FNA lifts prohibition on TD’s VDSL bitstream model

Germany’s telecoms regulator, the Federal Network Agency (FNA, also known as Bundesnetzagentur or BNetzA), has said it intends to withdraw the provisional prohibition it imposed on Telekom Deutschland’s (TD’s) new price model for marketing VDSL lines to competitors. The move follows significant changes made by TD to its price model in response to concerns raised by the regulator. In mid January 2012 TD had notified the FNA of its price model, which allows carriers that wish to offer VDSL IP bitstream lines to reserve a certain quota of lines in return for an up-front fee, giving them the right to lease the agreed number of lines for the next eleven years for a set monthly charge. The Ruling Chamber had initially concluded that the original price model could pose obstacles to competition for other carriers, as it was tied long-term to TD’s existing VDSL infrastructure, which would negatively impact on other carriers’ willingness to invest in a new, high-performance broadband infrastructure. Accordingly, on 2 April 2012 the FNA placed a provisional prohibition on TD’s price model. The following month, the operator notified the FNA of a number of changes to the model, including an exceptional right to terminate agreements concerning existing lines if carriers switch to new next generation access lines, a reduction in the minimum line quota, and an increase in the monthly rental charge per line. As a result of these changes, investors in broadband infrastructures no longer have to assume that potential wholesale customers will be tied exclusively to TD over a long period, rather they are now able to terminate their customer relationship with TD without penalty whenever they wish to start operating their own or supporting a third-party broadband infrastructure. The FNA has now said that it is satisfied that its previous concerns have been addressed and has decided to withdraw the provisional prohibition. The European Commission and the regulatory authorities of the other EU member states now have one month to produce a statement on the matter, after which the FNA will publish its final decision.