Members of the European Parliament look set to back plans for a major overhaul of the European Union's telecom laws after two committee votes on the matter late Monday, although many of the European Commission's original proposals have been watered down.
Former monopolies that don't grant smaller rivals fair access to their phone networks may, under the proposal, be punished by a forced separation of their infrastructure from their services.
Parliamentarians sitting on the industry and internal market committees also supported the idea of a Europe-wide regulator. However, the body they envisage would not be as powerful as the one proposed by the Commission - Europe's executive body.
The industry committee voted to create a Body of European Regulators in Telecommunications (BERT), composed of the 27 national regulatory authorities, instead of the European Electronic Communications Market Authority (EECMA) advocated by the Commission.
The BERT would work together with national telecoms authorities and the Commission to ensure that laws are applied consistently throughout the EU.
The Commission originally planned to make EECMA a powerful EU-wide body modelled on the US Federal Communications Commission, with power over competition and security issues, but national governments as well as member of parliament (MEPs) are uncomfortable about creating such a huge central regulator.
The Commission also wanted to have veto power over the new body, but MEPs made clear in the two committee votes that the last word in telecom regulation will remain with the BERT, rather than with the Commission.
This means that the Commission will not be able to take action against a national regulator it suspects of misinterpreting EU rules without the support of the BERT.
Telecoms operators were divided in their reactions to the committee votes. Neither the former monopolies, nor the younger rivals competing with them, were satisfied with the results, which appear to balance out the interests of the two.
ETNO, the European Telecommunications Network Operators' association, said in a statement released Tuesday that the inclusion of the functional separation remedy in the framework "is a deterrent to investment and not the right approach for favouring infrastructure-based competition."
Meanwhile, ECTA, the European Competitive Telecoms Association, welcomed the inclusion of the remedy, but complained that it has been made less effective. Both the Commission and the BERT would have to approve the penalty, delaying its imposition by roughly three months, ECTA said.
"There are now additional barriers put in which could prevent [functional separation] from being an attractive option," said Ilsa Godlovitch, an ECTA spokeswoman.
A third core reform proposed by the European Commission is to manage the redistribution of radio spectrum at an EU level, in particular that being freed up by the transition from analog to digital broadcast TV.
However, MEPs on the industry committee voted to leave responsibility with national regulators, who should then coordinate radio spectrum policy with regulators in other EU countries.
After making the initial proposals, the Commission must now take a back seat, while the two legislative bodies - the European Parliament and the Council of national government ministers -- make final changes to the law.
The package of telecoms reforms will be debated and voted on by a full session of the Parliament in September. National government ministers are then expected to give their opinion to the proposed changes at a meeting in November.