Germany reconsiders VDSL exemption strategy

15 Dec 2005

After talks with the European Commission, the German government is reconsidering its plan to grant Deutsche Telekom (DT) regulatory exclusion for a USD3.6 billion VDSL network that the incumbent plans to build over the next few years. Head of Germany’s Federal Network Agency (FNA), Matthias Kurth, yesterday told the Commission that he planned to regulate parts of the VDSL (very high bit rate digital subscriber line) network after Brussels threatened to veto the exemptions. Kurth’s statement was a reversal of the regulator’s earlier argument that VDSL was a new product that should be free from regulation, as it was impossible to tell what services it might spawn. This sparked criticism from the Commission and from DT’s rivals, which accused Kurth of trying to protect the former monopoly. Their fears were heightened by the government’s promise to exclude DT’s new system from regulation as well as exempting other forthcoming VDSL ventures, despite DT being the only company with plans to invest in the nationwide network. A spokesperson for Viviane Reding, European telecoms commissioner, said: ‘We insist that the development of the VDSL market in Germany follows the EU rules and that the dominant player will not be given a head start in a monopoly.’

Germany, Deutsche Telekom (DT)