Cisco has been in a very bad position for about the last year. They have failed to continue innovation and are now facing being left behind. They also have strong competition in there core business of networking as they have priced themselves out the market.
As for there Tele-Presence. I sit right next to the system we have at my job. Its nice but certainly not worth the money the company paid to have it installed.
Cisco is essentially in the same position as RIMM.
I personally think the EU will see this request for what it is and kick it to the curb as they should.