By Michelle Fitzpatrick - 17th May 2006
The EU has threatened legal action if Germany proceeds with plans to give Deutsche Telekom a monopoly over a new broadband network.
The German government approved a draft version of a new law on Wednesday that would grant the former state-owned giant privileged access to VDSL, an ultra-fast network that can transmit data three times as fast as conventional lines.
Viviane Reding, European telecommunications commissioner, has threatened Berlin with legal action should the draft law be passed into the statute books.
“We cannot afford to create new monopolies out of short-term political opportunism,” she said.
“Should the German parliament follow the proposal of the government, I am determined to open an infringement procedure against Germany.”
Under the agreement, Deutsche Telekom would be exempt from price regulation in the first years in return for making a €3bn investment in the high-speed optical-fibre network.
Telekom’s rivals have criticised the deal, accusing the government of allowing Telekom “to at least temporarily build a new monopoly” which in the end would lead to higher prices for customers, writes FT Deutschland.
The newspaper adds that five million German households currently have a broadband connection by rival firms.
These users could now be excluded from the advantages VDSL could offer.
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