European Union lawmakers are not giving much hope to large telecom companies for lighter regulation that was supposed to encourage investment in high-speed internet networks, YahooMovies reported. The EU wants expansion of fiber-optic networks to meet growing demand for data services and ensure Europe does not lag behind other regions in technological developments. But regulators are struggling with how to balance fostering competition while relaxing rules that force established operators to open up their networks to competitors.
The European Parliament’s Industry committee voted on Monday to limit the regulatory incentives given to operators who jointly invest in new networks while giving regulators greater powers to force companies to provide rivals with access to their networks. The costs of deploying fiber optic connections into households are high. Network operators such as Orange, Deutsche Telekom and Telecom Italia have long complained that the current rules forcing them to open up their networks to competitors at regulated prices do not allow them a suitable return on investment.
Smaller telecom companies such as TalkTalk and Fastweb had warned that the proposed co-investment rules would be detrimental to competition, which they say is the real driver for investment. Monday’s vote is not final and will need to be reconciled with the position adopted by member states on planned telecom reforms still under discussion.
The lawmakers also voted to give telecom regulators the power to force incumbent operators to open up their networks to rivals where the incumbents hold a jointly dominant position. Such a move would create the possibility that large cable operators such as Liberty Global could become more tightly regulated.
Only companies with significant market power — usually a former state monopoly — are currently forced to give rivals access at regulated prices. The Commission had argued against the measure, saying it could hamper the expansion of gigabit speed fiber networks, and impose a heavy regulatory burden on new networks in countries such as France, Spain, and Portugal.
Telecom lobbying group ETNO, which represents companies like Orange, Telefonica and Deutsche Telekom, said it was “extremely concerned” by the law’s progress. “Today, all the main investment-conducive measures … appear under threat and some investment-distracting proposals have been introduced in the legislative debate. Unless this departure from the original objectives is swiftly addressed, we risk sending a negative signal to the investment community, in a major regulatory about-face,” ETNO said in a statement.
Reader Interactions