The European Commission has suspended a proposal from Spain's CMT telecoms regulator for regulating the prices dominant operator Telefonica can charge other broadband providers for selling services based on its network.

"The commission questions the Spanish regulator's price regulation of wholesale broadband access," the EC said in a press release Friday.

It expressed concern that "CMT's approach may not be compatible with EU telecoms rules, could be detrimental to competition and would not incentivize investment in broadband."

The commission added that it was "concerned that the regulated prices are not set in a transparent manner and that the proposal could create artificial barriers in the market."

The proposed Spanish regulation "will discourage operators from other countries from buying wholesale broadband access in Spain, and as such hinder the development of pan-European services," the EC said.

The commission noted that the CMT proposed to set the regulated prices based on a "cost model in combination with Telefonica's accounting data and benchmark among member states," but noted that the resulting prices were "up to 50 percent above cost-efficient levels."

It said implementation of the proposal would be suspended until the CMT finds a solution in collaboration with the EC and the Body of European telecoms regulators, or BEREC. EFE