposals were not
about centralised planning but converging regulatory approaches
to make them more consistent.
"In most places, today's rules hurt Europe's
competitiveness," said European Commission Vice President Neelie
Kroes in a statement. "Everyone deserves fast broadband. I want
to burn the red tape that is stopping us for getting there."
The proposals are part of a bigger package of measures being
rolled out by the Commission in coming months to try and deliver
a single market for telecom services.
The Commission plans to present its ideas on the single
market by October for debate by countries. The proposals may
include tighter control of new mobile spectrum and changes to
how prices are set for operators to rent out space on the
networks of competitors, analysts have said.
Telecom bosses also hope the initiative will lead to a more
permissive approach on mergers in the sector, although the top
antitrust regulator in Brussels remains wary of such moves.
The ECTA, a trade body representing alternative operators
that challenge former state-owned telcos, said it welcomed the
effort to reduce the cost of broadband roll-outs.
"Reducing those costs would speed up the deployment of open
networks and the provision of competitive communication services
to businesses and consumers," said Tom Ruhan, ECTA's chairman.
ETNO, the lobby representing traditional telecom operators,
said the Commission's rules should focus on where fibre projects
were not getting off the ground, such as rural areas.
"This welcome step needs to be complemented by further
reforms of the overall regulatory landscape aiming at targeting
regulation to uncompetitive areas and real bottlenecks," said
Daniel Pataki, ETNO's director.