EU lawmakers dilute core parts of telecom overhaul

BRUSSELS, July 7 (Reuters) - European Union lawmakers voted on Monday to water down plans from the bloc’s executive to overhaul EU telecom rules, but kept a key provision to split operators into business units and boost competition.

EU Telecoms Commissioner Viviane Reding wants more competition in the 300 billion euro ($469.4 billion) sector so consumers have a wider choice of faster and cheaper services.

The bloc’s states and the European Parliament have the final say on the package. Parliament’s industry and internal market committees voted on the package in Strasbourg and made big changes to Reding’s proposals.

“It will further help consumers in making the right choice of the most appropriate service and reinforce their rights in making that decision,” Malcolm Harbour, a British centre right lawmaker who steered part of the package through parliament, told Reuters after the vote.

Cross-party deals last week in the industry committee boiled down over a thousand amendments to Reding’s package into 33 compromises that were adopted by large majorities.

Reding’s plan for a pan-EU electronic communications authority was ditched and instead the industry committee voted in favour of enhancing an existing body of regulators from EU states into a Body of European Regulators in Telecoms, or BERT.

The industry committee also scrapped Reding’s plan for the Commission to have a veto over decisions taken by national telecom regulators and instead give BERT the last word.

If the Commission disagrees with a national regulator’s proposal for boosting competition, it will have to have BERT’s backing to alter it. Otherwise the proposal stands.

BERT’s funding will be subject to further tweaking before full parliament votes on the telecoms package in September.

There was also agreement to insert a proviso that investment in new networks does not create monopolies.


Lawmakers backed Reding's functional separation proposal to boost competition, despite opposition from big operators such as Deutsche Telekom DTEGn.DE, Telefonica TEF.MC and France Telecom FTE.PA who say it would be a disincentive to investment and create legal uncertainty.

Functional separation involves running the network and retail arms of an operator as separate businesses so that rival services have the same access to the network, for a fee. It has been introduced in Britain with BT BT.L.

“That is a positive for us though it has been watered down,” said Ilsa Godlovitch of ECTA, which represents new entrants into the telecoms sector. “There are now additional barriers put in which could prevent it from being an attractive option.”

Introduction of functional separation by a national regulator would have to be reviewed by BERT and the European Commission, creating a delay of about three months, Godlovitch said.

Lawmakers also voted in favour of putting more emphasis than Reding had on new entrants bearing some of the risk and cost of using next generation networks built by other operators.

Big operators are set to welcome this change but Godlovitch said it may put off some new entrants coming into the sector.

Reding’s plans for the Commission to have a say in managing spectrum or radio frequencies were also changed as the industry committee voted to keep national control of spectrum though with some move towards pan-EU coordination of management.

Operators would have to inform customers if their access to services is restricted, such as through speed of connection.

“We have also provided a general provision for public authorities to provide public service information to subscribers about illicit or harmful uses of the Internet but there is no requirement for any policing or reporting action,” Harbour said.

“Some people have suggested this amendment opens the door for an ISP (Internet service provider) to police the Internet. This is absolutely not the case,” Harbour said.

EU president France expects to reach a deal among the bloc’s member states in November. (Editing by Gary Hill)