Europe’s largest phone operator Deutsche Telekom must open up its broadband network to rivals immediately in order to cut costs for consumers, the European Commission has stated.
On 21 August 2006, the Commission backed a proposal from German telecom regulator Bundesnetzagentur (BNetzA) that would force Deutsche Telekom to open up its internet network to its competitors.
Investigations carried out by German authorities late 2005 found that the company was in a position of “significant market power” mainly due to its refusal to allow new market entrants access to infrastructure that would permit them to provide broadband services such as high-speed internet and telephony.
The German company is currently developing an ultra-high speed VDSL service that can carry far more content than existing networks and argues that it needs to retain exclusive access to this new infrastructure in order to recover its 3 billion euro investment.
Although this argument was accepted by the BNetzA, and despite a threat from Deutsche Telekom to cease development of the VDSL network if it is subject to official regulation, the Commission ruled that no infrastructure should be excluded from the access obligation.
Information Society and Media Commissioner Viviane Reding said: “To open the German broadband market to competition will lead to better services and lower internet-access prices for consumers.” She urged the BNetzA to implement the decision “without any further delay”.
A Deutsche Telekom spokesman described the demands made by the Commission as “a classic case of overregulation”.