New fiber optic networks should not be regulated in the same way as the copper networks that grew out of the former monopoly of Deutsche Telekom. The Federal Network Agency (BNetzA) is in favor of this in its draft decision published on Monday for the future framework conditions for access regulation. The key question is under what conditions other telecommunications companies can obtain access to subscriber lines (“last mile”) managed by Telekom if they are no longer made of copper.
With the proposed “regulation light” for the new gigabit networks, the Federal Network Agency is carrying out a paradigm shift. So far, the telecom access lines have been subject to a differentiated so-called “ex ante” regulation. In the case of fiber optics, the regulatory authority now wants to dispense with interventions such as previous price specifications and specific regulations against discrimination. The President of the Federal Network Agency, Jochen Homann, spoke of a “big step”. This also sends the signal to Telekom to “rapidly expand its fiber-optic network”.
The fees paid by providers of the still dominant Telekom for the use of the fiber optic networks should according to the Regulatory Authority Draft so only be checked in retrospect in the event of anomalies. The BNetzA wants to secure non-discriminatory access to the fiber optic networks of the Telekom by an obligation of equal treatment according to the principle of “equivalence of access” (EoI).
“Equivalence of Input”
The essence of this new approach is that other companies can obtain access under the same system and process conditions as were available to the former monopolist himself. This would allow competitors to use the same databases for information about connections and the same technical resources for provisioning and troubleshooting. This is intended to significantly reduce the risk of abuse of a dominant position.
In order to promote fiber optic expansion as best as possible, the planned regulatory framework also provides for expanded duct access. This should avoid unnecessary civil engineering costs and accelerate network expansion. The fees for the empty conduit access are subject to the project, however, as before, the approval.
The authority essentially intends to maintain the regulation of the copper networks. A new addition here is an obligation for Telekom to notify in good time a migration to fiber optic networks associated with the dismantling of copper infrastructure and to present its plans. The Federal Network Agency does not want to make any specifications for Telekom as to whether and when it has to switch off parts of the copper network. The technology change is “a complex entrepreneurial process” in which the authority should not intervene.
Long term contracts
The long-term agreements reached in the spring between Telekom and its largest customers also extended to the copper network, the authority explains its course, which was largely apparent in 2019. At the same time, the contracts formed a promising basis for both sides for the swift transition to fiber optic networks. In view of the agreements, strict price control in the form of an authorization requirement could be dispensed with.
The BNetzA wants to “put the new instruments into use” as soon as possible. The start date could be the entry into force of further parts of the controversial amendment to the Telecommunications Act (TKG) on December 1st. Interested parties can submit their comments in writing up until November 15th. A public hearing is to take place in front of the decision-making chamber of the authority on November 3rd.
The association of providers of telecommunications and value-added services (VATM) reacted cautiously and positively to the announcement. The draft is “of great importance for the future of Germany as a digital location”, explained VATM managing director Jürgen Grützner. The associated “many opportunities” for broadband expansion, for example through the sensible EoI standard, could only be realized “if the Federal Network Agency operates an extremely consistent and effective abuse control”. This is the only way to ensure competition.
The current dynamic in the expansion of fiber optics should not hide the fact that the Federal Network Agency assesses Telekom as the dominant company in the field of copper and fiber optics, emphasizes the alliance of competitors. The reference to the recently made long-term agreements between Telekom and its largest customers is not relevant. A consensual agreement on prices in line with the market cannot be derived directly from this. The contracts were also “under the impression of a lack of regulation and not really come about on an equal footing”. Market Research Telecast