Competitors Await Ruling on Access to the Fiber Loop
German telecom regulator BNetzA’s decision to regulate bitstream access as part of the wholesale broadband access market won approval from the European Commission (EC) and wary praise from Deutsche Telekom (DT) rivals. At first BNetzA sought to carve bitstream, or VDSL, from the market definition, a move DT sought. The incumbent, which plans to spend several billion euro deploying a fiber network to replace copper lines, asked BNetzA to deregulate wholesale and subscriber prices on fiber lines. Competitors said they'll wait to see how BNetzA ensures the access they need.
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DT’s initial proposal outraged rivals, who said a fiber network won’t support alternative DSL. It also drew serious doubts at the EC, which asked why fiber loops should get different treatment from copper with regard to antitrust remedies. BNetzA’s amended measure will give DT rivals equal footing by enabling them to buy bitstream products wholesale and compete for retail customers, the EC said. DT must give competitors access to its broadband infrastructure, including, in principle, the VDSL network.
DT efforts to “walk away from regulation of its new broadband glass fiber networks have failed,” said Axel Spies, a German attorney representing the German Competitive Carriers Assn. (VATM). The EC didn’t accept DT claim that VDSL is a new market, so the ball is back in BNetzA’s court to impose concrete remedies requiring incumbent provide competitors with access. Copper or fiber, access to the network must be safeguarded at fair prices on a technology-neutral basis. Even a limited moratorium on VDSL regulation would ravage competition, Spies said.
There is another reason why the fight isn’t yet over, Spies said. Any new products DT creates for its customers based on VDSL would escape controls. “We hope that this won’t open an exit door” for the incumbent to avoid oversight, he said.
BNetzA also ruled that Germany’s international call market is so competitive no further sector-specific controls are needed, a move welcomed by the EC. DT still dominates the retail access and calls markets for residential and non-residential customers, but its share, down to 40%, appears likely to shrink even more, leaving the incumbent without significant market power, the Commission said. BNetzA has included VoIP in the market definition of Germany’s calls markets, meaning it could face regulation if anticompetitive behavior arises.