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New EU telecom rules draw criticism as too complex

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Still a rare sight in Germany in 2018. Source: Imago

The European Union has unveiled a new program to speed up lagging investment in the web, but German telecom providers immediately criticized it as too complex. The goal of the European Electronic Communications Code is to increase investment in high-speed internet, make 5G access readily accessible throughout the bloc and provide safeguards to consumers.

For Deutsche Telekom, the longtime monopoly provider for broadband internet in Germany, the new rules don’t go far enough in freeing it from the requirement to allow rivals access to its infrastructure. The rules try to balance co-investment with access, while not excluding third-party providers who can’t build their own infrastructure or afford co-investment.

The framework program, which must still be approved by member states, was agreed upon by national ministers and the European Parliament. The latter, however, refused to let Telekom off the hook entirely in terms of providing access. For years, the German telecoms giant has lagged in investing in fiber optics for delivering high-speed internet.

“The referees have eased the rules, but they haven’t left the field.”

Jürgen Grützner, VATM alternative providers association

The “preconditions have been tightened to such an extent that the risk of monopolies is reduced,” said Constanze Krehl, a telecoms expert with Germany’s Social Democrats who is a member of the European Parliament. The intent was to provide a predictable environment for co-investment and risk-sharing, easing access requirements as a result.

But the new code, the product of months of debate and discussion, came under attack for simply adding a bundle of new rules to the existing rules, missing the chance to encourage investment with a simpler regulatory framework. Telekom criticized the rules on co-investment highly complex, “the effects of which are difficult to assess.”

Telekom competitors, however, were glad that the former monopolist was still subject to regulation on access. “The referees have eased the rules, but they haven’t left the field,” said Jürgen Grützner, head of the alternative providers association VATM.

In other areas, the code calls for availability of the 5G radio spectrum by 2020, and for licenses to be good for 20 years. This is less than the 25 years sought by providers but more than the average 17 for licenses now.

07 p20 Broadband internet in Germany-01

The framework also caps calls into other EU members at €0.19 a minute. It includes safeguards for consumers, such as an obligatory alert system, ease in seeking refunds, and encryption requirements to protect security.

“The new telecoms rules are an essential building block for Europe’s digital future,” said Mariya Gabriel, member of the European Commission in charge of digital economy. “After several months of tough negotiations, we have agreed on bold and balanced rules to provide faster access to radio spectrum, better services and more protection for consumers, as well as greater investment in very high-speed networks.”

Till Hoppe is a Brussels correspondent for Handelsblatt. Ina Karabasz covers telecoms from Düsseldorf. Darrell Delamaide adapted this article into English for Handelsblatt Global. To contact the authors: hoppe@handelsblatt.com and karabasz@handelsblatt.com.

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