New EU Telecom Rules Face Delay After Talks Break Down

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Prospects for a quick conclusion to talks about a change in Europe's telecom rules were dashed late Wednesday with blame for the stalled negotiations leveled at the Czech government by, among others, the author of the reforms, Commissioner Viviane Reding.

The Czech Republic holds the six-month rotating presidency of the European Union. In a meeting with the European Commission and the European Parliament Wednesday evening it held out against an agreement, even though a majority of the 27 countries it was negotiating on behalf of were ready to sign a compromise, according to one person present who asked not to be named.

At a lunch debate Thursday, Reding described the Czech government's failure to secure an agreement as "catastrophic."

"The Parliament understands the need [to create a working single market for telecoms in Europe]. Unfortunately, some member states still think building walls between countries is the solution," she said.

As a result of the stalled negotiations, agreement on the new legislative package, dubbed the telecoms package, has almost no chance of being reached before the European Parliament elections in June.

The package of changes include a proposal to create one regulatory body for the whole E.U., comprising the 27 national regulators. Currently, the national regulators often interpret E.U. telecoms rules differently, and many of them obstruct fair competition by siding too closely with former public monopolies in their territories.

The package also includes plans to redistribute radio frequencies freed up through the transfer to digital TV from analog -- the so-called "digital dividend." The Commission has proposed managing this process in a transparent way at the E.U. level, rather than country by country.

Agreement on these and other issues "was tantalizingly close," according to one person who was at Wednesday's meeting.

"The Dutch government tabled a compromise solution that could have been agreed on, but it wasn't leading the negotiations for the member states, unfortunately," the person said.

There is one remaining three-way meeting between the European Parliament, the Commission and the member states next Tuesday. However, Reding's spokesman Martin Selmayr said the chances of reaching an agreement then could almost be ruled out.

Unlike Wednesday's "trilog" meeting, next week's gathering will not be preceded by the usual preparatory meetings involving diplomats, where the nitty-gritty negotiating goes on.

Instead, the telecoms package will be voted on at a plenary meeting of the European Parliament in late April, and without a negotiated compromise in advance, the parliamentarians will sign up to a text that national governments will oppose.

This means a protracted conciliation process that will stretch well beyond the mandate of the current parliament, Selmayr said.

What it boils down to is a delay of at least six months. That will mean an extended period of legal uncertainty for companies operating in a fast evolving telecoms industry, the person at the Wednesday meeting said.

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