I think our dispute comes down to a single question: Are high prices alone proof enough of a dysfunctional market? You seem to say that by definition excessive prices are a market failure that has to be fixed by the government. I disagree. I think the standard of proof has to be higher than that.
If governments effectively start to target profit margins for particular services it will result in massive misallocation of capital. The prices of basic services will go up and innovation will suffer, because one reason for innovating is to earn very high margins for a while until cheaper alternatives become available.
Example? I'm charged 4 Euros (5$ +) for 1MB of data. Overseas I may be charged as much as 17EUR for a MB.
This is not a reasonable price determined by a free market, but price gouging and I can't switch to an alternative service provider.
At least - thanks to the wide availabilty of WiFi - I do have an alternative to such obscene prices.
For voice calls this is not the case. So I for one salute the EU's efforts to curb an out of control market.
Your mileage may vary, of course.