German regulator about to ban branded WiFi routers provided by Internet service providers
In July, the Federal Network Agency (FNA) announced that its draft proposal for new transparency rules will be forwarded to the German parliament for approval soon. The rules shall enter into force in autumn this year. The proposed new rules would prevent German Internet service providers (ISPs) from obliging their customers to use a company-branded router. Moreover, ISPs would have to inform their customers that their terminal equipment is interchangeable and, upon request, provide them with all details required for installing alternative router hardware.
Branded routers have been under scrutiny for quite some time in Germany. ISPs argue that standardized routers make technical support easier and better protect their network operations. Consumers’ associations challenge these arguments in light of the security risks inherent in homogenous network ecosystems. They also claim that consumers were illegitimately restricted in freely choosing their preferred network hardware and utilizing Internet services blocked by branded routers. Producers of routers, in addition, claim that exclusive co-operations between ISPs and elected hardware producers are preventing effective competition.
Initially, the FNA denied its competence to cope with these concerns since ISPs had classified their routers as part of their networks. Accepting this definition, the FNA held that the outlets of the branded router – and not the wall plug to which the branded router is connected – marks the network termination point (NTP). As a consequence, the routers fell out of scope of the Regulation of Telecommunication Terminal Equipment which would have given consumers the choice of terminal equipment connected to the network at their side of the NTP (cp. recital (6) of the Universal Service Directive).
Following complaints against this practice and driven by a governmental commitment in the coalition agreement of the current government, the FNA had initiated a survey in 2013 asking telecoms providers and consumers to define the NTP from their perspective. Even in light of the answers received, though, the FNA refrained from including a definition of the NTP in the aforementioned draft set of rules. Thus, it remains questionable whether the FNA will apply the new transparency rules also to so-called “multifunctional” routers commonly deployed by triple-play ISPs which, inter alia, provide essential network functionality at the ISP’s side of the NTP.