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EU commissioner wants telecoms firms to boost broadband access

Neelie Kroes will tell leading telecoms firms to get on with modernising Europe’s infrastructure or face cut in their earnings

Neelie Kroes, European digital agenda commissioner, will challenge the biggest telecoms firms to invest more in new-generation broadband networks and threaten to cut their earnings on older networks if they do not comply.

On Monday Kroes will tell the chief executives of leading operators such as Deutsche Telekom and France Télécom that they should stop whining about the need for incentives to invest and get on with modernising Europe’s infrastructure.

The EU wants all 500 million Europeans to have basic broadband by 2013 with at least 30 Megabits per second connections by 2020 and half of households able to access bandwith of 100Mbps by the end of the decade. The European Commission estimates this will require investment of €300bn (£257bn).

Kroes believes the former state-owned incumbent operators have generated big profits on the older copper-based networks and this may reduce any spur to invest in fibre. “So I want to restore the incentive for fibre investment,” she will say, without giving immediate details.

According to Reuters, she will add: “It is critical that access charges reflect actual network costs.” The big operators have, however, insisted that a common pricing structure for access (“net neutrality”) prohibits investment and they should be allowed to charge content-providers more for high-quality, high-speed services.

In a separate interview with Cable Europe, the industry journal, Kroes says it “will not be easy to mobilise” the €300bn investment but this is vital for renewing overall European growth. The “very high costs”, she adds, present an obstacle to achieving the targets for super-fast broadband networks.

She says that, with half of all EU households within the reach of cable networks, operators could help achieve the 100Mbps target and urges them to use their lower prices to compete head-on with the incumbents.

“Should cable companies with upgraded networks decide to engage in greater price leadership, adding stronger competitive pressure on traditional telecoms networks, we would obviously welcome that,” she says. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds