EC freezes FNA leased line regulation

The European Commission (EC) has announced in a press release that it has put on hold plans by German network regulator the Federal Network Agency (FNA) to regulate high bandwidth leased lines, pending further investigations. In May 2012 the EC received a draft decision from the FNA concerning the market for the wholesale terminating segment of leased lines. The German regulator proposes to regulate the prices which incumbent telecoms operator Deutsche Telecom (DT) will be able to charge alternative operators to access its terminating segment of leased lines in Germany. The proposals include a price control for leased lines with a bandwidth of over 155Mbps. At the end of 2011 the FNA notified the EC that DT has significant market power for terminating segments of between 2Mbps and 155Mbps, but it concluded that terminating segments with a bandwidth of over 155Mbps are prospectively competitive and, thus, no longer susceptible to ex-ante regulation. The EC believes that the proposal could have a negative effect on competition and the future offer of leased lines under competitive conditions, as well as potentially creating barriers to the development of the single market. As such, the EC has suspended the implementation of the proposal pending a ‘second phase’ three-month investigation during which it, in close cooperation with the Body of European Regulators for Electronic Communications (BEREC), will discuss with the FNA how to amend its proposal in order to make it compliant with EU law.