Ruling parties agree on change to controversial telecoms bill

22 Nov 2006

The two ruling parties of the German government have agreed minor amendments to loosen regulation in the telecoms market for companies which invest in infrastructure and at the same time offer new products. The European Commission has warned that it will take Germany to court over the bill, which if passed would allow incumbent Deutsche Telekom (DT) to prevent competitors using its EUR3 billion (USD3.8 billion) high speed broadband network. The amended bill, which will be voted on by the lower house of parliament next week, now includes a definition of ‘new markets’ which states they are only applicable to new services and products, not just new infrastructure. This means that if DT links its VDSL network expansion to new products, such as IPTV, then it will, according to the amended bill, be creating new markets which are free from competition regulation.

German lawmakers feel that although their amended bill is in line with the rest of Europe, the change will not appease the Commission. An EU official said it looked even more likely now that Germany would be taken to court over the law as the amendment makes ‘the violation of EU law clearer’. They add that the definition of a new market breaks competition rules, arguing that ‘a car that has a higher speed is still a car, and sold on the car market’. EU Telecoms Commissioner Ms Viviane Reding will discuss the matter with German ministers in Berlin on Thursday.

Germany, Deutsche Telekom (DT)