The European Commission asked the German regulatory authority, the Federal Network Agency, Monday to do more to ensure a level playing field in the market for high-speed optical fiber connections to the home or office.
It is asking the regulator to help secure adequate access to the market for competitors to Deutsche Telekom AG.
The Commission -- the executive and regulatory branch of the European Union -- also asked the national regulator to complete its market analysis for access to the new super fast networks, dubbed next-generation networks (NGNs).
"The Commission is keen to ensure that NGNs can be deployed and made accessible in a consistent and transparent manner across Europe," said Viviane Reding, EU telecom commissioner. "It is vital that we ensure effective competition and the legal certainty necessary for all market players to invest in new products and services that will benefit consumers."
In May the Federal Network Agency notified the Commission of rules designed to force Deutsche Telekom to grant competitors access to its copper fixed telephone network. As Deutsche Telekom is upgrading its network by rolling out optical fibre-based connections, these rules also apply during the transition to the new infrastructure.
In a letter sent to the national regulator Monday, the Commission did not challenge its market definition of local loop unbundling but raised a number of issues on regulatory remedies. Having examined the rules, the Commission said they were a step in the right direction but ultimately they have failed to ensure fair competition.
"There are more issues to be tackled, we want more remedies," said Martin Selmayr, a Commission spokesman in charge of telecom-related issues, at a press conference Monday.
The rollout of fiber closer to the customers, normally to the street cabinets, enables the provision of high bandwidth services but it raises important issues regarding the position of alternative operators that currently benefit from access obligations of Deutsche Telekom's existing networks.
As alternative operators in Germany roll out their own infrastructure to local exchanges, these operators now need an economic way of reaching the new access points provided in street cabinets.
The Commission is asking the German telecom regulator to guarantee that access to Deutsche Telekom's existing copper network by its competitors remains efficient during the rollout of NGNs.
In the new networks, the number of access points required by an alternative operator will be many times higher than that for the traditional fixed telephony network. In many cases there would no longer be a business case for alternative operators to extend their network down to the street cabinets, the Commission said.
Therefore, the Commission stresses the importance of ensuring appropriate alternative access solutions as NGNs are deployed.
The Commission can't force the national regulator to take action but its opinion cannot be ignored, Selmayr said.
At the same time, the deployment of NGNs raises questions as to how competitors may continue benefiting from current access obligations, in the future, while maintaining incentives to invest for both the incumbent and new entrants.
Deutsche Telekom has begun delivering IP (Internet Protocol) services such as telephony, television and Internet access over VDSL (Very high bit rate DSL) to customers in some German cities.
It has asked the regulator to exempt its VDSL service from a requirement that it lease its infrastructure to competitors on reasonable terms, claiming that without the exclusive right to use the infrastructure, it cannot fund the necessary investment.