European countries cannot take advantage of a full range of digital services unless progress is made beyond ADSL broadband networks, it has been claimed.
Neelie Kroes, Vice-President of the European Commission, said governments must not let their broadband networks become "the bottleneck for [an] amazing opportunity".
She suggested that the rollout of fibre and other next-generation solutions is crucial if businesses and consumers are to make the most of the opportunities afforded by the internet.
"And for that, we need the sector that provides that vital infrastructure - telecoms companies and others - to be strong," she stated.
Ms Kroes said that while competition in European telecom networks has driven progress, the transition to an expensive new generation of high-speed networks, co-existing with the old, poses "special challenges".
"Though the public sector can help, the real heavy lifting must be done by private investment," she claimed.
"Clearly, whatever the network and whatever the operator, people need to see an adequate return before they will invest: taking into account the risks."
Ms Kroes said it is vitally important that industry players can compete on a level playing field, without one hand tied behind their backs.
"Incumbents should not be able to discriminate between their own retail arms and others'," she stated.
"Although often undervalued in today's regulatory practice, securing truly equivalent access by alternative operators to incumbent networks is probably the most important guarantee of sustainable competition, on existing and new networks."
Ms Kroes added that too much intervention "constrains flexibility", which in turn reduces the range and quality of services that can be offered to different consumers.
"Particularly as we make the transition from one technology to the other, both incumbent operators and others need to be able to explore new possibilities," the Vice-President stated.
"As far as possible, we will focus on issues vital for healthy competition, allowing us potentially to lighten regulatory intervention elsewhere."
Ms Kroes said it is important to be aware of both direct and indirect effects of regulation.
For example, regulating copper access prices can affect the pricing and return on other infrastructures, such as fibre or wireless.
"In the right circumstances, we can take advantage of this by focusing wholesale price regulation on key anchor products," she added.
Ms Kroes added that, in general, regulated wholesale access prices should get the 'buy or build' signals right.
Replacement cost can give other operators a clear incentive to build out their own networks, and so to use their own assets to drive infrastructure-based competition, she stated.
"Elsewhere, alternative operators will continue to have wholesale access to incumbent networks so consumers can get competitive services," Ms Kroes stated.
She noted that regulatory stability and consistency over time "is a value in itself".
"It is vital to build trust by commercial investors and operators. Consistency across the single market is also a vital part of the equation," Ms Kroes added.
"Our approach should be maintained over time, consistent and reliable for the long term – but it also needs to be sufficiently flexible to adapt to changing circumstances."