Monopolies Commission publishes report on the telecommunications markets

On 7 December 2015, the Monopolies Commission published a special report in accordance with its statutory mandate under section 121(2) German Telecommunications Act in which it comments on the state and development of competition on the telecommunications markets and evaluates the regulatory practice of the Federal Network Agency (BNetzA).

From the numerous topics mentioned by the Monopolies Commission, special attention should be paid to the following comments in relation to the future legal developments:

• The Monopolies Commission sees room for further deregulation in various areas. The report in particular advocates the deregulation of the retail market for access to the public telephone network at a fixed location which no longer appears in the European Commission’s current market recommendation. Moreover, the Monopolies Commission welcomes the concept of regionalisation taken up by the Federal Network Agency on the wholesale market (layer-3 bitstream access). However, it says that deregulation has taken place with “unnecessary caution”; it says that it would have been correct to classify far more exchange areas as competitive.
• In the opinion of the Monopolies Commission, there are stronger arguments in favour of deploying vectoring technology in the close range of the main distribution frames (MDF). It maintains that consumers in particular would profit from such a deployment because of the acceleration of broadband roll-out this entails. It says that concerns that deploying vectoring would delay the roll-out of fibre-optic infrastructure were unfounded. However, the Monopolies Commission regards the “greyhound race” anchored in the vectoring-I-decision as preferable to the possibilities for competitors to undertake the vectoring upgrade as stipulated by the Federal Network Agency in the draft on vectoring within the close range of the MDF.
• With regard to the public discussion about the creation of a regulatory “level playing field” between traditional telecommunications services and OTT services, the report holds that harmonisation makes particular sense for services that have similar functions and compete with each other on the retail market. However, it points out that this should not take place as a “knee-jerk reaction” by regulating the new services; instead, it says it is also necessary to look at whether there is a need to maintain the regulations at all.
• Finally, the Monopolies Commission welcomes the compromise regarding network neutrality reached at European level. The report believes that the possibility for internet service providers to offer quality-of-service transmission (in return for payment) is a prerequisite for efficient investments in broadband roll-out in the future.

The press release and the full report can be found at:
http://www.monopolkommission.de/index.php/de/homepage/84-pressemitteilungen/308-telekommunikation-2015-maerkte-im-wandel