Stable regulatory environment can help drive investment in broadband, says EU Commissioner

Kroes, the EU's Commissioner responsible for the Digital Agenda, said that inconsistent regulatory systems across the trading bloc's 28 member states discourages telecoms companies from operating across national borders. She said, though, that draft legislative measures due to be announced on or around the 10 September should help drive competition in the market and investment in next generation networks.

Regulators should, under the new framework, place "similar obligations" on telecoms companies, regardless of whether those companies operate within the EU, the Commission said in a statement.

"In our forthcoming legislative package we will be formalising a tighter set of the principles for encouraging investment," Kroes said. "These principles were first outlined in July 2012. Now, after a year of intense collaboration with regulators we have refined them, and reached agreement. We are determined to deliver stable copper prices and fibre regulation that reflects market reality.”

"Today’s guidance to regulators just doesn’t give businesses – old or new – the certainty they need to make investments. It’s time to change. The sector needs more certainty to help it invest and grow. I want citizens to start enjoying the benefits of faster, next generation broadband networks. In the absence of public funding to support better broadband, it’s vital that all companies have a stable and consistent system. That is how we can maximise investment and the infrastructure competition that encourages investment,” Kroes said.

The Commission said that telecoms operators need to be incentivised to invest in broadband infrastructure. Kroes said that investment in new infrastructure could be driven by giving owners of 'next generation' broadband networks greater freedom over the prices they can charge rivals to access their infrastructure to provide competing services, whilst also making the price of access to older copper networks more "stable and consistent" across the EU.

"Rather than build their own networks, many companies rent access to existing copper networks, from incumbent companies (former telecoms monopolies), which they package for selling onto individual customers," the Commission said. "This system plays an important role in maximising competition and use of the networks. However, if this system does not function effectively, it can lead to negative consequences."

"For example, if the price is too low this makes it harder for copper network owners to generate the income needed to invest in Next Generation Networks, and reduces the incentive for ‘alternative operators’ to move from renting a network to building their own Next Generation network. This is a frequent problem today," it added.

"Currently the fee to access these copper networks varies greatly from country to country (from €4 to €14 per month, per line/subscriber) based on several diverging calculation methods. The result is unpredictable and unstable access products. This negatively affects the incentives of all companies to make long-term commitments to invest in new next-generation networks, and is, as a matter of principle, unjustifiable in a single telecoms market," the Commission said.