Leaked German government document calls for softer telecoms rules

The German government's position paper on the EU telecoms reform could be a boon for Deutsche Telekom. [Japanexperterna.se/Flickr]

EXCLUSIVE / Germany’s leaked position paper on the upcoming EU telecoms reform tells the executive to lighten up on regulation and give its national telecoms authority more power.

The 18-page document newly drafted by the German government outlines the country’s demands for a fresh EU-wide telecoms law: Germany wants less regulation and to boost investment in telecoms networks as fast as possible. The paper could be a boon for giant Deutsche Telekom, which has pushed for lighter regulation and vowed to invest in exchange.

The German document also calls for a ‘clear division’ of rules to give national regulators more autonomy.

A spokesperson for the German Ministry of Economic Affairs declined to comment on the draft paper because it is still awaiting approval from the entire government, a process that could take several weeks.

The German Ministry for Transport and Digital Infrastructure allegedly co-drafted the paper, although a spokesperson declined to confirm its involvement.

The European Commission will propose a new law later this year that will affect investment in networks, telecoms’ competition with internet services like Skype and Whatsapp, and how newer companies get access to big incumbent operators’ networks.

The German ministries slammed current EU rules which require national regulators to inform the Commission before a new national law is put in place if it could affect the telecoms market.

“In general it doesn’t or no longer seems necessary for the European Commission to review every single measure from every one of the 28 national regulators,” the paper reads.

Germany is expected to inform the executive this spring about its controversial new telecoms decision.

The country’s regulator attracted attention last November for approving a request from telecoms giant Deutsche Telekom to allow the company to use so-called vectoring technology on copper wires to deliver high-speed broadband connections. Competing telecoms companies argue that will keep them from accessing networks.

Oettinger warns against monopolies ahead of new German telecoms rules

Digital Commissioner Günther Oettinger announced yesterday (26 November) that the Commission is getting ready to check upcoming changes in Germany’s telecoms rules and determine whether they’re anti-competitive.

Smaller companies will likely be alarmed by the German government’s demands for the EU reform—they argue regulation is needed for them to compete.

The German position paper says there could be “a reduction of the scope and complexity of the telecoms regulation” that would give a boost to national regulators.

It also calls for an “investment incentive by forgoing ex-ante regulation and instead using the instrument of sector-specific ex-post regulation”.

Deutsche Telekom took a similar position in its response to the European Commission’s public consultation on the telecoms review, which closed in December.

“Substitute the heavy handed, time consuming and intrusive regulatory ex-ante approvals by a light handed regulatory oversight by the NRA [national regulatory authority],” the company’s response read.

A spokesperson for Deutsche Telekom wrote to EURACTIV after this article was published, “The demands to reform EU telecommunications laws formulated in this paper do not go far enough: we need much less regulation to enable higher investments in broadband networks”.

“The regulation of prices should be done away with altogether. Ex-post controls should be focused on identifying potentially abusive behavior,” the spokesperson added.

But others weren’t convinced.

One source who represents competitors in the German telecoms market said, “We have a hard time to believe that this represents the German government’s official position. It would rather appear as if Deutsche Telekom chose to speak with the government’s voice to make its agenda more appealing.”

The German government document also called voice over IP services like Skype and Whatsapp “substitutes for traditional telecoms services” and said they are “direct competition”. But the ministries do not suggest any aggressive regulation of the services.

German Pirate Party MEP Julia Reda (Green/EFA) said it is “worrying that the German government doesn’t see any market failure in the German telecoms market” although the country doesn’t score top marks on broadband rollout. She attributes that to the lack of competition between companies.

Several sources who spoke to EURACTIV about the document said it raised fears that the telecoms legislation would favour big companies.

Negotiations over the net neutrality and roaming legislation that was approved last summer were drawn out when officials couldn’t agree on net neutrality, which incumbent telecoms companies lobbied to have changed.

Spanish EPP MEP Pilar del Castillo (Partido Popular), rapporteur on the legislation, was accused of protecting Spanish telecoms giant Telefónica in the talks, a charge she denies.

“It’s normal to listen to all the stakeholders,” she told EURACTIV.

“Member states do the same thing, governments do the same thing,” she added.

But Austrian Green MEP Michel Reimon (Die Grünen – Die Grüne Alternative), shadow rapporteur on the net neutrality and roaming bill, said he hasn’t seen a sector “with such intense lobbying like the telecoms sector in the last 18 months”.

Small telcos and consumer groups team up against former monopolies

Small telecoms, and consumers and civil liberties advocates launched the NetCompetition alliance on Monday (16 November), at the European Competitive Telecommunications Association (ECTA) conference in Brussels.

Deutsche Telekom spokesperson (full response sent to EURACTIV on the morning of 10 March 2016: "The demands to reform EU telecommunications laws formulated in this paper do not go far enough: we need much less regulation to enable higher investments in broadband networks. The call to increasingly shift from ex-ante to ex-post control is not a new demand; the Monopolies Commission, for example, has been in favor of such a move for some time now. To our knowledge, demands to limit regulation to essential levels and to eliminate unnecessary bureaucratic processes were already expressed by the German government last fall, in its statement on the EU Commission's Digital Single Market Strategy. Unfortunately, the submitted paper does not reflect this. It therefore represents a step back.  Instead, the complex market analyses processes and the "three-criteria test" are to be retained. Granting the national regulatory authority even greater leeway in decision-making does not provide any legal certainty against regulatory intervention in new network investments. On the contrary.  What we need instead is a clear waiver of regulation in areas where infrastructure-based competition already exists. The regulation of prices should be done away with altogether. Ex-post controls should be focused on identifying potentially abusive behavior. In contrast, we expressly welcome the proposal to introduce equal treatment between telecommunications providers and OTT providers that offer similar products and services."

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 highspeed broadband, which competing companies say will crowd out their access to networks. The European Commission is expected to receive notification about the decision this spring, and will then issue its own decision about whether the deal breaks EU law.

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