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Commission reluctantly approves controversial German telecoms rule


Commission reluctantly approves controversial German telecoms rule

Günther Oettinger

[European Commission]

The European Commission gave a feeble stamp of approval to a controversial German telecoms rule yesterday (19 July), putting a temporary stop to Brussels’ fight with the German regulator.

It took three months for Germany’s telecoms regulator, the Bundesnetzagentur, to secure the Commission’s consent for a new regulation to speed up broadband internet connections.

But the executive’s approval is only half-hearted: after the summer, the Bundesnetzagentur will still have to send the Commission a new proposal laying out how it will change its rule to make sure smaller telecoms operators are able to access internet networks.

Under the Bundesnetzagentur’s regulation, giant operator Deutsche Telekom will invest €1 billion to use the vectoring technology to update its copper networks. Competing companies like Vodafone pushed back against the agency’s decision to allow vectoring, which they say will cut off their access to internet users and delay a wide-scale switch to faster fibre glass networks.

In May, German Commissioner Günther Oettinger, who is in charge of EU digital policy, announced he was opening a probe to test whether the rule complies with EU law.

Oettinger’s decision prompted a fight with Berlin and raised concerns that if the Commission blocked the Bundesnetzagentur’s rule, the German government would miss its target to bring internet speeds up to 50 megabits per second by 2018.

In a surprising pivot, the German regulator sent a changed draft regulation to Brussels last month.

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By waving through the new deal, the Commission avoided heating up an already tense political squabble with the German government.

But the executive’s decision still sends the Bundesnetzagentur back to the drawing board. This autumn, the agency will have to draft a new regulation that makes clear how competing telecoms firms can share networks with Deutsche Telekom once it starts using the vectoring technology. Legally, yesterday’s decision is useless until the Bundesnetzagentur writes up that rule and secures the Commission’s approval.

One Commission source close to the decision called the missing proposal a “critical element”.

“The idea of having speed gains and faster broadband can only really materialise once there is this ‘product’ which is actually working,” the source said.

Deutsche Telekom can already build new network infrastructure but the firm is barred from using the vectoring technology for internet connections until the new rule is drafted and cleared by the Commission. Before that happens, the Bundesnetzagentur will hold a national consultation on the measure.

“They can put everything in place but they cannot activate it. This doesn’t delay the investment but it delays the whole application,” the Commission source said.

The EU executive expects the Bundesnetzagentur to send in its new regulation later this year, meaning the process to gain another approval in Brussels could drag into 2017.

A Deutsche Telekom spokesman said the firm welcomed the Commission’s decision yesterday but was still examining the demand for a further review process in autumn. “This was not part of the decision draft the German regulator published before,” the spokesman said.

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The European Commission announced as part of its digital single market plans that it would propose telecoms legislation in 2016, likely after the summer. The Commission's public consultation on regulation of the telecoms sector ended in December 2015.

The upcoming reform is expected to affect investment in telecoms networks, access to networks and competition with internet services like Skype and Whatsapp. Big incumbent telecoms companies argue those services aren't regulated as rigorously--and they demand a 'level playing field'.

In November 2015, the German national telecoms regulator approved a request by Deutsche Telekom to use the controversial vectoring technology to deliver high speed broadband, which competing companies say will crowd out their access to networks. The executive was notified about the decision on 7 April 2016, and will then issue its own decision about whether the deal breaks EU law and opened an inquiry into the rule on 10 May. On 19 July, the Commission approved the

The executive was notified about the decision on 7 April 2016, and will then issue its own decision about whether the deal breaks EU law and opened an inquiry into the rule on 10 May. On 19 July, the Commission approved the regulation, but gave the Bundesnetzagentur until autumn to submit an additional proposal that makes clear how competing firms can use internet networks.