The German govt. could be facing a trade battle if it amends its ...

saying the inclusion of new markets in the market regulation called for by the telecom act “shall, as a rule, only apply if facts justify the assumption that otherwise the development of a sustained competitive market in the areas of telecoms services and networks would be impeded in the long run,” said Axel Spies, a German lawyer at Swidler Berlin who represents the German Common Carriers Assn. The provision said that, before it imposes antitrust remedies under the section, telecom regulator BNetzA must consider their proportionality and, in particular, whether they're in line with the goal of promoting efficient infrastructure investment and supporting innovation. The govt.’s use of “long run” indicates that regulation of the incumbent could be lifted for the “short term,” whatever the ministry believes that is, Spies said. That would let DT roll out its fiber VDSL network using empty ducts and pipes taxpayers have already paid for while avoiding price controls and other preventive measures. The negative consequences of remonopolization for consumers are huge, particularly in the broadband sector, he said. If the law is enacted and DT is exempted from regulation, the ministry “also risks a lawsuit in Geneva at the WTO because what it proposes is obviously not in line with Germany’s WTO commitments” to provide equal network access, Spies said. The possibility of a regulatory holiday for DT has sparked concern and intense discussion in Europe’s telecom sector. No one appears to favor the proposal except DT; Information Society & Media Comr. Viviane Reding has made it clear on several occasions that she doesn’t like the idea and BNetzA said it wouldn’t approve it (CD Dec 27 p6). But the amendment got legs after the recent federal election. One plank of new coalition govt.’s agreement was to “create incentives for the creation and the build-out of modern broadband telecommunications networks to safeguard the future of Germany as a place for industry and research. For this purpose, the new markets that will arise due to the investments must be kept free of regulatory intervention for a certain time period to provide planning certainty for the investor. A legislate guarantee to this end must be introduced into the new bill of the Telecommunications Act.”