Brussels mulls rules to make broadband cheaper

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The European Commission has proposed rules aimed at reducing the cost of building high-speed broadband networks, in a move that shows how Brussels is seeking more power over the telecommunications sector.

The initiative is important because European leaders are worried that debt-laden telecom operators' slow pace of investment is saddling the region with weak infrastructure that over time could hobble its already recession-wracked economies.

It also comes as the EU cuts funding for broadband rollouts. EU budget cuts, which must be approved by Parliament, hammered out in February cut such funding for rural projects to just €1 billion from €9.2 billion.

The draft regulations issued on Tuesday (26 March) require new and renovated housing to be broadband ready, calls for ducts and other infrastructure to be shared among telecommunications companies on fair and reasonable terms, and shortens the permitting process.

It also calls for water, electricity and gas companies to share their underground ducts with telecom firms to cut the cost of creating high-speed broadband networks.

The Commission said digging up streets to lay fibre accounts for up to 80% of the cost of deploying new networks, adding that the new rules would save up to €60 billion.

The construction in Europe of fibre networks lags far behind Asia and some parts of the United States, worrying policymakers who see the infrastructure as a key motor for economic growth. Europe had 5.95 million fibre broadband customers by mid-2012, a fraction of the more than 58 million subscribers in Asia.

About half of Europeans still rely on internet technologies such as ADSL, which offers speeds of up to 30 megabits per second compared with 100 megabits or more for fibre.

Hampering the buildouts, the continent's debt-laden telecom operators such as Telefónica and Telecom Italia are wary of ploughing billions into fibre when the investments will take decades to pay off.

Patchwork of regulations

Another major obstacle has been the patchwork of regulations in the 27 EU member states on how telecommunications firms must share access to ducts and lines into homes, the cost of such line rentals, and also the technology deployed.

A Commission source told Reuters the proposals were not about centralised planning but converging regulatory approaches to make them more consistent.

"In most places, today's rules hurt Europe's competitiveness," European Commission Vice-President Neelie Kroes said in a statement. "Everyone deserves fast broadband. I want to burn the red tape that is stopping us for getting there."

The proposals are part of a bigger package of measures being rolled out by the Commission in coming months to try and deliver a single market for telecom services.

The Commission plans to present its ideas on the single market by October. The proposals may include tighter control of new mobile spectrum and changes to how prices are set for operators to rent out space on the networks of competitors.

Positions

The European Commission should not set specific fees for telecom firms seeking access to traditional copper networks as it would mean consumers paying more in Poland, Austria and eight other EU countries, national regulators said.

The comments by the Body of European Regulators for Electronic Communications, whose members are made up of the heads of 27 EU national regulators, came three months after the European Commission unveiled draft proposals to boost broadband investments in the region.

Established phone companies that operate these networks should have freedom to adjust prices to take into account factors in their domestic markets, the regulators said.

Background

Neelie Kroes, the commissioner overseeing digital and telecoms policy, has been working on proposals covering mobile spectrum, price regulation and mergers - a substantial overhaul of Europe's telecom sector.

Big telecom companies such as Vodafone and France Telecom are backing her efforts in the hope they will help the industry out of a deep slump.

EU leaders asked the European Commission to draw up a plan by October, including "concrete measures to establish the single market in information and communications technology as early as possible."

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