Berlin stands firm against EU on telecom rules

A row over telecoms regulation between Germany and the EU has escalated with Berlin saying it will press on with a controversial draft law.

German state secretary Bernd Pfaffenbach said that Berlin is “on firm ground with EU law” with the legislation, which would exempt Deutsche Telekom from competition rules over the construction of a high-speed internet network.

The phone company wants to keep exclusive access to the high-speed VDSL lines for several years, a move it claims is necessary for it to recoup the cost of its investment.

But such monopolies are illegal under EU law, and Berlin’s endorsement of the proposal has caused increasing tension with Brussels over recent months.

A European commission spokesman emphasised on October 30 that Brussels has “serious concerns” over the proposed legislation.

He warned that “proceedings would become unavoidable” should the law be adopted by Berlin.

“The commission does not share the view that competition is the enemy of investment,” he said.

He added that Pfaffenbach’s statement came as a disappointment after months of bilateral talks between the commission and the German regulators over the proposal.

Meanwhile, Pfaffenbach has also lashed out against Brussels plans to regulate telecoms markets at EU level.

“The German government rejects further centralisation and the creation of new bureaucracy,” he declared.

Berlin wants to give more power to the member states in telecoms regulation.

But this goes against the plans set in motion by EU telecoms commissioner Viviane Reding, which involve the strengthening of Brussels regulatory powers in the field.

The commission argues that the widely diverging rules followed by the national telecoms regulators hinder the growth of the internal market in the sector.

Pfaffenbach, on the other hand, says national differences in telecoms regulation, far from being a problem, present “great potential” for competition.

The dispute comes at a sensitive time, with Germany taking over presidency of the EU in January 2007.

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