Commission split over telecoms 'unbundling' 

According to the plan, under preparation by the services of Commissioner Reding, telecoms would be forced to undergo a shake-up similar to that foreseen in the European energy sector (EurActiv 20/09/07). 

The Commission made clear last week that it prefers European energy giants to have their network activities fully separate from production and supply. This practice is known as 'ownership unbundling' and would involve either the sale of network assets or a split in the shareholding structure to keep the two activities separate.

By contrast, the plan under preparation by Commissioner Reding foresees only a 'functional unbundling' for the telecoms sector. Companies such as Telefonica in Spain or Telecom Italia in Italy would have to leave the management of their networks to external companies, but would not be forced to sell. This is meant to facilitate other competitors' entry into the market.

But Industry Commissioner Günter Verheugen and Competition Commissioner Neelie Kroes opposed it, saying that it could increase the bureaucratic burden for companies without bringing significant benefits for competition and consumers.

An internal document sent by Kroes to her colleague, seen by the Financial Times, says "functional separation does not prevent discrimination of alternative operators", a critical position shared by Commissioner Verheugen.

Both also expressed sharp views about the idea of setting up a new European telecom regulator, which is also part of Reding’s plan (EurActiv 5/09/07). "It will just create confusion," said Kroes in the internal document, questioning the need for a new authority with an expected staff of at least 100 people.

Reding's spokesperson Martin Selmayr tried to play down the disagreement. "There is no division between Commissioner Reding and Commissioner Kroes. There is only a debate that is part of the legislative procedure," he told a regular press briefing on 25 September. "Arguing about sharp disputes is completely false. I can tell you the two Commissioners get along very well, and have also the same hairdresser," Selmayr added.

Commissioner Reding has already taken a tough stance against telecoms operators earlier this year by forcing them to significantly cut down their international mobile-call fees (EurActiv 24/05/07). Commissioner Kroes strongly campaigned only a week ago about the need for ownership unbundling in the energy sector.