German regulator promises light-touch on fibre

In an effort to force German telcos onto a fibre diet, regulator Bundesnetzagentur has promised a light-touch regulatory environment for the last-mile.

Jamie Davies

May 28, 2019

2 Min Read
German flag woman happy at Berlin Brandenburg Gate

In an effort to force German telcos onto a fibre diet, regulator Bundesnetzagentur has promised a light-touch regulatory environment for the last-mile.

In the draft regulations, the German regulator is suggesting it would play a relative hands-off role when it comes to driving fibre deployment in the last mile, assuming market leader Deutsche Telekom plays nice with alternative connectivity providers, providing non-discriminatory access to wholesale services.

“Fiber is the technology for the gigabit world, and the successful regulation of Deutsche Telekom’s existing copper network is not transferable to fiber optic networks, and our analysis lays the foundations for a differentiated regulation of copper and fiber,” said Jochen Homann, President of Bundesnetzagentur, the German Federal Network Agency.

“If the non-discriminatory access of competitors to the fiber is guaranteed, we can confine ourselves to a ‘light’ regulation and the draft was future-proof, also with regard to the EU’s legal framework and the right of veto.”

In short, as long as Deutsche Telekom does not try to milk the profits unfairly, the regulator will allow it to conduct business as it sees fit. There is a slight risk in taking this approach, such is the dominant position of DT, but it seems to have weight this danger against the benefits of an accelerated fibre rollout. Perhaps this is done to progress made thus far.

According to the latest statistics from the Fibre to the Home Council Europe, Germany is currently one of the laggards when it comes to fibre deployment. The Council estimates only 2.3% of subscribers across the country have signed up to a fibre connectivity package, considerably below the 13.2% European wide average, and miles off bloc leader Latvia at 50.3%.

While it might be a leading political and economic voice across the continent, from a connectivity perspective Germany is currently one of the ‘also -ran’ category. With digital offering so much to future societies and economies, it will be hopeful to lose this tag sooner rather than later.

In the market definition presented by the regulator for consultation, distinctions between competitive conditions have been claimed between copper and high-performance fibre optic networks. With this in mind, the Bundesnetzagentur has said it would not be sensible to regulate the fibre market in the same way as it provides pricing conditions with copper.

Keeping regulation in the fibre to an absolute minimum should theoretically provide more incentive for private investment. There are of course risks, corporations on numerous occasions have shown them untrustworthy in a self-regulatory environment, but other nations will eagerly anticipate the mid- to long-term outcome of this move. Balancing the regulatory equation is an incredibly difficult task.

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