The European Commission has questioned the way Italian telecoms watchdog AGCOM arrived at changes planned to wholesale broadband prices, claiming the move could cramp the ability of market players to decide on prices in Italy.
In a statement on Monday, the Commission said it had invoked the EU review mechanism over the move, adding it would discuss with AGCOM how to amend its proposal over the next three months.
In July, the Italian watchdog tentatively approved lower fees for rivals who rent space on the fixed-line copper network of former monopolist Telecom Italia (Milan, Italy).
The EU move was cheered by Telecom's rivals but drew criticism from the incumbent which said it would reduce its annual income by 110 million euros ($146.23 million).
Following the decision, Telecom Italia said it wanted to secure favorable regulatory conditions before taking any steps forward in its plan to spin off its fixed-line network.
In Monday's statement, the EU Commission said it was concerned at how AGCOM had set the prices using a market review that was not the most recent.
Access prices to broadband services should reflect the most recent cost information, it said.
"In departing from the approach announced last year for setting access prices in the Italian broadband markets, AGCOM undermines the required regulatory certainty for all market players," EU telecoms chief Neelie Kroes said.
AGCOM was not immediately available for a comment.
(Reporting by Stephen Jewkes; editing by David Evans)