The European Commission today (12 September) adopted a wide-ranging reform of EU telecoms rules which contains both consumer measures and efforts to make it easier for telecoms firms to compete in the entire single market.

The package, which will be presented tomorrow, was a legislative centrepiece in Commission president Jose Manuel Barroso’s state of the union speech today in Strasbourg. The proposal will need approval by member states and the European Parliament.

“Isn’t it a paradox that we have an internal market for goods, but when it comes to digital we still have 28 national markets?” he asked. “The strength of Europe’s industrial base depends on connectivity.”

There is currently no telecoms company that operates across the whole EU, and both operators and customers face differing prices and rules. European digital growth is the slowest among advanced economies, and the Commission blames the fragmented market.

Telecoms companies have welcomed efforts to reduce red tape for expanding within Europe. But they have fiercely resisted consumer elements of the package, such as an end to European roaming charges and net neutrality requirements, which would prevent internet providers from blocking or slowing down broadband speeds at specific times or for specific applications.

The industry failed to remove net neutrality from the proposal. But they were successful in removing a strict ban on roaming charges within the plan initially floated by the Commission. Instead, mobile companies will have to offer customers ‘roam like at home’ packages for within Europe.

The industry also opposes a provision in the proposal which would end ‘international’ long-distance phone charges within the EU. Phone companies would have to charge a flat ‘long-distance’ price whether the calls cross a border or not.

The proposal would not create a European telecoms regulator, contrary to an idea championed by the Commission’s competition department. Instead, it would create a single EU authorisation for telecoms operators that all national regulators would have to accept. It would also give the Commission the power to overrule national regulators in areas such as spectrum allocation for broadband. Any new national market regulation would be subject to a test of how far it promotes investment and allows access to all market players.

The European Telecommunications Network Operators’ Association (ETNO), which represents most of the EU’s largest telecoms companies, fought vigorously against plans to end roaming charges. The operators note that infrastructure investment is declining, and say that new regulations that would reduce revenue are not the answer.

ETNO published a study in July suggesting an investment shortfall of between €110bn and €170bn to meet the Commission’s digital-agenda targets. The study called on the Commission to allow “substantial deregulation” of fixed-line wholesale access and changes to competition rules to allow for more mergers among telecoms firms.