The European Commission also wants EU states to bolster their coordination for the security of underwater cables it said were “potentially under threat in the context of the war in Ukraine and tensions with Russia”.
The telecoms sector has long called for the EU to heed its demands for a revamp of the industry with massive investment for better infrastructure.
The commission proposes ways to make cross-border operations easier for telecom firms and to fund the necessary upgrades to infrastructure including the rollout of 5G.
The plans are in a document that will form the basis of a new law but the EU invites feedback until June 30 before any regulation’s creation.
“The telco sector suffers from a fragmented marketplace, a lack of single market,” European Commission vice-president Margrethe Vestager said during a press conference.
The current law is “20 years old, it has worked well, but it dates back to the era of copper networks”, said the EU’s internal market commissioner, Thierry Breton.
Vestager pointed to connectivity gaps at borders as well as “27 national markets with different network architecture, different levels of network coverage, different national spectrum markets and management”, and to a certain extent, even regulation.
“Only if we remove all these differences, we can see the emergence of a true single market for telco,” Vestager said, adding that “true pan-European players…will emerge stronger”. Currently, there are around three or four operators in most EU states.
Vestager said the obstacles for the sector were not competition rules, but “the burden of having to deal with different regulations”.
After a draft of the document leaked last week, there had been speculation that it meant the EU would ease merger rules but officials dismissed this interpretation.
Vestager’s comments come a day after the EU approved a merger of Orange and MasMovil in Spain, on condition they take steps that would also strengthen their competitor, Digi.
The European telecoms lobby group Etno welcomed the proposals.
“With the transition to gigabit infrastructures, 5G, cloud-defined networks, and AI-automation, Europe’s telecom and competition policy needs a paradigm shift in light of the new market and technology reality,” the group said in a statement.
The document also leaves unsettled a row over fees between big tech and telecom firms since it hints that other players may need to shoulder some of the costs.
“The Commission may consider broadening the scope and objectives of the current regulatory framework to ensure a regulatory level playing field and equivalent rights and obligations for all actors and end-users of digital networks,” the paper said.
Telecom companies want “fair share” payments from the world’s biggest web companies, for the large amounts of bandwidth they use.
Tech companies oppose this, arguing it would force customers to pay twice, first for internet access, and then through higher costs for streaming and cloud services.
CCIA, one of the main tech lobbying groups, warned that “parts of the paper could serve as a favour for incumbent telecom operators who want to resurrect their rejected ask for network fees in a different shape or form in the future”.
The group’s executives did not pull any punches.
“Europe needs to support the connectivity sector as a whole, not prop up a few companies unwilling to compete fairly,” said CCIA Europe head, Daniel Friedlaender.