Newspaper article International Herald Tribune

Phone Giants in Europe Get a Boost

Newspaper article International Herald Tribune

Phone Giants in Europe Get a Boost

Article excerpt

A steady decline in phone bills in Europe may have ended with the European Commission's decision to give the biggest operators greater leverage over what they can charge competitors for access.

The era of steadily declining phone bills in Europe, which began with deregulation of the industry in 1998, may have drawn to a close this month, with the European Commission's decision to give the biggest operators greater leverage over what they can charge competitors for access to their landline networks.

Neelie Kroes, the European commissioner for telecommunications, signaled the new era July 12 when she announced that further cuts in wholesale access charges, a basic type of regulated fee that operators receive from rivals, would discourage network investment and thwart the commission's goal of creating a superfast broadband grid by 2020.

The decision by Ms. Kroes, a Dutch policy maker who served as the European Union's competition commissioner from 2004 to 2010, drew praise from big operators and criticism from smaller carriers, most of which lack national coverage of their own and must lease access to a former monopoly's landlines to deliver their services to customers.

Besides giving operators more pricing power over their older copper networks, Ms. Kroes said she might permit them to ban competitors temporarily from the new, faster fiber networks that are crucial to fulfilling the commission's broadband aspirations. The announcement was an about-face in European policy.

Ms. Kroes's predecessor, Viviane Reding, who is now the European justice commissioner, had sued Deutsche Telekom over its decision to ban competitors from its new fiber grid, which uses a technology called V.D.S.L.

Ms. Kroes, an economist and member of the Dutch free-market People's Party for Freedom and Democracy, has taken a softer tone with Deutsche Telekom, France Telecom, Telefonica and Telecom Italia than Ms. Reding, a Luxembourg conservative who in 2007 pushed through the first European retail price controls on mobile roaming charges.

Whether the new incentives translate into new networks is up for debate.

The European Union is far from its goal of wiring the 27-nation bloc with superfast broadband. …

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