On November 22, the national consultation procedure on the draft decision submitted by the Federal Network Agency on the conditions for access to Telekom’s fixed network wholesale services was concluded. The decision is of particular relevance for the expansion of fiber optics in Germany, as it defines the framework conditions for future fiber optic regulation.

The German Broadband Association (BREKO) explains:

The procedure for the future regulation of telecommunications companies’ access to Telekom’s fixed network wholesale services is of central importance for the further expansion of fiber optics in Germany. The Federal Network Agency now has the unique opportunity, but also the obligation, to set the course in such a way that competition is promoted and incentives for fiber optic expansion are set in order to maintain and further increase the positive investment climate for fiber optic expansion.

In BREKO’s view, the Federal Network Agency’s approach of “regulation light” with priority of the open access principle over regulatory intervention is the right way to continue the pace of fiber optic expansion. However, BREKO is very critical of the fact that the Federal Network Agency is refraining from consistently implementing the principle of “equivalence of input” (EoI), contrary to the new legal requirements that will apply from December 1, 2021. The concept stipulates that wholesale customers have access to the same processes and systems as well as material and personnel resources as Telekom’s sales department. This means, for example, that the same databases for information on connections and the same technician resources for provisioning and fault clearance can be used, thereby significantly reducing the risk of abuse of the dominant market position.

This central building block for fair regulation of fiber optic networks in the new Telecommunications Act must not be overturned before the Act comes into force. Only a full and consistent implementation of this concept will enable a new and future-oriented regulatory regime.

If the Federal Network Agency maintains its stance, there is a risk that Telekom will transfer its existing market power in copper networks to the fiber optic sector. This would be particularly dangerous for the further expansion of fiber optic networks, as the vast majority of these have so far been built by Telekom’s competitors. The risk of a transfer of market power is also increased by the fact that the Federal Network Agency is also planning to reduce regulation for copper-based wholesale products. For example, the Layer2 bitstream wholesale product, which is a key anchor product for the market, will no longer be subject to ex ante fee approval in future. However, such an easing of regulation is not appropriate for copper-based wholesale services, as it would promote the transfer of market power from copper to fiber optics and thus hinder competition. For the success of a new regulatory system, it is necessary to maintain regulation of copper-based wholesale services in order to enable new approaches to fiber-based wholesale services.

BREKO is counting on the Federal Network Agency to improve the draft decision in order to create the best possible and level playing field for all companies wishing to push ahead with the expansion of fiber optic networks.