EU may be planning European Ofcom

Businesses and consumers could soon benefit from cheaper mobile phone calls and improved services if EU commissioner Viviane Reding gets her way. Rumoured plans by Reding could see the creation of what would be a pan-European version of the UK communications regulator, Ofcom.

The European Telecom Market Authority (ETMA) would have powers over and above Ofcom's, which it could use to force UK, and other European, mobile operators to allow competitors equal access to their transmission networks.

The hope is that such a move would mirror Ofcom's settlement with BT in 2005. That led to the creation of BT's Openreach division, allowing competitors equal access to telephone exchanges. Called local-loop unbundling, this let rivals put their own communications equipment into exchanges, in turn letting them offer cheaper and faster broadband connectivity.

Analyst firm Gartner's research VP Martin Gutberlet said that countries like Italy and Spain were already investigating the possibility of splitting up former monopoly telcos into network and service companies, but added that he was unsure whether that would necessarily lead to EU super-regulation.

The most likely hurdle to setting up an EU super-regulator was that, "with continuous falling prices for bandwidth, the investment in infrastructure for network operators is getting more difficult and separation of networks and service doesn't necessarily lead to new network investments."

In response to questions about their openness to a new regulator, mobile firms suggested that they would wait and see what happened. A Vodafone spokesman said, "We're deferring to Ofcom for the time being," while T-Mobile refused to comment.

An O2 spokeswoman, however, said that competition, and not regulation, is the best way forward to deliver benefits to the consumer. In a statement, the firm said, "The increased regulation through an extra layer of bureaucracy would curb competition and consumer choice." It said that forcibly separating companies could possibly lead to the undermining of "the stability and predictability that the markets would require in order to make the necessary further investments in next-generation networks."

Orange totally opposes the idea of a super regulator, saying that markets vary greatly in different countries and therefore need their own regulators.

"We feel Ofcom has this knowledge in the UK and a cross-Europe regulator would not," a spokesman said.

Ofcom declined to comment.