Europe cautious over new telecom proposal

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BRUSSELS -- The European Commission's promise of better and cheaper telecom services -- from mobile phones to faster Internet technology and cable television -- is being greeted with a mixed welcome across Europe.

Cable operators, regulators, operators, Euro-MPs and consumer groups were cautious about the proposals unveiled by the commission Tuesday that are designed to open up Europe's electronics communications sector and create a single market of 500 million consumers.

The proposals include setting up a European Telecom Market Authority to streamline communication services across the 27 EU countries. The commission hopes the measures, which require approval from EU governments and the European Parliament, will become law by 2010.

Cable Europe, the European cable operators' association backed the commission's plans to increase the efficiency of radio spectrum management as digital switchover got underway. But the group was more wary about plans allowing EU governments to force telecom operators to split their network and business activities -- known as "functional separation" -- and also questioned the need to create a pan-European regulatory body for the telecom industry.

The European Regulators' Group -- which faces a radical shake-up under the plans -- said it supports proposals to boost regulators' enforcement powers. But it warned that the commission itself was seeking to centralize powers and undermine the very independence it aimed to protect.

"The commission's proposals for a new institutional set-up appear, at first sight, not to be in line with the evolution of the cooperation amongst regulators toward a federal and non-bureaucratic model," the ERG said.

The European Competitive Telecoms Assn., which brings together new, market-entrant telecoms operators, said the proposals will result in tangible growth in investment and competition in high-speed broadband.

"The proposed framework provides the tools to ensure the smooth roll-out of Next Generation Networks, and the sharing of the substantial costs required to deliver them," ECTA chairman Innocenzo Genna said.

The European Telecommunications Network Operators' Assn., which encompasses former state-owned telecoms monopolies including Deutsche Telekom and Spain's Telefonica, said the move to allocate radio spectrum for new services could boost new services and stimulate wireless broadband. But ETNO director Michael Bartholomew said that forcing operators to split networks and business activities "would result in increased costs for access and less investment in new and alternative networks."

A spokesman for Deutsche Telekom was more critical: "The commission's proposals will lead (to) the cessation of millions of euros of investment," he said.

Angelika Niebler, chair of the European Parliament's Industry Committee, warned the commission to limit its own role.

"Many details still need clarification, especially as far as the commission's plans to gradually extend its own competences are concerned," said Niebler, a German Christian-Democrat. She was echoed by British Conservative Malcolm Harbour, who said, "The commission has got carried away with big ideas of building a new power base, instead of leaving local regulators to get on with the job."

German Green Euro-MP Helga Truepel, vice-chair of Parliament's Culture Committee, said the proposals were too market-oriented and risked undermining the current balance between public and private broadcasters. "We must ensure that the current cultural and media diversity is not undermined," she said.

BEUC, the European consumers' association, welcomed proposals to bring forward consumer rights in the telecom sector, but said the measures were aimed at offering physical infrastructure, not the services. "The ultimate goal of this package should be to ensure, for all consumers, safe, affordable and fair access to all telecom services," BEUC director Jim Murray said.
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