Update 28 August 2006: The European Commission’s letter has now been published. Pages 3-6 of the letter contain comments on the regulatory obligations proposed by the German regulatory authority BNetzA.

Key comments by the European Commission in its letter SG-Greffe(2006)D/204686 include the following:

Scope of the access obligation

The European Commission welcomes that the access obligation includes bitstream over all variants of infrastructure, including ADSL2, ADSL2+, SDSL and VDSL “unless they are not substitutes to other bitstream access products”, and goes on to comment:

"[…] Against this background and in order to provide regulatory certainty the Commission finds it appropriate for BNetzA to set out explicitly that remedies in the present case also relate to the VDSL network. In view of the VDSL-based retail products that DT has recently launched, such an application of remedies should no longer be postponed.” and […] the Commission has at present no indication of a lack of substitution between VDSL and other xDSL products, whether at retail or at wholesale level. It is recalled in particular that a mere upgrade of an existing service (such as an offering with a higher bandwidth) is not considered in itself to constitute a new market. The Commission hence considers that the question about the substitutability between bitstream access to VDSL connections and other forms of bitstream access should be answered positively from the outset. Excluding DT’s VDSL-based infrastructure from the access obligation would jeopardise the effectiveness of that obligation to the detriment of competition in the downstream market and of the consumer. […]"

Stand alone bitstream access

The letter also reveals that the European Commission asked BNetzA to confirm whether “stand-alone bitstream access” (i.e. wholesale “naked-DSL”, the ability to obtain wholesale broadband access without a requirement for the end-user to have a PSTN/ISDN subscription from Deutsche Telekom) would be mandated, and that BNetzA replied that this would be introduced “in parallel with the European harmonised development”.

The European Commission comments on this as follows:

"The Commission asks BNetzA to impose this remedy without delay in order to enable competitors to offer broadband connections to end customers without an obligation to buy a telephone connection from DT. This would stimulate competition in particular in rural areas less susceptible to local loop unbundling, where competition on the retail services is particularly weak in Germany. Such an offer will also provide an adequate means to increase competition in the retail voice markets via Voice over IP."

Effective price regulation

The European Commission criticises BNetzA’s lack of clarity in its approach to wholesale charge regulation for bitstream access, rejects benchmarking as a means to set the wholesale charges, and concludes its comments on this issue as follows:

"[…] the Commission asks BNetzA to impose either retail minus or cost-oriented price control. If BNetzA chooses cost-orientation, it is invited, in order to increase transparency, to communicate to the market players a cost model on which cost-orientation will be based."

The European Commission’s letter also contains information and comments on the number of points of connection/access (confirmation that the competitors can freely choose the points and are not obliged to interconnect at all points) and insists that BNetzA should swiftly notify its proposals for ATM bitstream access. 

T-REGS Note: It will be seen from the citations above that the European Commission has issued an exceptionally strongly worded statement. These are comments of which the German regulatory authority ‘shall take the utmost account’ (article 7.5 of the Framework Directive 2002/21/EC) but are not directly applicable in the Member State concerned. BNetzA must now adopt a final decision, and Deutsche Telekom will be required to publish a reference offer for IP bitstream access within 3 months from the publication of the final BNetzA decision. 

The full text of the European Commission's letter SG-Greffe(2006)D/204686 can be accessed by clicking here.

For a discussion of IP bitstream access and issues relating to VDSL roll-out in Germany, please contact This e-mail address is being protected from spam bots, you need JavaScript enabled to view it . 

(the previous T-REGS news item on this topic - containing links to the European Commission press release and FAQ - remains available) 

Today's publications, whilst not encompassing the actual letter addressed to the BNetzA, which will only be published by the European Commission on 25 Aug 2006, do contain key elements of the European Commission's eCommunications Consultation Task Force (eCCTF) precedent-setting letter/decision.

The press release and FAQ provide a preview of the assessment that has been made by the European Commission of the notification made by the German regulatory authority BNetzA, covering, amongst others, the highly contentious issues of 'naked DSL' and of wholesale access to Deutsche Telecom's VDSL-based access network (as part of wholesale broadband access more generally). 

T-REGS will report in more detail on this case after the European Commission or the BNetzA releases the full text of the European Commission letter on IP bitstream remedies in Germany.

In the meantime, the European Commissions' press release can be accessed by clicking here and the related FAQ can be accessed by clicking here.