Optical fiber expansion dispute resolved by Netzagentur, signaling network growth.
In a recent development, the monitoring body responsible for recording double fiber optic expansion projects in Germany has been discontinued. This move indicates a shift in the regulatory environment, as the current rules do not explicitly prohibit "overbuilding" - the deployment of fiber infrastructure by multiple operators in the same areas.
The controversy surrounding overbuilding has been a hot topic, with Deutsche Telekom (DT) being at the centre of accusations by its competitors. These allegations claim that DT has engaged in "tactical overbuilding" by deploying fiber where others are already present or planning expansion, creating uncertainty that can hinder competitors’ investments.
However, a thorough investigation by the Federal Network Agency (Bundesnetzagentur) found the evidence inconclusive to prove that overbuilding intentionally harms competition. Out of 539 reported cases of potential overlapping expansion, no concrete conclusions were drawn from the reports of the actors involved. The agency noted that "empty expansion announcements" designed solely to block competitors are very rare.
Despite the findings, rival operators remain concerned that overbuilding by incumbents like DT could freeze smaller providers out of the market and slow fiber rollout pace. Breko and VATM, associations of Deutsche Telekom's competitors, have criticized the investigation by the Federal Network Agency as falling short of its capabilities. They argue that the scenario of a economically senseless, strategically destructive double expansion by Deutsche Telekom remains one of the biggest brakes on a swift, nationwide fiber optic expansion.
Wolfgang Kopf, head of politics and regulation at Deutsche Telekom, sees the final report of the Federal Network Agency as confirmation of its position. He advocates for faster approval procedures and fiber optic expansion into apartments. DT argues that even the mere announcement of overbuilding by them or their competitors can stop alternative providers' expansion initiatives.
Companies can still file complaints with Decision Chamber 3 of the Federal Network Agency after the monitoring body was discontinued. Critics argue that Deutsche Telekom is deliberately using its market position to undermine the business models of its competitors and secure market shares by overbuilding. However, the agency's findings suggest otherwise, allowing market forces to govern expansion disputes for now.
The regulatory and legislative environment remains dynamic, with ongoing reforms in the Telecommunications Act aiming to reduce bureaucratic hurdles for network construction more broadly. As the debate continues, one thing is clear - a swift, nationwide fiber optic expansion is crucial for Germany's digital future.
[1] Bundesnetzagentur. (2021). Stellungnahme zum Thema Doppelausbau - Ergebnisse der Beobachtung. Retrieved from https://www.bundesnetzagentur.de/EN/Topics/Telecommunications/Networks/FibreOptic/FibreOpticExpansion/Doppelausbau/Stellungnahme_Doppelausbau_Ergebnisse_der_Beobachtung_20210611.pdf
[2] Bundesnetzagentur. (2021). Stellungnahme zum Thema Doppelausbau - Ergebnisse der Beobachtung - Zusammenfassung. Retrieved from https://www.bundesnetzagentur.de/EN/Topics/Telecommunications/Networks/FibreOptic/FibreOpticExpansion/Doppelausbau/Stellungnahme_Doppelausbau_Ergebnisse_der_Beobachtung_20210611_Zusammenfassung.pdf
The controversy within the industry revolves around accusations of tactical overbuilding by Deutsche Telekom (DT), which involves deploying fiber where competitors already exist or are planning expansion. This practice, if proven, could potentially harm competition in the finance sector.
Despite the Federal Network Agency's findings suggesting inconclusive evidence of intentional harm to competition, rival operators continue to express concern about incumbents like DT freezing smaller providers out of the market and slowing down the pace of nationwide fiber optic expansion.
