Dump pipes, legacy copper, regulatory regime and delivering content.
Telecoms fear impact of EU regulation
By Stanley Pignal in Brussels
Published: September 23 2010 20:58 | Last updated: September 23 2010 20:58
Senior European telecoms executives reacted coolly to the European Union’s proposals on regulating the next generation of broadband internet networks, warning that excessive regulation could make large-scale investments less likely.
Stéphane Richard, chief executive of France Telecom, said he was “not fully comfortable” with the proposals, released on Monday by Neelie Kroes, EU telecoms commissioner.
They will extend the obligation for large telecoms operators to provide their competitors with cheap access to their infrastructure. Many network owners – often former state monopolies – had hoped they would be able to shed the regulatory regime, which is currently used on legacy copper telephone networks, as an incentive for them to invest the €300bn ($400bn) they say is needed to upgrade internet connections throughout Europe.
“If the underlying philosophy of the European Commission is to look at networks like a commodity, or a utility . . . [next-generation internet] is not the best investment case we can offer our shareholders,” warned Mr Richard at a conference organised by the European Telecommunications Network Operators’ Association in Brussels.
Franco Bernabè, chief executive of Telecom Italia, said he feared that European networks could be turned into “dumb pipes” with little opportunity to profit from innovative web applications delivered by the likes of Google, Skype or Facebook.
Many European telecoms operators, including France Telecom and Spain’s Telefónica, have been lobbying for the ability to charge content providers for delivering content to their customers, an idea that Ms Kroes has said in the past she did not support.
Zeinal Bava, head of Portugal Telecom, said the proposals on competition are “not the right balance. There’s more work that needs to be done to ensure that the industry doesn’t end up in ‘survival mode’”.
Ms Kroes had tried to sound a conciliatory tone as she opened the conference.
“Let me be clear. All investing companies have my strong support in this transition to fibre,” she said, stressing that the access rules only applied to larger networks where there was little competition.
“Our approach is consistent with attractive returns on capital for telecoms companies.”
But she firmly excluded the possibility of “regulatory holidays” demanded by some companies considering investments, which would have allowed them to exploit new networks without granting access at near-cost levels to competitors.
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