Sunday, August 20, 2006

EC Backs Measure to Open Deutsche Telekom's Broadband Networks

The European Commission endorsed a regulatory measure that would give new competitive carriers bitstream access to German consumers via the broadband networks of Deutsche Telekom.

The measure, which is also backed by the German telecom regulator Bundesnetzagentur (BNetzA), is meant to remedy the position of dominance of Deutsche Telekom on the German broadband market.

The Commission said it believes bitstream access be competitive carriers should be required regardless of the technology used by Deutsche Telekom (ADSL2, ADSL2+, SDSL and VDSL). The Commission asks the German regulator to ensure that the remedy is applied without further delay, in line with EU law, and that final clarifications are made in the interest of legal certainty on the German broadband market.

The remedy will require Deutsche Telekom to open its broadband networks to competitors by allowing them to purchase a high speed access link to the customer premises from Deutsche Telekom with transmission capacity for broadband data in both direction, thus enabling new entrants to offer their own, value-added services to end users. The price for such bitstream access needs to be approved in advance by BNetzA. Bitstream access will need to be granted by Deutsche Telekom also to its new VDSL infrastructure currently built in several German cities.

The European Commission also said bitstream access prices should prevent any margin squeeze and should therefore be sufficiently below Deutsche Telekom's retail prices or, alternatively, be calculated efficiently by the regulator on the basis of actual costs, as provided in EU law.

"I welcome that in spite of considerable political pressure, the German regulator has proved its independence by proposing to the Commission, as required by EU law, to remedy the well-known competition problems on the German broadband market", commented Information Society and Media Commissioner Viviane Reding.

"To open the German broadband market to competition will lead to better services and lower internet access prices for consumers. I however note that time is a crucial factor. While bitstream access has already been available to new market entrants in the vast majority of EU Member States for a number of years, it has taken the German regulator more than three years since the entry into force of the EU telecom rules and more than eight months since the finding of dominance of Deutsche Telekom to take the required measures. I therefore urge the German regulator to implement this remedy now without any further delay to ensure that both competitors and consumers can profit from fairer competition also in Germany."

  • Earlier this month, Deutsche Telekom's T-Com division began offering consumer broadband access at up to 50 Mbps over its new VDSL network in ten cities. The service delivers voice communication, Internet usage and IPTV via a single line.

  • In December 2005, the German telecom regulator BNetzA issued a report stating that Deutsche Telekom holds a position of significant market power on the German wholesale broadband access market.

See also