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(Repeats story from Saturday)
* EU wants to incentivise operators to co-invest
* EU telecoms rules to be reviewed in September
* Running fibre-optic networks to households is costly
By Julia Fioretti
BRUSSELS, June 25 (Reuters) - The European Union is leaningtowards relaxing rules that force telecoms companies to open uptheir networks if they show willingness to co-invest with rivalsin superfast broadband.
The European Commission has made fostering investment in newfibre-optic networks to meet rising demand for data services amajor plank of a reform of the current set of fifteen-year-oldtelecoms laws when they are reviewed in September.
This marks a shift from the main purpose of telecomsregulation which has focused on allowing new entrants to competeon a more level playing field with former state-ownedmonopolies.
But the costs of running optic fibre - which can deliverspeeds of up to 1 gigabit per second - into households are highand telecoms operators such as Orange, DeutscheTelekom and Telecom Italia have longcomplained that the current rules forcing them to open up theirnetworks to competitors at regulated prices do not allow themget a decent return on investment.
EU regulators want to offer companies the carrot of lighteraccess rules if they give operators the chance to co-invest withthem.
"Efficient investment projects which are based on open,good-faith and reasonable co-investment offers ... address theconcerns that access regulation normally seeks to resolve andallow a lighter regulatory approach to those who move first ortogether," Guenther Oettinger, EU digital Commissioner, said ata telecoms conference.
It is a model already adopted by France, where Orange,Numericable SFR and Free have all offered todo shared rollouts of fibre-to-the-home in some urban areas.
Operators who do not participate would still be able to askfor access later, albeit on less favourable terms, two EUofficials said.
Companies which own legacy copper networks would still have"ownership monopoly", one telecom lobbyist said, but challengeroperators would equally have the benefit of long-term access tothe network on good terms.
One EU official said some challengers might prefer to askfor access later rather than footing some of the bill ofbuilding the infrastructure. Equally, incumbents would prefer togo it alone but the high costs of rolling fibre out tohouseholds make that difficult.
"WE DO NOT PICK WINNERS"
Goldman Sachs has estimated that rolling outfibre-to-the-home costs between 500 and 800 euros ($907.12) perhousehold. On the other hand upgrading a copper network usingvectoring technology - the most advanced form of which candeliver download speeds of up to 800 megabits per second - onlycosts around 300 euros per household.
But the Commission signalled its discontent with vectoringwhen it scuppered Deutsche Telekom's plans to use the technologyin May.
"We do not pick winners," an EU official said. "But there isan understanding that we need fibre."
Operators rolling out fibre-to-the-home could see a morefavourable treatment from regulators, the person said.
Brussels also wants to reward companies who adopt a"wholesale-only" model, whereby they sell access to theirnetworks to other firms and do not offer consumers their ownretail broadband packages, EU officials said.
While operators will not be forced to separate theirinfrastructure arm from the retail one, there will be incentivesfor those who do so.
The wholesale-only model would have the advantage of makingthe market less "litigious", said Innocenzo Genna, a telecomsexpert in Brussels, because the wholesale operator would have noretail business to defend.
The Commission has also been at pains to stress that anylightening of the access rules will not mean it has abandonedits aim of fostering competition.
"This is not a battle between competition and investment. Itis a balance," said Commission Vice-President Andrus Ansip, incharge of digital issues, at a conference in June. "Access-basedcompetition will remain important."
The Commission is looking at lightening rules on givingaccess where there are two parallel networks, for example acable operator and a telecoms operator, and applying them toboth, two EU officials said.
Cable operators such as Liberty Global arecurrently not required to open up their networks in mostcountries, although the current EU regulation does not precludeit.
So-called "symmetrical regulation" could be less intrusiveand more streamlined, the people said.
($1 = 0.8819 euros) (Reporting by Julia Fioretti. Editing by Jane Merriman)
