To encourage investment in fiber-optic networks that will form the basis of the European Commission’s agenda to expand broadband service throughout the European Union (EU) by 2020, EC digital agenda commissioner Neelie Kroes announced on Monday that she would propose changes in the regulation of legacy copper networks that would lower the wholesale price that incumbent carriers would be able to charge competitors to gain access to such networks. Although Kroes noted that incumbents would be able to exempt themselves from that rule if they invest in high-speed fiber networks, EU telecom executives criticized the proposal as unrealistic, as they warned that the plan would, in fact, discourage the investment that Kroes is seeking to stimulate. In a speech before an industry conference in Brussels, Kroes said she was “very interested to explore a new pricing model” for copper networks that is centered on “creating the conditions for the replacement of the old copper network with fiber.” Lamenting that investment in EU fiber networks is lagging and that continued delay in advancing the EC’s digital agenda goals may put the EU at a competitive disadvantage against the U.S. and Asia, Kroes said she would pursue a reduction in wholesale rates for competitors that seek access to existing copper networks, adding that incumbents would have to upgrade their copper infrastructure or invest in new fiber lines to avoid wholesale rate reductions. To further stimulate investment, Kroes also said the EU would make available €9.1 billion (US$12.15 billion) in funding, starting in 2014, to subsidize broadband network construction in rural and other high-cost areas. Describing the proposal as “simply crazy,” Telecom Italia CEO Franco Bernabe warned that the new regulation would serve only to further handicap carriers that are already reeling from declining revenues and difficult economic conditions. As Bernabe countered that what incumbents really need is “lower taxes, less regulation, [and] a good operating environment,” an executive of Danish telecom operator TDC warned that the proposal “will reduce profits in the industry so there will be less money to invest.”