- PARIS: The bosses of Europe’s major telecom companies urged regulators to adopt a lighter touch on big industry mergers and allow them to charge major websites like Google to prioritise their traffic on networks.
These and other recommendations were put forward by a group of industry executives at a conference in Brussels held by the European Commission to look at why investment in high speed broadband was lagging across much of the continent.
Neelie Kroes, the European Commissioner for the digital agenda, asked the industry in March to come up with proposals to address growing concerns among governments that telecom operators were not building out fiber optic networks quickly enough, putting the region’s long-term economic competitiveness at risk.
After several months of talks, the executives, led by Vivendi Chief Executive Jean-Bernard Levy, Alcatel-Lucent CEO Ben Verwaayen, and Deutsche Telekom boss Rene Obermann, ended up delivering eleven policy prescriptions.
“The mission was difficult but we did come up with concrete proposals and saw a surprising level of consensus,” said Levy.
“Now we need an effort on the part of all concerned to get where we need to go.”
Kroes presented a more nuanced view of the meeting’s results in her statement, signalling that considerable differences remained over how to balance the operators’ desire to seek profits, and the public interest in having strong communications infrastructure.
“This sometimes painful ‘catharsis’ has not resulted in a consensus view... but it has certainly helped to build mutual understanding,” Kroes said.
The European Union has set ambitious targets to bring basic broadband to all Europeans by 2013 and by 2020 half of all households should have access to fast broadband above 100 megabits per second.
But those goals could remain out of reach because many telecom companies across the region have not begun building fiber networks, despite pledges to spend billions of euros on rollouts.
Major companies like France Telecom and Deutsche Telekom have complained that they will end up having to share their networks with rivals, even after having shelled out to build them.
As a result, many are content to rely a bit longer on older broadband networks with their assured cashflows rather then spend heavily on new infrastructure.
At Wednesday’s meeting, the industry executives cast themselves as eager to invest as long as regulators create conditions favorable to making broadband buildouts profitable in the long-term.
The executives asked for uniform European-level rules to reduce regulatory uncertainty and for governments not to stand in the way of mergers and network-sharing initiatives that can help telecom operators achieve scale to better compete.
The industry also urged European regulators to grant them more leeway to sign corporate agreements on so-called “traffic management,” by which operators favor some data flowing over their networks above others.
But this approach remains controversial with consumer advocates and some technology experts, who say such practices are unfair and will lead to a two-speed Internet.
At the debate, traffic management was one of the thorniest issues discussed, according to participants. Levy said that a Google executive asked telecom operators whether the Internet giant would be pressured to sign such deals to which he replied: “Yes, you can say no.”
For her part, Kroes said in her statement the commission would be closely monitoring such practices to determine if more safeguards were needed.
France Telecom CEO Stephane Richard has been vocal in his support of finding ways to make the Internet pay, arguing that telecom companies shouldn’t bear the cost of building networks alone while tech giants like Apple and Google skim off all the profit from running services over the Internet.
The industry’s recommendations skirted another approach favored by some consumer advocates and technology experts: building one fiber network per country or region and then allowing operators to rent space over it and compete more on the basis of consumer offerings than the networks.
Most big telecom operators oppose this because they fear being reduced to the role of a utility, stripped even of its main asset, the network.

