COMPTEL CONCERNED ABOUT AMENDED GERMAN TELECOM ACT
Proposed amendments to the German Telecom Act could harm the development of a sustainable competitive market in that country, CompTel said in comments filed with the German Federal Ministry of Economics & Labor (BMWA). CompTel Exec. Vp-Gen. Counsel Carol Bischoff said if the amendments were adopted in their current form, “competitive carriers would face numerous unnecessary obstacles. Moreover, the significant investments CompTel member companies already have made in deploying telecom facilities and services, as well as the associated consumer benefits, would be put in serious jeopardy.” The draft act released by the BMWA in April will be sent to the Federal Cabinet for a vote in the next few weeks, and after that will go to the Federal Parliament.
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The BMWA began a review of the telecom act last year after the European Commission (EC) released new pan-European telecom rules aimed at boosting competition in the telecom sector, and gave the 15 member states until July 25 to implement the regulatory package. However, CompTel argued that the draft wasn’t in compliance with European Union (EU) rules: “Counter to EU directives, the draft law explicitly establishes the date for initiation of market analysis to be no sooner than when the proposed German law takes effect.” It said the draft law excluded so-called “ex-ante regulation” of an end-user tariff if the carrier wasn’t dominant in the resale market. “Not only is this incompatible with the EU Regulatory Package, which does not allow EU member states to link retail and wholesale markets as a precondition for ex- ante regulation, the draft law would have a significant impact on regulation of mobile termination and has the potential for abuse by interested parties with power in the wholesale market,” CompTel said.
Incumbent Deutsche Telekom (DT) would be the “primary beneficiary” of local carrier selection as “the draft law retains a legal obligation for carriers that offer the recently implemented ‘local carrier selection’ service to pay some of the costs of customer access,” CompTel said. It said the draft also failed to ensure that competitors had permanent access to unbundled local loops. It said DT, which is 43% owned by the govt., remained the “principle bottleneck” for local access leased lines. It said the draft law contradicted the EU market definition recommendation by granting a right of access only in relation to the capacity available, but not for capacity to be installed in the future. The EC recently imposed a $12 million euro fine on DT for anticompetitive behavior.
The draft has “insufficient implementation of a broad range of regulatory instruments,” CompTel said. It said the draft omitted several necessary regulatory measures, including the lack of transparency on accounting, technical specifications and tariffs and didn’t ensure that all parties were allowed to comment on every draft measure. CompTel expressed concerns that the structure, which would give the BMWA the ability to appoint the president and the vice presidents of the German telecom regulator RegTP, would lead to the Ministry’s having “undue political influence over RegTP’s Presidential Chamber.” It also said the costs incurred by competitors who must comply with surveillance rules under the existing German telecom act would “increase significantly” under the draft act, which calls for surveillance over all electronic communications networks.
Germany, as well as France, the Netherlands and Belgium, are likely to miss the July 25 deadline for implementation of the telecom package, said Axel Spies, attorney at Swidler Berlin Shereff Friedman. However, he said it was “doubtful the EU will impose any sanctions as it came up with the market recommendations later than expected.” Per Haugaard, a spokesman for EU Information Society Comr. Erkki Liikanen, said “the deadline is a legal obligation, and if it’s not met, it will be a violation of the EU law.” He said the Commission reserved the right to take the laggards to the European Court of Justice if the delay in implementing the package was “substantial.” However, he said legal action was “the last resort… We are convinced member states are doing what they can to implement” the package. He said the Commission was “working very actively with [Germany and France] to help them meet the deadline… It takes more time [for them to implement the rules] than they expected, but we urge them to meet the deadline.” Spies said he hoped the new regulation would be implemented by the end of the year.