German Regulator Releases Terms for Access to Deutsche Telekom's Passive Broadband Infrastructure

Germany's telecoms regulator, BNA, says that it has established the conditions on which the country's alternative operators can access the civil infrastructure containing incumbent Deutsche Telekom's broadband network. The regulation, most significantly, outlines the technical specifications for installing DSLAM (digital subscriber line access multiplexer) equipment in the cabinets and fibre-optic cables into cable ducts, as well as for using Deutsche Telekom's unlit fibre when the lack of space prohibits sharing the passive infrastructure.

Outlook and Implications

• Regulator Intervenes After Commercial Talks Failed: The BNA's decision is a response to a regulatory request submitted by Vodafone Germany in August, following the failure of the company and other alternates' efforts to set up the conditions with the incumbent through commercial negotiations. After the talks unfolded, Deutsche Telekom itself sought regulatory approval for its own infrastructure-sharing proposal, yet the BNA subsequently rejected this as too generic (see Germany: 19 October 2009: Regulator Rejects Deutsche Telekom's VDSL Access Proposal). Initial comments from two separate industry groups representing alternative telcos—Bitkom and VATM—have generally lauded the decision, as an indication that the new framework should be adequately specific and thus rather straightforward to comply with in the technical level. By accessing and sharing Deutsche Telekom's passive infrastructure the other telcos can achieve substantial savings in deployment costs, as excavation and other civil infrastructure works—in the German government's estimates—can account for up to 70% of total roll-out expenditure. The BNA will impose the relevant tariffs and other financial terms in a separate ruling.
• Laying Basis for Alternative VDSL Roll-Outs: Thus far the leading alternates have already provided VDSL broadband access as resellers, based on the earlier wholesale agreement with the incumbent, and as soon as the BNA releases its pricing guidance they can also start deploying their own VDSL networks in a full scale. The German fibre deployment model is namely focused on VDSL, which essentially is a fibre-to-the-cabinet (FTTC) solution, and the current fibre-to-the-home roll-outs have been taken by a number of regional carriers, which early this year organised themselves under a new industry association, Buglas (see Germany: 30 November 2009: NetCologne Plans to Launch 1-Gbps FTTH Service in 2010 and Germany: 5 November 2009: HL Komm Launches FTTH Network in German City of Leipzig). The main case for VDSL over FTTH has been the architecture of the incumbent's existing fixed network, which has the street cabinets located in a relatively long distance from households, in comparison for instance the neighbouring France, where France Telekom has opted for FTTH. In the meantime, the VDSL roll-outs will add further pressure on the country's cable players to proceed with their own network upgrades (see Germany: 13 November 2009: Liberty Global to Acquire Unitymedia for US$5.2 bil. in Germany).