EU set sights on telecoms sector with shake-up

(BRUSSELS) - After taking aim at Europe's energy giants, the European Commission is training its sights on the telecoms sector with sweeping plans that could see some of the biggest operators split up.

Eager to inject more competition into the fast-growing industry, EU Communications Commissioner Viviane Reding is also to publish a blueprint for a new pan-European regulator in proposals to be unveiled Tuesday.

The most radical measure would see Europe's telecoms giants isolate the management of their networks from other parts of the company, thus ensuring equal access to competitors and subsidiaries.

The proposal would be a "remedy" put at the disposal of national telecoms regulators to improve competition but with the intention that it only be used as a last resort.

The Commission, the EU's competition regulator, has tried to go further with Europe's energy majors by attempting to force gas and electricity suppliers to "unbundle" their power generation activities from transport services.

Nevertheless Neelie Kroes, the EU executive arm's top competition official who was behind the plans to break up the energy groups, maintains that the telecoms sector is "different", as some competition is already happening.

But industry, in the form of the European Telecommunications Network Operators' Association (ETNO), sees the so-called "functional separation" remedy as a threat to investment.

"Although its aim is to promote competition, the remedy of mandatory functional separation may result in recreating a de-facto monopoly and discourage risky investments in new access networks," ETNO said Monday.

It cited a study suggesting that some 10 billion euros (14.7 billion dollars) in investment could be compromised over the next nine years.

France Telecom chief of regulatory affairs Jacques Champeaux has expressed concern about a possible slowdown in the setting up of new fibre optics networks.

He said the Commission was heading "in the wrong direction" and was even in danger of slowing down the very competition that it was trying to promote.

The second pillar of Reding's plans Tuesday is the creation of a "European Telecom Market Authority" to better regular services like data roaming, Internet broadband access and mobile telephone use on aircraft and ships.

Ed Richards, the head of British regulator Ofcom, has already criticised the idea as creating a "new super-regulator," and said that existing structures are already capable of doing the job.

Reding will also propose improvements to consumer rights, such as the right to switch telecom operators within one day.

And she will unveil a "New Deal" for the radio frequency spectrum, with the aim of ensuring "broadband availability for everyone," including in non-urban, rural and remote areas of the 27 EU member nations.

Reding hopes to see the measures take effect early in 2010, once they have been endorsed by the EU countries and rubber stamped by the European Parliament.