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IP/07/889

Brussels, 27 June 2007

Telecoms: Commission to take Germany to Court over its "regulatory holiday" law

In the dispute over Germany's new telecom law, the Commission will refer Germany to the European Court of Justice. Germany has failed to remove new provisions in German law that could grant Deutsche Telekom a 'regulatory holiday' in spite of its dominant position in the broadband market.

“The Commission has repeatedly warned Germany that its new telecom law violates EU Telecom Rules, but without success” said EU Telecom Commissioner Viviane Reding. "We want to ensure Germany can benefit from a healthy, competitive and fully functioning market and encourage both competition and investment in broadband markets. This is why we have decided today to go to Court."

When launching the infringement proceedings against Germany in February, the Commission reiterated its well-known view that the new German law jeopardises the competitive position of Deutsche Telekom's existing competitors and makes it much harder for new competitors to enter German markets (see IP/07/237). The Commission emphasised that the new provisions also attempt to limit the discretion granted to the German telecoms regulator, Bundesnetzagentur, under EU rules which allow it to decide, on the basis of an in-depth market analysis, whether or not to allow competitors access to markets.

Though the Commission had conducted several talks with Germany on this matter and also agreed to prolong the deadline for responding by a further 15 days, in the end Germany in its reply, was unwilling to amend its new national telecoms law to take account of the Commission's concerns. Instead it continued to defend its controversial position.

In May, the Commission had sent Germany a reasoned opinion, thereby opening the second stage of the infringement proceedings (see IP/07/595). However, until today, the German government still maintains its contested interpretation of EU Telecom Rules. Therefore, legal uncertainty remains and the Commission has decided to refer the case now to the European Court of Justice.

Background

The infringement procedure launched at the end of February (see IP/07/237) concerns amendments to the German telecoms law that entered into force that month. These amendments could lead to an effective exemption of Deutsche Telekom AG’s fast internet access network (VDSL) from competition. Such ‘regulatory holidays’ might be granted without consulting the Commission and regulatory authorities in other Member States, as is mandatory under EU telecom rules to ensure transparency and a better-functioning internal market.

Germany adopted the rules in question despite the Commission's early warnings that they were incompatible with EU rules.

Further information on infringement proceedings in the telecom sector: http://ec.europa.eu/information_society/policy/ecomm/implementation_enforcement/


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