German alternative operators blast regulator's ruling
By Ouida Taaffe, Total Telecom
30 March 2001
German alternative operators voiced strong disapproval over changes in local loop access prices announced by the regulator Friday.
There were four main regulatory changes overall. These were: the monthly rental for local loop access has been reduced by DM1 to DM24.50; A line-sharing requirement has been imposed; resale in the local loop must now be made possible; the retail price for T-DSL must be at market rates.
Following the news of the new local loop prices, Joachim Dreyer, the president of the umbrella body that represents the alternative operators, VATM, stated: "The private customer will have to pick up the tab [for this], as, at these prices there will continue to be little competition in the local loop."
VATM had hoped to see monthly line rental charges fall to between DM15 and DM18 a month. It points out that DT's customers actually pay less than its competitors, at DM21.38.
One of the more biting comments from DTs competitors was made by Harald Stoeber, the CEO of Mannesmann Arcor. He saw "a political shadow" over the decision of the regulator. (DT is still majority-owned by the German government). Arcor agreed with VATM on what a fair monthly line-rental price would be and pointed out that city carrier NetCologne charges DM15 a month for local loop lines (within the city of Cologne). Arcor was "really disappointed" by the decision on the one-time connection costs, which it had wanted to see fall from the present DM191.09 to DM40.
The responses from DT's competitors, however, were not all brickbats for the regulator. QSC, the SDSL broadband provider, stated that the regulation on the introduction of line sharing would further competition.
In coming to its decision, the regulator's office consulted "over 30 telecommunications companies." It also drew on the expertise of the Wissenschaftliche Institut fuer Kommunikationsdienste (the Scientific Institute for Communications Services), in Bad Honnef, to develop an analytical cost model.
In his statement on the changes, Matthias Kurth, the president of the German regulatory office, stressed that it was important "given the nervousness of the capital markets, to maintain the clear course set for a predictable competitive environment in the German telecommunications market."
This would suggest that the new prices are not likely to change, whatever the displeasure of the alternative providers. None of these have announced any plans to challenge today's decisions in court. Arcor explicitly stated that it would not take this step.
The prices for access in the German local loop are now as follows:
For the most common form of access, via unbundled copper, the monthly rate is DM24.40. This price will have to be paid by DT's competitors starting from 1 April 2001. This is a reduction of DM1 on the price that was set in February 1999. Prior to this, DT had been charging DM34.03 per month. The new price is valid for the next two years.
These monthly charges do not include the cost of connecting, nor of disconnecting, a customer. In the case of a line connection that does not require further switching the price has been set at DM181.09. The previous price was DM191.64. DT had demanded a price of DM248.47 for this.
The disconnection costs, should a customer change to another provider, or return to DT, are to be DM74.75, rather than DM107.70. DT had requested that this charge be set at DM204.21. Both the connection and disconnection charges are valid for, at most, one year.
The connection and disconnection costs are set for a shorter period of time than the line rental price because the regulator expects the alternative operators to continue to work together in developing new solutions, such as electronic interfaces between DT and the competitors.
On the topic of line sharing, the regulator stated that the ruling of the European parliament on unbundled access to the local loop is now law. This means that DT must offer line sharing to its competitors.
The ruling stipulates that joint access must be made available within two months without favor. Prior to the first use of line-share, a run-up phase of three months is acceptable.
The competitor will have access to its own frequency band on the local loop. DT objected to the ruling on the basis that the splitting of frequencies and digital subscriber line access multiplexing are tackled by it as unit. The regulator does not see this as a stumbling block to the introduction of line sharing. Nor did it accept that the lack of norms on the process was a reason for delaying implementation.
The regulator expects the commercial use of line sharing in Germany to be in place in September 2001.
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