EU executive, Germany clash again over broadband

By Huw Jones

BRUSSELS (Reuters) - Including broadband in the range of services a telecom operator must offer could boost high-speed Internet access take up, the European Union's top telecoms regulator said on Monday.

EU Information Society and Media Commissioner Viviane Reding said wider use of high-speed Internet was crucial for economic and social development in rural areas and less developed regions of the 27-nation bloc.

"Should it be part of the universal service obligation?" she asked at a conference on broadband organized by the EU executive body.

The USO obliges a telecom company to offer certain services in return for a license to operate.

Reding said as the bloc comes to rely more heavily on broadband for economic and social development, the objectives of the USO needed rethinking.

"The current funding model designed for national monopolies is no long suitable for today's market," Reding said.

She will publish a discussion paper next year which could lead to draft legislation in 2009.

But Peter Hintze, a junior minister with EU president Germany, opposed extending the universal service obligation to boost broadband use.

"A market based solution will achieve this given the pace at which technology is developing," Hintze told the conference.

The EU executive is already taking legal action against Germany for adopting a law that Brussels says shields Deutsche Telekom's new high-speed broadband network from being used by competitors.

FUNCTIONAL SEPARATION

Reding is due to publish proposals to revamp the EU's telecoms rules that will include the introduction of "functional separation".

If agreed by EU states and the European Parliament, it would allow a regulator to force a telecom company to carve its network and services into separate businesses to make it easier for new entrants to compete with either on an equal footing.

Many countries that were behind in broadband take-up also have "endemic problems of discriminatory behavior by incumbents" she said, referring to the former state-owned telecom monopolies.

"Functional separation could be used as an exceptional measure," Reding said.