BNetzA aims to give regulatory certainty to the whole industry, as part of a broader effort to facilitate investment in fibre
Pricing stability should please stakeholders: For the first time, the German regulator BNetzA is looking to set the price for unbundling Deutsche Telekom’s network for a significantly longer period of time than the usual three years. On Wednesday, BNetzA submitted a proposal for consultation with stakeholders whereby prices would be approved for 10 years, and remain almost entirely stable during that timeframe. LLU charges, which had increased in BNetzA’s previous decision, are set to fall from the current €11.19 to €10.65. Access prices at the cable splitter, which BNetzA expects to be in greater demand in the future, are set to fall from the current €7.05 to €6.92. Only after five years would a 4% increase take place. The regulator is taking this new approach with the migration from copper to fibre in mind, and based on the demands coming from different sides of the industry which are united in their calls for regulatory certainty. Since LLU is an anchor product in the transition to fibre, stable prices facilitate both incumbents and access seekers in planning for the transition, reducing the risk of increases in cost. BNetzA’s consultation is open until 13 May, with a view to reaching a decision in June and make it enter into force in July.
Germany is upping its fibre game: Copper retirement in Germany is still some way away. Unlike other large European countries, no deadline has yet been set for it to happen. FTTH coverage significantly lags behind, and only stood at 15% of households as of Q2 2021. This was in part due to a regulatory environment that gave little incentive to DT to invest in fibre, instead allowing it to make the most of its existing copper network through vectoring technologies. As a result, Germany is far from meeting the targets of its 2016 Digital Strategy, which aimed for full coverage of gigabit-capable broadband by 2025. The Government is now working on a new, more realistic target for 2030. BNetzA has also changed its tune, and is about to finalise a new regulatory framework for wholesale local access to stimulate DT’s investment in fibre. DT would only face a non-discrimination obligation on its VULA products, without any ex-ante price control (BNetzA would only intervene where it has evidence of market distortion). On the other hand, the regulator wants to expand the scope of passive infrastructure access (PIA) to facilitate deployments of other operators. Up until now, PIA could only be used as an ancillary service to wholesale products of DT. Such a departure from the previous regulatory approach is likely to yield significantly better results, as shown in countries such as Portugal and Spain where favourable conditions for duct access have played a key role in spurring fibre deployment.
