EC: Telcos must give superfast access
September 23, 2008
Leading European telecoms companies should give rivals access to their superfast broadband networks, the European Commission has said. But in a draft recommendation for national telecoms regulators, the Commission also highlighted the importance of ensuring that Europe's former fixed-line phone monopolies are able to secure appropriate returns on their high-speed broadband investments.Viviane Reding, European telecoms commissioner, and Neelie Kroes, competition commissioner, on Thursday expressed concern that the EU was lagging behind leading industrialised countries, such as Japan and the US, in the rollout of high speed broadband networks. "We want national rules that will not only encourage the necessary substantial investments in fibre but also strengthen broadband competition," said Kroes.To encourage fibre networks, the Commission said telecoms companies should be able to achieve returns of their investments in excess of their 8-12 per cent average cost of capital. Europe's former fixed-line monopolies are nervous about making fibre investments because of uncertainty over returns. BT said in July that it would only build a £1.5bn (E1.9bn) fibre network if the UK telecoms regulator allowed appropriate returns. Those returns will be partly determined by the prices that the regulator lets BT charge smaller rivals for gaining access to the fibre network so as to provide broadband services.