December 4, 2017 / 9:06 AM / 2 years ago

German regulator flags easier regulation for broadband build-out

BONN, Germany (Reuters) - Germany’s telecoms industry should accelerate the build-out of the country’s high-speed broadband network, its regulator said on Monday, adding it was considering easier regulation on glass-fiber internet to speed the process.

Germany has set a goal of providing nationwide internet with speeds of at least 50 megabits per second (mbit/s) in 2018 but the technology relied on by market leader Deutsche Telekom - based on the old copper telephone network - cannot be easily upgraded further.

That makes it harder to realize the vision of a “Gigabit society” in which all businesses and households would have access to superfast glass fiber connections by 2025 - at a cost of 80 billion euros ($95 billion) or more.

“We can’t delay further investments into the distant future and risk missing out on the chances of digitalization,” said Jochen Homann, president of the Federal Network Agency (BNetzA), presenting its annual reports on the telecoms and postal markets.

Germany’s engineering industry has sounded the alarm on the lack of access to high-speed internet, urging the next government to invest up to 40 billion euros to enable connected, automated manufacturing to take off.

Chancellor Angela Merkel had discussed investing 20 billion euros in glass fiber by 2025 in talks on forming a coalition that collapsed last month. Her conservatives are now exploring reviving their ruling alliance with the Social Democrats.


Addressing a news conference, Homann conceded that Germany was “pretty much at the back” of the international field when it comes to access to glass-fiber internet.

He said the BNetzA was considering a more flexible regulatory regime on glass fiber that would allow companies to cooperate in building out the network to save costs, and depart from strict cost-plus rules on pricing.

That view was supported by Germany’s Monopoly Commission, an advisory panel to the government, which in a separate report opposed calls by Deutsche Telekom CEO Tim Hoettges to completely deregulate glass fiber.

“We oppose radical solutions - such as completely abandoning regulation,” the commission’s point person for telecoms, Juergen Kuehling, told the same news conference. “We believe that more flexible regulation would be a sufficient incentive to invest in building out glass fiber.”

Kuehling also called for the full privatization of Deutsche Telekom, which remains 31.5 percent state-owned, to eliminate a conflict of interest in which the government is “both player and referee” on the telecoms market.

The VATM lobby group, which represents Deutsche Telekom’s rivals, welcomed the Monopoly Commission’s call for lighter-touch regulation while ruling out a free-for-all in laying fiber connections to buildings and homes.

Around 77 percent of households in Europe’s largest economy have access to the internet at speeds of 50 mbit/s and upward, the BNetzA estimates. That figure rises to 90 percent in towns but falls to just 36 percent in rural areas.

Around 13 percent of Germany’s 32.5 million broadband customers enjoy internet speeds of 100 mbit/s and more - double the level seen in mid-2015.

Demand for ultra-high-speed internet delivered via glass fiber remains very low, the BNetzA said. Even though 2.7 million households could have access to such connections, only a quarter have signed up. That will change.

“With increasing demands for performance it is clear that we have to think beyond the 50 mbit/s goal that was set for 2018. Germany needs Gigabit-capable infrastructure,” Homann also said.

The BNetzA said that in preparation for the rollout of 5G services it would make available new mobile spectrum in 2018. The mobile standard would make it possible to put self-driving cars on the streets and run connected “smart” home appliances.

Editing by Ludwig Burger and Mark Potter

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