March 23, 2018 / 7:58 PM / a month ago

Wholesale broadband providers to be spared heavier EU regulation

BRUSSELS (Reuters) - Wholesale broadband service providers will be spared from stricter EU regulation of prices at which they give other operators access to their networks under a deal provisionally agreed this week.

European Union member states and the European Parliament are in the midst of negotiations over an overhaul of the bloc’s telecoms rules with the aim of boosting investment in super fast broadband.

The European Commission, the EU’s executive body, had initially proposed a lighter regulatory model for wholesale-only broadband providers who do not offer consumers their own retail broadband package, such as Italy’s Open Fiber and Siro, a joint venture between Vodafone (VOD.L) and Ireland’s Electricity Supply Board.

The proposal, which was aimed at encouraging more companies to adopt the wholesale-only model, was agreed in talks on Wednesday, according to an internal parliamentary note seen by Reuters. However, it will only become final once a deal is struck on the whole package.

Wholesale broadband providers will be exempt from most of the obligations that regulators usually impose on dominant telecoms providers. Regulators will only be able to impose obligations on “fair and reasonable pricing” if justified by a “market analysis”, according to the text of the deal seen by Reuters.

Telecoms companies such as Telecom Italia (TLIT.MI), Deutsche Telekom (DTEGn.DE) and Telefonica (TEF.MC) have argued that current rules requiring them to open up their networks to competitors at regulated prices do not allow them to get a return on investment.

The Commission proposed easing the rules where firms agree to co-invest in new networks together, but the European Parliament and member states are still trying to find a compromise.

EU lawmakers want to ensure that a co-investment agreement has actually been concluded before easing regulation.

    Reporting by Julia Fioretti; Editing by Susan Fenton

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