Viviane Reding, the Telecoms Commissioner, has criticised the plan, saying that the alternative body would not be able to act quickly enough.
The Industry, Research and Energy Committee (ITRE) of the Parliament approved a report by Spanish socialist MEP Pilar del Castillo which proposes the new agency, the Body of European Regulators in Telecommunications (BERT) as an alternative to the Commission's proposed European Telecoms Market Authority (ETMA).
The Commission announced its proposals for ETMA last November, when it said a pan-European body was needed to break the government-endorsed stranglehold that some dominant operators still had.
"Dominant telecoms operators, often still protected by government authorities, remain in control of critical market segments, especially of the broadband market," said Reding in November. "This restricts consumers' freedom of choice."
De Castillo said, though, that the ETMA placed too much power in its own hands. "The objective of BERT is to develop in a flexible, efficient and non bureaucratic way prime conditions for the telecom market so that the latter may operate solely under general competition law," she said. "Let's not create a cumbersome body which lobbies for its own existence."
In de Castillo's report she said that BERT would allow national regulators (NRAs) to retain their role in regulation.
"The current balance of power between the Commission (‘guardian’ of markets definition and significant market power designation) and NRAs (responsible for implementation at local level) has worked reasonably well. However, there is room for improving the consistency both regarding national decisions with internal market impact and the application of remedies," she wrote.
"The most appropriate means to ensure consistency and effectiveness in a system where competences are distributed is through co-regulation. Only with such a cooperative and collaborative approach between the Commission and NRAs can results be achieved without altering the delicate institutional balance of powers or undermining the subsidiarity elements of the regulation. The Commission should play more the role of arbitrator and facilitator rather that of judge or sanction-taker," said the report.
It is exactly this co-regulation that attracted criticism from Reding after the vote. "Businesses and consumers in Europe are interested in results, not in lengthy procedures," said Reding. "I have doubts whether BERT and the heavy Article 7-procedure now created will be able to deliver coherent regulatory responses to the regulatory obstacles still far too present in Europe's single telecoms market. Questions remain especially as regards the financing of the new Body as well as its capability to arrive swiftly and efficiently at common positions."
Unlike ETMA, BERT would not be funded directly out of European Commission funds but by the national regulators themselves.
The committee's proposal will go before the full Parliament in September, then before the Council of Telecoms Ministers in November, at which point it could become law.
The creation of a new regulatory body is just one aspect of a package of telecoms reforms. The Parliament's ITRE Committee and Internal Market and Consumer Protection Committee (IMCO) were largely in agreement with other Commission-proposed reforms, including granting national regulators the right to force incumbent operators to separate their network and service businesses.
The Committees also agreed with Commission proposals to enhance transparency of billing and pricing and to improve number portability when consumers switch service providers.