As an operator with significant market power, Deutsche Telekom has so far been subject to strict, cost-oriented regulation in many areas relating to access and charges. Whether, and if so how, newly built FTTB/H networks will be regulated in future is currently being examined by the Federal Network Agency. The Monopolies Commission supports the regulatory authority’s plan to make the regulation of new networks more flexible and to adapt it to the specific challenges of fibre-optic roll-out. Moving away from strict cost-based regulation of access and tariffs can improve the profitability of risky investments and create new incentives for private-sector roll-out. Furthermore, the potential for cooperation in broadband roll-out should be harnessed. If two or more companies share the costs of network roll-out, the risks associated with roll-out are reduced because the expected utilisation of the networks improves. However, where operators with significant market power participate in such co-investments, (flexible) regulation should not be dispensed with. Otherwise, there would be a risk that these companies could evade regulation at the expense of competition by forming strategic alliances.
In areas where private-sector broadband roll-out is not commercially viable for the foreseeable future, the roll-out of gigabit networks should be supported by public funding. Such support must be structured in such a way as to avoid crowding out or undermining private investment. The proposal to promote the roll-out of new networks through exclusive roll-out rights in the form of concessions should be rejected. The result would be a monopolisation of regional infrastructure and the exclusion of private investment.
Traditional supply-side support should be supplemented by demand-side instruments. For example, time-limited vouchers for broadband connections – so-called ‘gigabit vouchers’ – could help to generate the demand that is essential for private-sector roll-out.
In the mobile communications sector, the roll-out of fifth-generation (5G) mobile networks should be promoted through the early allocation of suitable frequencies by the Federal Network Agency. The allocation of spectrum should be linked to an obligation to offer wholesale products to providers without their own mobile network on non-discriminatory terms. This is the only way to ensure that, alongside the three network operators, service providers can also offer innovative 5G services. This is of great importance for maintaining competition in the mobile communications sector.
It remains necessary to sell the federal government’s stake in Deutsche Telekom AG, amounting to just under 32 per cent, at the earliest opportunity. The sale of the federal government’s stake would put an end to the problematic dual role of the state as both regulator and shareholder.
