Watchdogs seek to thwart EU telecom authority plan

BRUSSELS, Feb 26 (Reuters) - Europe’s national telecoms regulators will propose a beefed up role for themselves in a bid to thwart European Commission plans for a new pan-EU watchdog, officials with knowledge of the situation said on Tuesday.

The European Regulators Group (ERG) is expected to make public its proposal on Wednesday, to coincide with a European Parliament hearing on the European Union executive’s plans to shake up the bloc’s telecoms rules.

EU Telecoms Commissioner Viviane Reding has proposed a new electronic communications market authority, but national watchdogs and some lawmakers say it could end up being a Brussels-based bureaucracy, isolated from markets.

“You can characterise this as a counter-proposal that envisages a strengthened ERG,” an industry source said.

The ERG was not available for comment, but its plan -- which big EU states such as France, Britain and Germany are likely to back -- is expected to focus on strengthening the ERG to ensure better coordination rather than setting up a new body.

EU states and parliament have the final say on Reding’s proposals, and so far her plan for a new watchdog is struggling to win enough cross-party backing to be adopted unchanged.

“I don’t think that will be something supported by the European Parliament,” said Malcolm Harbour, a British centre right lawmaker, referring to the Reding plan.

Separately, Europe’s top telecoms operators called on Tuesday for another of Reding’s proposals to be scrapped, saying “functional separation” would hinder investment and create state run companies operating in the shadow of heavy regulation.

Functional separation refers to a telecoms company running its infrastructure and services as separate units, with the aim of boosting competition by allowing new entrants to use the infrastructure on the same terms as its owner.

Under the proposal, regulators could enforce such separation as a last resort if other measures to boost competition fail.


Michael Bartholomew, director of The European Telecommunications Network Operators' Association (ETNO), which represents former state monopolies like Deutsche Telekom DTEGn.DE and France Telecom FTE.PA, attacked the plan as "Stalinesque".

“The regulator is running the show when you have a functionally regulated entity. That is unacceptable and puts off investors,” he told reporters.

Reding dismissed the criticisms.

“It’s not mandatory. Let the independent regulators decide what they want to do. Just to say some slogan like this is not contributing to the seriousness of the debate,” Reding told reporters.

“I don’t want to argue with a lobby. They are doing their work in order to try to postpone any opening up of the market.”

ETNO said a fundamental concern with Reding’s shake up was that it did not stress that telecoms regulation was transitory and that general EU competition rules would come into force once there was enough competition.

Reding said that last year she had slashed the number of market segments that come under specific EU telecoms rules, as big operators wanted. (Reporting by Huw Jones; Editing by Catherine Evans)