European Parliament - agreement on telecommunications reforms

Consensus emerges in EU assembly over telco rules

European Union lawmakers are set to water down parts of plans from the bloc's executive to overhaul EU telecom rules, but will back moves to split operators into business units, lawmakers said on Wednesday.

EU Telecoms Commissioner Viviane Reding wants to inject more competition into the 300 billion euro ($473.6 billion) sector so consumers have a wider choice of faster and cheaper services.

"In the end it's to empower our citizens to let them enjoy better products at lower prices. Where you have competition on the market you get investment, new systems at acceptable prices," Reding told an EU consultative committee.

EU states and the European Parliament have the final say on the package. Parliament's key industry committee votes on it next week and cross-party support has emerged for big changes to the package.

"I think we have now a common view on the essential points," Catherine Trautmann, a French socialist who is steering parts of the package through parliament, told reporters.

Reding's plan for a pan-EU electronic communications authority will be ditched and instead an existing body of regulators from EU states will be enhanced into a Body of European Regulators in Telecoms or BERT.

"I think this is all accepted to a certain extent but there will be discussions on financing of this body," Trautmann said.

Lawmakers will also scrap Reding's plan for the Commission to have a veto over decisions taken by national telecom regulators and instead give BERT the last word, Trautmann said.

There is also cross-party agreement to ensure that investment in new networks does not create monopolies, she said.

LEGAL UNCERTAINTY

But the committee will back Reding's functional separation proposal to boost competition, despite opposition from big operators such as Deutsche Telekom, Telefonica and France Telecom -- who say it would be a disincentive to investment and create legal uncertainty.

Functional separation involves running the network and retail arms of an operator as separate businessess so that rival services have the same access to the network, for a fee. It has been introduced in Britain with BT.

"We will undoubtedly reach a compromise on functional separation on my proposal to keep it as a last resort and that will be explicit," Trautmann said.

Reding's plans for the Commission to have a say in managing spectrum or radio frequencies will also be changed.

"It's national authorities that will retain control," Trautmann said.

Malcolm Harbour, a British centre-right MEP, said lawmakers were also set to introduce a requirement on operators to tell customers if they can't have access to all services.

There will also be a right for public authorities to warn a customer about downloading copyright material or "unlawful or inappropriate" use of services, Harbour said.

Emmanuel Gabla, an official from the economy ministry in current EU president France, responsible for brokering a deal among EU states, said ministers would seek a deal in November.

EU ministers also want states to have the last word on spectrum on their territory but there could be pan-EU guidelines for managing spectrum, Gabla said.

Consensus was also developing in support of functional separation but the legal basis, tasks and funding of the planned regulatory body was still under discussion, Gabla added.