Berlin-Brussels conflict: two points of view

29 Jun 2007

The EU Commission has confirmed that it has filed a formal complaint against Germany at the European Court of Justice related to Germany’s new Telecommunications Act, which exempts incumbent Deutsche Teleom (DT) from having to provide access to its new fibre-optic VDSL network to competitors until such time as DT is able to recoup its investment, which is forecast to reach EUR3 billion (USD4 billion) by the time the infrastructure is completed. Both the German government and DT (in which it holds a 31% stake) have said that they believe the Act is in line with EU regulations, but Brussels feels that the telco is receiving special treatment and is taking the government to court to force the revision of the Telecommunications Act.

The Association of Telecommunications and Value-Added Service Providers (VATM) represents more than 50 operators in the German fixed line and multimedia markets, all of whom compete with former monopoly DT. Axel Spies, a lawyer speaking on VATM’s behalf, said yesterday, ‘The German competitors are pleased that DT intends to modernise its networks and have offered talks with DT about joint infrastructures and using synergies. The European Commission and the German regulator BNetzA have acknowledged that excluding competitors from access to DT network will harm Germany as a place to do business. It is now upon the regulator BNetzA to implement the issues that the European Commission has addressed…and particularly to ensure that competitors not only have access to ducts and dark glass fibre, but also access to the Next Generation Networks (NGN) in DT’s Main Distribution Frame (MDF). The regulator should revise its market analysis as soon as possible so that there is clarity in the market for further investments and to avoid new monopoly structures by DT.’

A spokeswoman for Germany’s Economics Ministry in Berlin said that the German government was looking forward to the European court’s ruling, adding that the state still feels that the charges are unfounded and that the new Telecommunications Act complies with EU law. She dismissed claims that the German government was simply trying to drive up share price of DT as ‘simply ridiculous’. The telco itself has stated that ‘…the German Act complies with the law,’ and has always argued that temporary exemption was justified in light of the volume of planned investments.

Germany, Deutsche Telekom (DT)