The European Commission had argued that the only way to get telcos to pick up the pace of building faster fibre networks was to make renting old copper lines less lucrative.
The idea triggered months of public sniping between regulators and major telecoms, with Telecom Italia CEO Francesco Bernabe calling the proposal “simply crazy”.
Large European telecom companies welcomed the rethink while representatives of roughly 100 alternative Internet providers complained that the change meant customers would continue to be overcharged.
Network tenants like Fastweb and Iliad say rents are too high while the copper wire owners say they need the cash from rents to invest in fibre infrastructure.
Governments and EU officials are growing increasingly concerned that the region’s economy could fall behind Asia and the United States through a lack of broadband connectivity.
“In 2012 alone, 35m Chinese households will be connected to very fast broadband,” said Neelie Kroes, an EU Commission vice-president in charge of the Digital Agenda.
“We need to do much better to change that.”
At the end of 2011, the EU had just one quarter of Japan’s 20m fibre customers in 2010 even though Japan’s population is under a quarter of the EU’s 500m citizens.