Revised telecoms law takes effect; EU regulators launch legal action

26 Feb 2007

A controversial revision to Germany’s telecoms law, that protects the incumbent telco Deutsche Telekom (DT) from having to open its EUR3 billion (USD3.9 billion) VDSL network to competitors, has taken effect. In response, the EU Information Society and Media Commissioner Vivene Reding has sent Berlin a letter of formal notice, the first stage in a legal challenge to Germany to change the law, which Ms Reding sees as anti-competitive. Germany claims that the new law is compatible with EU regulations. The matter is likely to end up before the European Court of Justice, a process which can last several years, although Reding has said she will fast-track the case so that Germany is in court by the summer. DT had asked for the new law to protect its investment, and to safeguard 5,000 jobs which would be lost if the plug was pulled on the 50Mbps fibre-optic network. The incumbent, the biggest telco in Europe by subscribers, is already renegotiating contracts with around 45,000 employees in its T-Service business, which is to be spun-off as part of a massive cost-cutting exercise. A DT spokeswoman said that job guarantees would be offered to employees beyond the end of 2008, but in return staff would have to ‘work a little more and earn a little less’. The trade union Ver.di, which has 2.6 million members, is already planning protests at the plans.