What are some existing technology monopolies

VDSL Turbo Vectoring: Monopoly Commission warns of "Telecom technology monopoly"

In a special report on telecommunications regulation, the Monopoly Commission criticizes the draft submitted by the Federal Network Agency for DSL vectoring in the vicinity of the main distribution board. For Telekom's competitors, the draft sets “high hurdles”, say the competition experts. The Monopolies Commission is an independent advisory body that advises the Federal Government as well as the Bundestag and Bundesrat on competition policy.

"Telecom's technology monopoly"

"It is to be feared that the Federal Network Agency - unlike the first vectoring decision in 2013 - will not succeed in preventing Deutsche Telekom's technology monopoly on the so-called last mile near the main distribution board," said the chairman of the monopoly commission, Daniel Zimmer , on Monday in Bonn.

In principle, the Monopolies Commission considers vectoring to be “a transition technology” with which the expansion of the broadband infrastructure can be temporarily accelerated. Disadvantages are the "limitation of the achievable bandwidths and the emergence of local monopolies, since the technology requires exclusive use."

No competition

The Monopolies Commission criticizes the fact that the decision as to which company is allowed to exclusively develop which local areas and expand with vectoring should “not fall in competition”. The decisive factor is the status of the expansion that was already completed on November 23rd. "With such a backward-looking decision criterion, the existing market structures are largely cemented," complain the competition experts.

The Monopoly Commission also does not like the idea of ​​the Federal Network Agency to promote broadband expansion on the basis of a public law contract with Telekom. Such contracts are “not regulated in the Telecommunications Act and would rather cause legal uncertainty than create legal certainty”.

Different requirements

In addition, it is problematic that Telekom is apparently not subject to the same liability requirements as the alternative network operators in the self-commitment. They would have to submit notarized declarations of commitment by a deadline, while at Deutsche Telekom a declaration of intent would be sufficient.

The Monopolies Commission likes the Federal Network Agency's proposal to introduce a virtually unbundled wholesale product (VULA) for access to subscriber lines in the exclusive vectoring expansion. The decision of the regulatory authority on bitstream access is also approved by the Commission. The experts point out, however, that Telekom does not actually offer bitstream layer 2 or VULA. The Federal Network Agency should be prepared if the timely provision does not work.

Privatize telecom

The Monopoly Commission renews its demand that the federal government should separate from its telecom shares. Overall, the state still has a stake of over 30 percent in Telekom. The Commission sees a “massive conflict of interest” resulting from the dual role of shareholder with financial interests on the one hand and holder of regulatory power on the other. A sale of the shares is therefore “not only urgently required from a regulatory point of view, but would also generate considerable funds” that could be used for broadband expansion.

The Commission is also keeping an eye on the mobile communications sector. Here the consolidation process in the industry continues, according to the report. The Monopolies Commission expects that large-scale mergers such as the last one between the network operators Telefónica and E-Plus will dampen rather than strengthen competition between the remaining providers. The conditions for the merger are hardly suitable to allay competition concerns. The high results of the most recent frequency auction could, however, “speak for a functioning competition”. At the moment, however, it is still too early to make any final statements about the actual effects on competition. (vbr)