Spain’s Proposed Broadband Regulations May Be Illegal, Europe Warns

The European Commission has criticised Spain’s telecoms regulator for choosing not to regulate next-generation broadband access. Last month, the Comisión del Mercado de las Telecomunicaciones (CMT) proposed giving rivals wholesale access to Telefonica’s telephony exchanges and infrastructure, just like the local loop unbundling Ofcom required BT (NYSE: BT) carry out through Openreach in the UK. But CMT proposed introducing the regulation only up to a speed of 30Mbps.

Europe’s competition commissioner Neelie Kroes is spooked that rivals may not get access to higher-speed, fibre infrastructure Telefonica (NYSE: TEF) is rolling out later: “If this measure is put in place, alternative operators may be unable to compete effectively with Telefónica. The Spanish consumer is likely to suffer if the broadband market is not competitive.” And media/telecoms commissioner Viviane Reding is tag-teaming Kroes with the criticism: “Regulatory holidays starting from 30 Mb per second are not acceptable for the commission.”

The effect of Spain’s proposals would seem to leave Telefonica with overall control of the market, as higher and higher speeds become the norm. In the UK, Virgin Media (NSDQ: VMED) will roll out 50Mbps next year.

They wrote to CMT on Friday expressing “serious doubts that the measures are compatible with EU law”, called the proposal “unprecedented”. It requested amendments by January 13. The European Commission may be able to order CMT to change the proposal if CMT does not tweak it itself. Release.