Juncker demands better EU telecom roaming charge plan

By Julia Fioretti and Alastair Macdonald

BRUSSELS (Reuters) - The European Commission withdrew proposals on Friday that would limit next year's abolition of mobile phone roaming charges after criticism that the rules should do more to favour telecoms firms' customers.

In a dramatic U-turn, four days after officials published rules to restrict how many days consumers could use phones abroad without extra fees, President Jean-Claude Juncker ordered the draft revised in what allies and officials said showed that the EU executive wanted to be seen to listen to ordinary voters.

Three months after the British public delivered a shattering blow to the European Union by opting to leave the bloc, Juncker and leaders of the other EU states are working to restore trust in an institution which insurgent eurosceptics say is out of touch and in the pockets of big, globalised corporations.

The telecoms industry, however, was unimpressed, saying the Commission's original proposal was already painful for them.

After years of progressively capping roaming charges, EU law will end the practise altogether in the middle of next year for customers who make "fair use" of the service, in terms of how much time and data they use and how long they spend abroad.

Under Monday's draft definition of "fair use", published for public comment, firms could charge clients extra who use their phones abroad for more than 90 days a year or 30 in a row. The Commission says the average European is abroad 12 days a year.

Juncker, who will make his annual State of the Union speech on Wednesday, did not see the proposal before it went out but heard public feedback, a Commission spokesman said: "We have been listening and now we are going back to the drawing board."

EU officials told Reuters their main concern was that the proposal was not good enough for consumers. Mobile operators association GSMA said it also welcomed a review, calling the draft over-complex for customers - as well as "unworkable" on a commercial and technical level for the companies themselves.

Another group, ETNO, said the 90-day allowance went far beyond the spirit of the law that will take effect next June.

Companies pay firms in the other country wholesale prices for data and calls when a customer of theirs roams abroad. They argue that big variations in mobile prices across the bloc make it uneconomic for them to offer totally free roaming to all.

Commission spokesman Alexander Winterstein insisted that, despite negative media commentary this week on the limitations for consumers, most Europeans would benefit from new regulations that were a "major success" for EU policymakers.

"Roaming charges are going to disappear entirely by June 2017. Period," he told a news conference.

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For a decade, battles over roaming charges have provided a barometer of EU politics. Europeans, millions of whom frequently cross often nearby borders, have been irritated by charges for making calls or using data abroad that seem very much greater than any additional costs required to provide such a service.

The Commission, in its role as enforcer of a single market blind to national frontiers inside the EU, has long cited its campaign to cap roaming charges, forcing them down by some 90 percent since 2007, in efforts to show voters it works for them.

But rearguard action by phone companies, defending profits and citing big discrepancies in the prices customers pay across domestic markets that range from Bulgaria to wealthy Luxembourg, has left disappointed consumer groups accusing the EU of caving in to corporate lobbying in Brussels and in national capitals.

The German leader of the centre-right bloc in the European Parliament, which supported the conservative Luxemburger in his appointment as Commission president, hailed Juncker's move and said people expected him to keep pledges made by Brussels.

"We are pushing for an end to roaming fees for European consumers in 2017 in full transparency," Manfred Weber said. "This is what we promised citizens ... We expect the European Commission to give a strong signal in this direction next week."

Officials say Juncker's State of the Union address to the parliament in Strasbourg on Wednesday is likely to contain proposals to promote economic growth and the single EU market following Britain's vote for Brexit on June 23.

EU officials say that Juncker is determined to fight back against the rise of eurosceptic parties, including in France, Germany and the Netherlands which hold elections next year, by ensuring the Commission demonstrates it is acting for voters.

Over the summer, the Commission decided not to levy fines on Spain and Portugal for breaking budget rules in the euro zone.

Last week, it made headlines by handing a record 13-billion euro tax demand to iPhone maker Apple Inc (AAPL.O), saying the Irish government had effectively given it illegal subsidies by failing to collect taxes on profits routed through Ireland.

(Editing by Philip Blenkinsop and Alison Williams)