The 27 telecommunication ministers of the European Union unanimously dismissed Commissioner Viviane Reding's plans to create a powerful central telecom regulatory body at a meeting in Luxembourg on Thursday.

They were more supportive of other elements of her reform plans, including the functional separation punishment with which she wants to threaten former telecom monopolies. They also backed her latest idea: to issue guidelines for the telecom industry on ensuring a fair return on investment and sharing of next-generation telecom infrastructure.

Reding's vision of a single European regulator was laid down last year in her proposals for reforming Europe's telecom laws. Initially, her plan was presented as a European equivalent of the powerful U.S. Federal Communications Commission (FCC) and was a central plank in her reform package.

It would combine the roles of ENISA, the European network security agency, with an overview of the telecom market in one supra-national body. However, hostility to the plan has grown, especially among national telecom authorities, which would have been eclipsed by the new central body if it were created.

"I note that all ministers want something smaller than I proposed," Reding said after the meeting.

"The merger of the new European telecoms body with ENISA has faced a lot of opposition. I regret this, as I believe that there are a lot of synergies to be won by combining network regulation with a security dimension. I continue to believe that it would have been better to have only one agency than two bodies," she said.

However, she claimed some victory in the fact that the ministers agreed that the national regulators' forum for discussion about Europe-wide issues, the European Regulators Group (ERG), which has existed for many years, should be beefed up.

"Everybody agrees today that the current ERG is not enough for responding to the regulatory challenges of the evolving European single market for telecoms," she said.

Functional separation of telecom companies' infrastructure from their own telecom services is a necessary threat to make to incumbent operators because many of them are still failing to grant fair access to their networks, the Commission believes.

"Most ministers agree with the Commission proposal to include the new remedy of functional separation in the remedies toolbox of independent national telecoms regulators," Reding pointed out, adding that this "is a strong message from this Council for continuing and reinforcing the path of Europe's telecoms regulation that has successfully led to competition, access to new networks and lower prices for consumers."

The IDG News Service is a Network World affiliate.