The head of Europe’s largest telecoms operator, Deutsche Telekom AG, has taken another shot at European telecoms commissioner Viviane Reding over the continuing war for exemptions from regulation to domestic telecom carriers investing in new technologies.
DT chief executive Kai-Uwe Ricke has now publicly criticised recent draft legislation of Germany’s telecom laws. Ricke said that the recent draft has to be revised substantially in order to guarantee that DT would not be forced to share its new network.
The latest salvo came after a very public spate recently between the office of the European telecoms commissioner and Germany’s Federal Networks Agency. Last year, the German telecoms regulator had agreed to virtually no government regulation for two to three years for DT’s new 3bn euro ($3.5bn) high-speed fiber-optic network.
The disagreement eventually forced the German government to back down after rivals accused it of blatant protectionism. The problem came after the new German coalition government, which took power last November, had already agreed to exempt DT’s network from regulation in order to ensure it achieved adequate returns.
The European telecoms commissioner, Viviane Reding, was furious and sent a letter to Germany’s Federal Networks Agency saying she had serious concerns about the German regulator’s decision to take a hands-off approach to DT’s new network.
The measure also attracted strong criticism from DT’s foreign competitors operating in Germany. They were highly critical of the stance of the German government, and said it would allow DT to set excessive access prices, or even prevent access to its network. They also said it could be a dangerous precedent for other countries.
The Bonn, Germany-based carrier had said it would spend 3bn euros ($3.5bn) over two years to upgrade large parts of its network. The upgrade means the carrier would strip out large parts of its old copper wire network and replace it with high-capacity fiber-optic cable capable of speeds of up to 50MBps. The roll-out would then cover 10 unnamed German cities by mid-2006, and by 2007 this would reach 50 of Germany’s largest cities.
In the end, the pressure from Reding forced Germany to back down. But this humiliating climb-down was not forgotten in Berlin, and Germany now wants a more flexible approach from the European regulators, arguing that businesses need to be able to recoup the cost of their investments if they are to remain competitive.
Reding responded last month and issued a blunt warning to European member states, reminding them about the rules governing telecom investments.
It is absolutely crucial that we all understand that this (common rules agreed by member states) is a European process, and that the European Commission cannot tolerate fragmented national approaches which may favor only the former national incumbents and could thereby block the development of a true European eCommunications market, she said.
Now Kai-Uwe Ricke has told reporters Thursday that the Economics Ministry’s proposals are lacking in commitment to keep new telecom sectors unregulated and aren’t defined clearly enough to base long-term strategies on.
We do not want to be regulated, Ricke said, according to Heise Online. That does not mean we want a monopoly, but just open competition, either between infrastructures or on our network as long as we can freely negotiate prices with our competitors.