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German regulator approves controversial DT VDSL plans

German regulator approves controversial DT VDSL plans

The German Federal Network Agency (BNetzA) published its draft decision on changes to the regulatory framework for access to Deutsche Telekom’s last-mile network. The decision takes account of DT’s plans to roll out VDSL2 vectoring technology, which competitors have said could limit their access to the copper network. The regulator said that DT will still be required to grant access to the last mile. If this is no longer possible at certain sites after the VDSL upgrade, then Telekom must provide its competitors a local, virtually unbundled access product (VULA) as a replacement for the last mile, which must be very similar to the characteristics of the unbundled local loop service. The regulator said the decision is expected to promote broadband expansion and fair competition, while also laying the groundwork for future infrastructure-based competition through new fibre networks. 

The draft decision was met with criticism from industry players. German broadband operators association Breko said it was a “fatal signal” to competition, creating very high barriers for competitors looking to avoid the loss of MDF access at the local exchange. This “(quasi) exclusive expansion of local exchanges” for DT could also slow the digitisation of the German economy and result in economic problems, Breko said. Breko director Stephan Albers noted that three-quarters of FTTH/FTTB connections in rural, under-supplied areas are rolled out by competitors. Without including access to the local exchanges, the fibre roll-out is often not profitable. Albers suggested that the BNetzA breached its role as an independent regulator and neutral referee, effectively re-establishing Telekom’s monopoly. In anticipation of this decision, Breko submitted a number of offers for expansion and investments to the BNetzA to provide future-proof fibre connections.

Juergen Gruetzner, head of German alternative operators association VATM, agreed that the draft is not a “fair compromise”, as the right to unbundling has been abandoned for a supposed investment obligation from the regulated operator. Gruetzner criticised this, noting that DT did not commit in a legally binding manner to an expansion of 50 Mbps services, nor to a nationwide expansion by 2018. He said the decision granted DT a monopoly on vectoring at local exchanges. Hundreds of cabinets that competitors have listed for vectoring and earmarked for investments will not be considered. Gruetzner added that while the draft promotes the VDSL expansion, German government ministers highlighted at the recent IT Summit that the 50 Mbps supply by 2018 was only an interim goal. The government’s goal to achieve fibre expansion as soon as possible with the investments of all competitors cannot be reached with this decision, he concluded.

The regulator’s decision remains subject to a public consultation, open for comment until 18 January 2016. A public hearing on the proposal will also be held in Berlin 10 December. 

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