Oettinger warns against monopolies ahead of new German telecoms rules

EU Digital Commissioner Günther Oettinger

Günther Oettinger [European Commission]

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.

“We’ll check whether a decision from the Bundesnetzagentur harms competition and leads to remonopolisation,” Oettinger said via video message at a conference held in Berlin by BREKO, the association of competitive German telecoms operators.

Germany’s federal network agency, the Bundesnetzagentur, released a draft decision on Monday (22 November) announcing new rules that will allow Deutsche Telekom to use its controversial vectoring technology on copper wiring and connect up to six million additional homes in the country with highspeed broadband.

Smaller telecoms companies protested that the change in Germany’s telecoms regulations would crowd out competition. The Bundesnetzagentur will require Deutsche Telekom to share its networks with competitors—but not in areas where there already are other networks in place.

BREKO slammed the draft decision, calling it a “fatal sign for competition” and “obviously politically driven”.

The Bundesnetzagentur is expected to deliver a final decision in January and is accepting public comments on the draft version until then.

>>Read: Germany to invest heavily in broadband expansion

Speaking to attendees at BREKO’s conference yesterday about the agency’s go ahead for Deutsche Telekom to use vectoring, Oettinger appeared concerned that the decision could hurt competitors.

“There’s been a lot of competition in the last twenty years. Our common goal has to be maintaining it and preventing remonopolisation or other developments,” Oettinger said.

After the final decision is published early next year, the Bundesnetzagentur will inform the European Commission, drawing on a provision in EU telecoms law that requires national authorities to contact the Commission when it regulates to fix market problems.

“We’ll have to check according to article 7 whether a potential decision from the Bundesnetzagentur meets our goals of functioning and fair competition or whether it amounts to monopolistic developments that no one wants,” Oettinger added.

Commission sources confirmed to EURACTIV that the executive will start investigating the decision once its notified by the German agency in early 2016 and will decide within one month if the new regulation merits a longer probe to determine whether it breaks EU law.

The review of the agency’s decision is expected to push the Commission to come out with a broader verdict on whether vectoring can be allowed in broadband infrastructure projects that receive EU funds. In June, the Commission announced that it was looking into whether vectoring could be anticompetitive.

Critics of vectoring argue the method is a short-term solution that Deutsche Telekom advocates for in order to maintain control over its copper networks and postpone a transition to fibre, which can provide high speed internet but is expensive to build. Vectoring also forces a group of households to be serviced by one provider, blocking competitors from individual consumers.

The German government wants all households to have broadband connections of 50 megabits per second by 2018 and is investing €2.7 billion in infrastructure. This summer, the Commission announced that €3 billion in state aid funds would go to broadband infrastructure in Germany.

>>Read: Czech broadband money caught in political intrigue

Works to dig new broadband network lines and connect them to homes can be very costly. Returns push operators to invest, but not in areas with a low population density where costs are likely to exceed gains.

As a consequence, many European regions are left without proper coverage.

Standard broadband covered 96.1% of total EU households in 2013, but the percentage goes down to 83.2% for rural homes, according to the European Commission.

Moreover, standard connections are usually low-speed. Only 14.8% of European fixed broadband lines provide a headline download speed of at least 30 Megabyte per second (Mbps), which is the minimum required to access certain services online, such as streaming. Some of them go as low as 2 Mbps.

Often, the headline speed is not even provided. The average speed is 75% lower than promised, says the European Commission. In the UK and in France the actual speed "can be as low as 45% of advertised speed,” according to the EU executive.

Optical fibre networks, also known as Next Generation Access networks (NGA), are instead able to provide Internet at a speed of at least 30 Mbps.

NGAs already connect over half of EU households, which is still far behind the official target of having all citizens covered by high-speed Internet of at least 30 Mbps by 2020.

  • 10 December 2015: public hearing on the draft decision at the Bundesnetzagentur's office in Bonn
  • until 18 January 2016: public consultation on the draft decision

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