Proposed EU Law Aims at Next-generation Infrastructure

European Telecommunications Commissioner Viviane Reding will shortly propose a new law designed to encourage incumbent operators to invest in next-generation infrastructure, including high-speed broadband networks, she said in a speech to industry players Wednesday.

The massive task of installing new networks must be overseen by national telecom regulators, she said. The incumbents have been lobbying for what they call a regulatory holiday, to allow them time to establish the new networks and recoup their investments.

Reding said that where a dominant company creates the new infrastructure, they should be scrutinized just as they are in any other market they dominate.

However, she added that the companies must have a financial incentive to make the necessary investment, so they should be allowed to charge a premium of around 15 percent on the price it charges other operators for access to the improved networks, she said.

"In my personal view, these should include a risk premium of around 15 percent," she said.

The European Commission will release a formal recommendation for legislation before the end of July, with the view to getting it adopted in the fall.