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The compromise gives the European Commission, the EU's executive body, powers to oversee national regulatory regimes and to overrule national regulators in key areas that make an impact on the functioning of the single EU-wide market.
The decision, which required European Parliament agreement, will allow for co-ordination of radio spectrum policy issues across Europe. This is vital to avoid a repeat of the fragmentation of the European market that followed the sale of licences for third-generation (3G) mobile communication networks, the European Commission said.
Making Europe the most competitive economy in the world within 10 years is the ambitious target set by EU heads of state at a summit in Lisbon in the spring of 2000. One of the first steps they called for was an overhaul of EU laws relating to the telecoms industry, to be completed by the end of 2001.
A controversial directive on data protection for telecoms was earlier dropped from the package approved this week, because it was feared that the impasse on two central issues in that law would delay the whole process. Those two issues are data retention and unsolicited commercial e-mail.
The directive is expected to be delayed until early 2002, according to an official at the Commission.