The European Parliament called for a new, independent telecoms regulatory group to help open up competition for internet and phone services across Europe, an Associated Press report said.
But its choice, a group made up of national telecom agencies, does not go as far as the European Commission's demand for a tough EU-wide body that could weaken the grip many former state-owned telecom monopolies have in EU nations, the report added.
The European Commission, which is akin to the executive branch of US government but has limited powers, claims that regulators' reluctance to break open static markets is holding back the expansion of broadband across Europe.
For instance, the European Commission has repeatedly attacked German regulators for taking a soft touch on Deutsche Telekom's high-speed internet network.
The German government has agreed that the company can shut rivals out of the broadband infrastructure so that Deutsche Telekom can recoup its investment.
Lawmakers in the European Parliament watered down some of the commission's other suggestions, saying the new agency should not take charge of EU network and information security.
They also gave lukewarm support for a proposal that would allow regulators to split up major telecom companies. The European Commission claims that separating telecom services away from managing network infrastructure would reduce conflicts of interest and boost competition.
The Parliament said such splits should happen only if regulators across Europe agree that it is the only way to create competition in a country where one company effectively controls the pipes that provide telecom services.
Europe's biggest telecom companies said there was 'no justification' for the move, warning it could seriously discourage plans to invest some in high-speed next-generation networks.