Telecoms fear impact of EU regulation

Senior European telecoms executives reacted coolly to the European Union's proposals on regulating the next generation of broadband Internet networks, warning that excessive regulation could make large-scale investments less likely.

Stéphane Richard, chief executive of France Telecom, said he was "not fully comfortable" with the proposals, released on Monday by Neelie Kroes, EU telecoms commissioner. They will extend the obligation for large telecoms operators to provide their competitors with cheap access to their infrastructure. Many network owners - often former state monopolies - had hoped they would be able to shed the regulatory regime, which is currently used on legacy copper telephone networks, as an incentive for them to invest the €300bn ($400bn) they say is needed to upgrade Internet connections throughout Europe. "If the underlying philosophy of the European Commission is to look at networks like a commodity, or a utility . . . [next-generation internet] is not the best investment case we can offer our shareholders," warned Mr Richard at a conference organized by the European Telecommunications Network Operators' Association in Brussels. Franco Bernabè, chief executive of Telecom Italia, said he feared that European networks could be turned into "dumb pipes" with little opportunity to profit from innovative web applications delivered by the likes of Google, Skype or Facebook.