Deutsche Telekom (DT) rivals challenged a govt. claim that the in...

German Competitive Carriers Assn. (VATM) called economically unsound a Ministry of Economic Affairs (BMWi) statement that natural monopolies and bottlenecks are “virtually characteristic for the telco market,” and that “temporary monopoly positions represent a key element in dynamic processes of competition” (CD Jan 11 p11). Temporary monopolies represent a “significant element of dynamic competition processes” only if they're not based on historic monopoly structures, the VATM said: If they are, the bottlenecks are permanent and deregulation would only breathe new life into the monopoly. Extending the regulatory holiday to new DT service offerings or products or new markets will create more permanent monopolies, it said. BMWi’s paper, filed in the European Commission’s (EC’s) review of the new e-communications regulatory framework (NRF), also fails to take into account the “proven connection” between effective regulation, the level of competition and total investment in the telecom sector, VATM wrote. DT’s push for a regulatory moratorium on its new network appears to be opposed by most of Europe’s telecom sector, (CD Dec 2 p8). This week, Information Society & Media Comr. Viviane Reding, speaking at Digital Lifestyle Day 2006 in Munich, said Europe needs a “political triple-play” to allow its digital economy to catch up to competitors. Reding said Europe has a “unique responsibility” to ensure that its regulatory framework encourages as much investment as possible. However, she said, “that can, in my view, not mean that regulators except those who build such networks from the rules which guarantee effective competition. I believe in innovative business models, but not in so-called ‘natural monopolies’.” Reding said she hopes the German govt. doesn’t “give in to the pressure to find unilaterally a solution at national level which could only yield benefits at national level in the short term, but would create fundamental problems, both at national level and EU-wide, in the long run.” The BMWi paper seeks to change Germany’s telecom laws as well as to influence thinking on the NRF review, Swidler attorney Axel Spies said on VTAM’s behalf. In a Dec. filing with the U.S. Trade Representative (USTR), the U.S. Council for International Business said Germany’s telecom regulator, BNetZa, “continues to be subject to inappropriate political pressure” from the govt. If BNetzA follows the govt.’s request and refrains from regulating access to DT’s new fiber network, it could violate World Trade Organization rules, Comptel told the USTR.