Commission lays out plans for broadband infrastructure investment

EU Commissioner Neelie Kroes said the Commission would generally not require national telecoms regulators across the EU to impose "cost-oriented price regulation" on 'next generation' wholesale products. She said, though, that the regulators would be required to act to restrict firms' pricing if new rules on "non-discrimination", to be drawn up before the end of the year, were not adhered to.

"National regulators will no longer be required to apply cost-oriented price regulation in almost all circumstances," Kroes said in a statement. "But the flexibility on 'next generation' pricing will depend on application of the non-discrimination rules to ensure genuine equal treatment of competitors, and on a competitive counterweight from copper-based services or other infrastructures like cable and 4th generation wireless."

Kroes said that "tougher" non-discrimination rules would "ensure that incumbents do not get an unfair advantage" in the telecoms market. "That means mechanisms ensuring competing operators get the same inputs, on equal terms and of equal quality, as the incumbent's own retail operations. Also that their margins are not artificially squeezed. This should enable alternative operators to compete on quality and service, in addition to price," she said.

However, Kroes said that there is "no excuse" for telecoms companies' charging regime for rivals not to be "on an equal footing to the greatest extent possible when they seek comparable access products."

Kroes said a number of different measures would help regulators assess the competitiveness of the market.

"[Regulators] should establish key performance indicators in areas such as ordering, delivery, fault repair, and quality of service," she said. "This would be supported by service level agreements or guarantees; and by a technical and economic replicability test, so regulators can check that an efficient operator would be able to compete with the incumbent's retail product on the basis of the same wholesale access products provided."

"In particular, economic replicability will require a properly-specified ex ante 'margin squeeze' test. This combination of measures will give effective alternative guarantees without recourse to functional separation, which in our view remains a last-resort remedy," the Commissioner added.

Plans to force owners of existing copper telecoms lines infrastructure to reduce the price they charge rivals to access those lines have also been withdrawn. In the policy statement Kroes said that such a measure would not lead to greater investment in new telecoms infrastructure.

"We are not convinced that a phased decrease in copper prices would spur [next generation access] investment," she said. "Indeed, we now see fibre investment progressing relatively well in some Member States where copper prices are around or above the EU average."

Whether the terms of access to the copper infrastructure are fair will also be determined in accordance with the new non-discriminatory rules, Kroes said. The Commissioner said that she would flesh out "durable regulatory guidance" for "formal adoption" before the end of the year and that she hoped the framework would be relied upon "at least until 2020."

"This package will rebalance regulation to focus better on a level playing field; it limits regulatory intervention to what is strictly required; and it takes into account the gradual and difficult transition from copper to fibre networks," she said.