MEPs in the European Parliament’s Industry Committee (ITRE) approved a sweeping telecoms bill on Monday (2 October) that watered down an EU proposal to spur network investment and added a controversial price cap on calls between member states.

The Parliament’s changes to the bill have upset large telecoms operators that supported part of the European Commission’s proposal last year to lighten regulation of firms if they prove they are investing in new network infrastructure with competitors.

The committee’s version of the bill also deals a blow to a Commission strategy on spurring investment by rejecting the carrot-stick approach of extra-soft regulation in exchange for companies’ cash.

Socialist, Green and Liberal groups won a victory by outlining conditions for so-called co-investment deals in the ITRE committee’s draft. The bill now requires firms’ investment plans to meet stricter criteria before national watchdogs can roll back regulations.

MEPs approved the bill Monday evening with 52 votes in favour, two opposed and eight abstentions.

The legislation must be agreed in three-way trialogue negotiations with the Commission and national governments before it can go into effect.

“This is a dossier which will have an impact, I am sure, on the future of digitisation in Europe. Infrastructure is crucial,” Pilar del Castillo, the Spanish centre-right MEP who authored the committee’s draft of the bill, told the committee after the vote.

Miapetra Kumpula-Natri, the Finnish Socialist MEP who negotiated the bill for her political group, took credit for the change to the Commission’s proposal on investment rules.

“S&D position on co-investment carried. Happy of the overall result and looking forward to trilogues,” Kumpula-Natri tweeted.

The Commission intended for its proposal on co-investment to force telecoms companies to invest more money into faster internet networks.

The EU executive proposed the legal overhaul in September 2016, when it also published a strategy paper on boosting the minimum household internet speed across the bloc to 100 megabits per second by 2020.

Schools, transport hubs and public service providers should have connections of at least 1 gigabit per second by 2025 according to the Commission’s goals.

To reach those speeds, the Commission calculated a total investment need of €500 billion, and a likely gap of €155 billion. The new proposal aimed to encourage companies to open their pockets.

Most of that money will come from private companies. But industry groups warned that the Parliament’s changes to the legislation will have a chilling effect on companies’ willingness to invest.

“Without real spectrum reform and unequivocal incentives to invest or co-invest, we will miss the gigabit society objectives,” ETNO, a lobby group representing big operators including Deutsche Telekom and Orange, said in a statement.

Price cap for international calls

Another part of the ITRE draft that will cause upset in the Commission and among telecoms firms is a new measure to cap the price of calls between EU countries.

The addition is a bold change to the Commission’s proposal: MEPs added a strict limit to prevent companies from charging higher rates for calls or text messages to other EU member states than consumers pay for services within their countries.

Andrus Ansip, the Commission vice-president, and Mariya Gabriel, the Commissioner in charge of digital policies, have said they do not see a need for regulating fees for those services.

For MEPs, lowering the price of calls and text messages within the EU offers a legal change that could be popular with voters.

Some have argued that lowering international rates is the logical next step after the EU ban on mobile roaming fees went into effect this past June.

“Now that consumers no longer pay high costs when using their smartphones when travelling, they also expect abusive prices of calls while they are home to disappear,” Monique Goyens, director of the European Consumer Organisation, said after the vote.

Prices for calls between EU countries can range from 65 cents to €1.50 per minute for consumers with Belgian phone contracts or up to 83 cents per minute for Lithuanian consumers, according to 2016 data from consumer groups.

So far, the Commission has argued that there is no need for EU regulation on those rates because consumers increasingly use internet-based services like WhatsApp or Skype instead of making traditional phone calls or sending text messages.

MEPs are heaping pressure on the Commission and member states to approve the cap on international call rates once negotiations between the institutions start this autumn. A second Parliament committee already backed the price cap last month.

Commissioner Gabriel told a news conference last week, “I follow very closely on that [the international call debate in Parliament] and when it’s the time for that we will make a decision.”

MEPs quash Commission proposal for EU agency

Separately, the ITRE committee also approved another bill Monday evening on changes to BEREC, the group of EU national telecoms regulators. Last year, the Commission proposed a drastic overhaul to turn the group into a full-blown agency, but the committee rejected that change and largely sticks to BEREC’s current status.

The Commission wanted to upgrade BEREC’s legal status and give it a 75% budget increase. National regulators are set to receive more power to police telecoms firms, and will sign off on co-investment agreements under the broader draft rules that were also approved Monday.

But Evzen Tosenovsky, the Czech conservative MEP who authored the bill, argued that the Commission’s proposal would have given the EU executive too much power over national regulators. The Commission proposed hiring a BEREC executive director, who would be on the Commission’s payroll, and giving the EU executive voting rights in regulators’ decisions.

“My main goal was to safeguard the independence of national regulatory authorities,” Tosenovsky said.

He told EURACTIV.com he will still fight to give regulators some additional resources.

“In the upcoming negotiations, however, I will claim that the new set of tasks assigned to BEREC by the Code (Pilar del Castillo’s report) should be mirrored in adequate staffing and budgeting for the BEREC Office,” he said.