EU to move on telecom market reform

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BRUSSELS -- European Union information society commissioner Viviane Reding pledged Tuesday to announce plans this summer to reform Europe's telecoms market regulation, paving the way for competition from new entertainment services.

The move is expected to kick-start broadband and cable television operations across the EU that have so far been held back by former state-run monopolies.

Speaking at the fringe of a ministerial meeting in Berlin about the possibility of an independent telecoms regulator, Reding said she was already consulting with the EU's 27 national regulators about how best to move forward. "The heart of the issue is the lack of a truly competitive single market for telecommunication infrastructures and services in Europe that boosts growth, jobs and consumer interests in Europe," she said.

The EC is also considering a number of far-reaching options to overhaul the way various government regulatory bodies operate. They include a central European regulator, or an overhaul of the way national regulators work to bring them closer to the commission.

Reding is thought to be leaning toward a European version of the FCC in the U.S.: a tough watchdog to force more competition in the EU's €270 billion ($351.7 billion) a year communications sector and ensure that market rules are applied consistently across national borders.

A draft document prepared for the commissioner on the planned "European FCC" says: "The core objectives ... would be to promote competition, investment and consumer interests." It adds that members "shall be independent from ... national governments and from any other body."

The moves come after years of frustration over government protection of former state-controlled telecoms companies at the expense of newer competitors in EU telecoms markets. The EC is in a face-off with the German government after Berlin allowed Deutsche Telekom to bar rivals from a €3 billion ($3.9 billion) broadband network the company is building.

Under the plan, the new regulator would be made up of national telecoms watchdogs from the EU's 27 member states. EC officials insist an EU-wide regulator would be a temporary body that would be disbanded once the transition to a single competitive telecoms market is over.

Last June, Reding unveiled proposals aimed at forcing the former state-run monopolies to split their services and infrastructure into two separate companies in a bid to spur competition among cable, telecom and other operators over new services like wireless technology. Reding pointed to the U.K., where the national regulator had put in a similar system with BT Group, spurring a boom in broadband.

Reding says a single European regulator would help all 27 nations toe the same line as they open up telecoms markets. Many EU countries have been slow to make changes that would see former state monopolies cede ground to new Internet, cable and telephone rivals, causing wide differences across the continent, with the Dutch and Danes far more likely to have broadband access than the Irish or Greeks.
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