German Government Presents Draft Bill Facilitating the Deployment of High-Speed Electronic Communications Networks (“DigiNet Act”)

On 27 January 2016, the federal cabinet presented a draft bill aiming to facilitate the roll-out of high-speed digital networks (the German “DigiNetzG”). The essential purpose of the draft is to transpose the requirements of the European Cost Reduction Directive (2014/61/EU), which aims at reducing the costs of deploying broadband networks. The main approach is allowing communications network operators the joint use of existing (passive) infrastructure. However, the cabinet’s draft goes beyond the mere implementation of the directive by introducing other provisions as well.

I. Implementation of the Cost Reduction Directive

We have set out the following key provisions of the “DigiNet Act” resulting from the Cost Reduction Directive:

1. Requirement to Allow Shared Use

Utilities network operators – i.e. operators of telecommunications, electricity, gas, heating and sewage networks – will be obliged to give telecommunications companies wanting to roll out high-speed networks, access to their physical infrastructures and to allow the relevant components to be installed. This relates to existing ducts, conduits, manholes or other supporting constructions, for example. While the Cost Reduction Directive defines high-speed networks as having transmission rates of at least 30 Mbps, the “DigiNetzG” requires a minimum speed of 50 Mbps.

Network operators will have to offer this shared use on “fair and reasonable terms”. This includes not only the price but other contractual provisions such as those relating to securities to be provided or to contractual penalties.

The draft bill contains a wide range of grounds for refusing the above obligations, for example if the infrastructure is not technically suitable, if malfunctions are to be expected or if there is or will be a lack of available space. Other grounds for exclusion can become relevant if the security and integrity of the network, national security, public health and safety or the protection of business and trade secrets would be affected.

A planned dispute resolution body at the Federal Network Agency will be responsible for settling differences of opinion when determining reasonable conditions for shared use.

2. Coordination of Civil Works

The draft intends to achieve another cost-cutting effect by coordinating construction works on utilities networks. Telecommunication network operators will be able to apply to enter into coordination agreements with the network operators. If publicly (co-)funded civil works are involved, network operators will be obliged to grant permission on “reasonable” applications. According to the draft, applications are deemed reasonable in particular if no additional costs arise, except for minor delays and additional expenditure for processing the coordination application. The application can be rejected if it concerns parts of critical infrastructure and if the network operator would therefore have to take disproportionate measures to comply with its statutory obligations. For reasons of simplification, the Federal Network Agency will publish standards as to how the costs of coordination can be allocated to the applicants.

3. Transparency

Finally, operators of public networks will be required to disclose details of their passive network infrastructures and any construction work that is either planned or ongoing if requested to do so. Both telecommunications companies and the Federal Network Agency – which as the single information point enters the information into its infrastructure atlas – are entitled to request such information. If a network operator has already passed on information to the Federal Network Agency, it can refer companies with queries to the Agency.

II. Other Provisions

Other amendments to the German Telecommunications Act reach further than the Cost Reduction Directive’s requirements. If publicly (co-)funded civil works on traffic infrastructure will take place, it has to be ensured that optic fibre is laid if there is a need. In the case of new developments, this obligation even applies regardless of the need.

Another provision modifies the right-of-way in the Telecommunications Act so that it is possible to lay telecommunications lines for optic fibre closer to the surface.

III. Summary and Outlook

The “DigiNetzG” means far-reaching changes for investment activities of all companies operating networks. The draft still has to be adopted by the upper and lower houses of the German parliament (Bundestag and Bundesrat). It remains to be seen, which changes will be made to the draft during the parliamentary process.