Members of the European Parliament look set to back plans for a major overhaul of the European Union's telecom laws after two committee votes on the matter late Monday, although many of the European Commission's original proposals have been watered down.

Former monopolies that don't grant smaller rivals fair access to their phone networks may, under the proposal, be punished by a forced separation of their infrastructure from their services.

Parliamentarians sitting on the industry and internal market committees also supported the idea of a Europe-wide regulator. However, the body they envisage would not be as powerful as the one proposed by the Commission -- Europe's executive body.

The industry committee voted to create a Body of European Regulators in Telecommunications (BERT), composed of the 27 national regulatory authorities, instead of the European Electronic Communications Market Authority (EECMA) advocated by the Commission.

The BERT would work together with national telecoms authorities and the Commission to ensure that laws are applied consistently throughout the E.U.

The Commission originally planned to make EECMA a powerful E.U.-wide body modelled on the U.S. Federal Communications Commission, with power over competition and security issues, but national governments as well as member of parliament (MEPs) are uncomfortable about creating such a huge central regulator.

The Commission also wanted to have veto power over the new body, but MEPs made clear in the two committee votes that the last word in telecom regulation will remain with the BERT, rather than with the Commission.

This means that the Commission will not be able to take action against a national regulator it suspects of misinterpreting E.U. rules without the support of the BERT.

Telecoms operators were divided in their reactions to the committee votes. Neither the former monopolies, nor the younger rivals competing with them, were satisfied with the results, which appear to balance out the interests of the two.

ETNO, the European Telecommunications Network Operators' association, said in a statement released Tuesday that the inclusion of the functional separation remedy in the framework "is a deterrent to investment and not the right approach for favouring infrastructure-based competition."

The IDG News Service is a Network World affiliate.