The roll-out of gigabit networks is being hampered by the lack of economic viability of roll-out projects in many areas, bureaucratic hurdles and a shortage of civil engineering capacity. The Monopolies Commission therefore advocates the creation of an investment-friendly regulatory framework, without neglecting the objective of effective competition. In order to reduce the intensity of access and pricing regulation for fibre-optic networks, the imposition of strict non-discrimination rules should be considered. This would oblige Deutsche Telekom, as a provider with significant market power, to grant external customers the same network access as it provides to its own retail division. Furthermore, bureaucratic and legal barriers for companies carrying out roll-out work – such as those relating to the use of alternative laying methods – must be systematically removed.
The planned extension of fixed-line subsidies to areas where high-speed infrastructure is already in place (‘grey spots’) threatens to crowd out private-sector roll-out on a large scale. There is no mechanism in place to channel funding to where the actual coverage situation is worst and where subsidised roll-out would yield the greatest benefit. It therefore seems necessary to maintain minimum bandwidth thresholds, below which an area would only become eligible for funding. Gigabit vouchers should be used to complement traditional roll-out funding. These boost demand for gigabit-capable broadband connections and improve the profitability of roll-out projects.
In the mobile communications sector, voluntary agreements between network operators on the shared use of infrastructure can be a suitable tool for facilitating private-sector roll-out. The Monopolies Commission, however, takes a critical view of the Federal Government’s proposals to dispense with the tried-and-tested method of auctioning spectrum and, in future, to extend mobile spectrum licences without reallocation or to make them available in return for roll-out commitments. Auctions are also the most suitable means, in the interests of consumers, of ensuring efficient use of spectrum and enabling new providers to enter the market.
Furthermore, the Federal Government plans to support the roll-out of mobile networks in unserved areas in future through a dedicated federal programme for mobile communications funding. In the Monopolies Commission’s view, such funding could be channelled at local authority level or organised in the form of a reverse auction. In this process, the roll-out in unserved areas is awarded to the company with the lowest subsidy requirement. The federal mobile communications infrastructure company planned as part of the Federal Government’s mobile communications strategy can usefully complement a subsidised network roll-out, provided it remains limited to supporting administrative and advisory tasks.
