Telecom regulation Europe's Digital Reboot

German telecoms are pressuring Brussels to include regulatory reform in the E.U.'s push to digitize the economy. But competition watchdogs are concerned that giants like Deutsche Telekom could gain an unfair advantage.
In Brussels, politicians can decide who has access to these cables.

The European Union is to overhaul telecoms regulations to make sure Europe's communication networks remain competitive.

E.U. Commissioner Günther Oettinger met with several telecoms companies, including a group of German telecoms operators, known as the Network Alliance, this week, to discuss change.

At a press conference in Brussels on Monday, Mr. Oettinger said new draft proposals would be ready by the summer.

"Now the telecommunications sector has spread into a lot of other fields, data services and digital services, modernization or a general overhaul of the telecommunications legal framework is something which is on the cards this year," he said.

Industry leaders such as Deutsche Telekom want Brussels to scrap a mandate requiring them to open their networks to competitors.

Though Mr. Oettinger is viewed as sympathetic to the telecoms, this move would likely run afoul of E.U. Competition Commissioner Margrethe Vestager, who is reluctant to hand power back to large telecoms firms. Her argument is that allowing large operators to retain use of their networks would put the whole telecoms market at the mercy of the large operators, stifling competition and ultimately resulting in higher prices overall for the consumer.

In Brussels, the European Commission has set up an investment program as well. Companies can submit applications to receive cheap loans for special projects that further the the digitization of the economy.

While E.U. regulators and the telecoms sort out their differences, technological developments are pressuring both sides to agree on a regulatory framework sooner rather than later. There's a global push to implement 5G as the new telecom standard, which would enable autonomous cars and machine-to-machine communication on a large scale for the first time.

After meeting with Mr. Oettinger on Monday, the Network Alliance's head, Alexander Dobrindt, announced €8 billion ($8.7 billion) in private sector investment to expand Germany's broadband capacity. The investment program, which began last year, will continue through 2018.

Deutsche Telekom is already moving to upgrade its copper cables and offer faster Internet in special regions, though many believe the future lies with fiber optics.

Mr. Dobrindt, who is also Germany's minister of transportation and digital infrastructure, said that the federal and state governments would contribute an additional €2 billion to broadband expansion over the next three years.

In Brussels, the European Commission has set up an investment program as well. Companies can submit applications to receive cheap loans for special projects that further the digitization of the economy.

As more and more public and private money goes toward broadband expansion, the Network Alliance wants Berlin to implement an E.U. rule that calls for the creation of databases listing construction sites so any relevant cables can be laid down at the same time. The goal is to help companies avoid doing the same work twice.

But Thomas Jarzombek, an expert on digital policy with the center-right Christian Democrats, warned that setting up the databases could create another cumbersome bureaucracy that slows progress.

"We cannot forget about broadband expansion," Mr. Jarzombek told Handesblatt.


Ruth Berschens heads Handelsblatt's Brussels office, leading coverage of European policy. Daniel Delhaes reports on politics, transport and airlines from Handelsblatt's Berlin office. Ina Karabasz is an editor at Handelsblatt's companies and markets team, covering telecommunications, IT and security issues. To contact: [email protected], [email protected] and [email protected]