* Says 180-270 billion euros of broadband investment needed
* No regulatory holidays for dominant operators
* Operators welcomes proposals; wholesale fibre prices key
* Telecoms index up 0.5 percent
(Adds ECTA comments, shares)
By Foo Yun Chee
BRUSSELS, Sept 20 (Reuters) - EU countries should free up broadband spectrum to mobile operators by 2013 to spur consumer demand, the European Commission said on Monday, in its latest effort to boost cross-border trade and create jobs.
The European Union executive also stressed the need for billions of euros of investment in high-speed broadband networks as it urged EU governments to set out concrete measures to encourage public and private spending and competition.
"Fast broadband is digital oxygen, essential for Europe's prosperity and well-being," Neelie Kroes, the European commissioner for the digital agenda, said.
The Commission said it would seek approval from the European Parliament and the Council of Ministers for a Jan. 1, 2013 deadline for EU's 27 member states to open up the 800 MHz spectrum, which is currently used by broadcasters.
Exceptions would be allowed until 2015 only in exceptional cases.
ECTA, the European Competitive Telecommunication Association, whose members include Vodafone, Bouygues Telecom, Cable & Wireless, BT and AT&T, welcomed the proposal.
"We are particularly pleased that the Commission has made proposals to ensure that spectrum is allocated in a way that promotes competition," said ECTA director Ilsa Godlovitch.
"We hope this will prevent situations where spectrum becomes concentrated in the hands of those with the deepest pockets, reinforcing the position of the largest firms," she said.
AIRWAVES AUCTION
The STOXX Europe 600 telecoms index was up 0.5 percent in mid-session.
Germany, the only EU country so far to make the broadcast spectrum available for mobile broadband, held its largest airwaves auction in May, with Deutsche Telekom and Vodafone acquiring many of the new radio frequencies.
Mobile operators need more spectrum to handle increasing amounts of data traffic from mobile devices.
On access to fast-fibre networks, the Commission said it would not tolerate regulatory holidays -- when governments allow operators to block access to networks -- for dominant firms.
"It is essential to establish a fair market for all participants, no matter what the underlying infrastructure or technology," it said.
The next step is for national regulators to implement the Commission's proposals, said the ECTA's Godlovitch.
"This is just the beginning of the story. The price consumers pay for high-speed broadband and whether they have a choice of provider will depend on how the wholesale fibre price is set by national regulators," she said.
The Commission said it would new unveil broadband finance instruments next spring together with the European Investment Bank. The EIB lends an average of 2 billion euros ($2.6 billion) annually for broadband projects.
The Commission said investment of between 180 billion euros and 270 billion was needed if broadband services were to be available in every EU household by 2020. (Editing by David Holmes) ($1 = 0.7641 euro)