Germany: The New Telecommunications Act - Part 5 - Access To Services, To The Network And

Last Updated: 21 January 1997
Of vital importance for the realization of a competitive telecommunications market is access to telecommunications services and the telecommunication network, as well as interconnection between the various networks.

Although the German telecommunications market has become liberalised, the former state monopolist, Deutsche Telekom AG, will continue to play a leading and dominant role in this market. It was, thus, necessary for the legislator to regulate in the Act access by competitors to Deutsche Telekom AG's services and network, as well as interconnection between Deutsche Telekom AG's network and the new telecommunication networks which have or will come into existence.

Access to services

Section 33 TKG thus imposes an obligation on any operator of a network with a dominant market position to grant competitors access to essential services, which the former either uses internally or offers on the marketplace. Access must be granted under the same technical and commercial conditions which such dominant operator imposes upon itself for the provision of its own telecommunication services, unless the imposition of more restrictive conditions is justified on legitimate grounds. Thus, as an example, a telecommunications undertaking which provides a licensable telecommunications service, i.e. the operation of a network, as well as nonlicensable telecommunications services (e.g. data services), must allow a competitor, who also wishes to provide data services, to use its network under the same conditions which it imposes for its own data services or the data services of other competitors to whom it has already allowed access. The rule is, therefore: Treatment internally equals treatment externally. If it were not for this rule, real competition between nonlicensable telecommunications services could not be realized.

Imposing more restrictive conditions will be justified in particular, if one of the grounds laid down in Council Directive of 28 June 1990 on the establishment of the internal market for telecommunications services through the implementation of open network provision (90/387/EC) (Open Network Provision Directive ONP) applies, namely security of network operations, maintenance of network integritiy, interoperability of services and the protection of data.

The regulatory body may impose an obligation to take action, prohibit conduct or even declare contracts as wholly or partially void, if a telecommunications undertaking does not comply with its obligations pursuant to Section 33 TKG, and is thus abusing its dominant market position. Such an abuse will prima facie be assumed if a dominant telecommunications undertaking imposes less favourable conditions on its competitors for accessing its internal and external services than upon itself. In such a case, the dominant undertaking must prove that the imposition of more restrictive conditions is justified for the reasons mentioned in the preceding paragraph.

According to Section 34 TKG, the regulatory body can exercise the same powers as granted to it pursuant to Section 33, if its discovers that a telecommunications undertaking with a dominant market position is not complying with any one of the standards laid down by the European Commission or the European Council pursuant to the ONP Directive, to the extent that such standards have been declared binding. Conversely, however, if an undertaking can show that it is complying with the ONP standards, it must be assumed that it is also complying with the basic conditions for open network access.

Access to the network and interconnection

Which telecommunications undertakings will be obliged to grant other users access to their telecommunications network and interconnection are two related prerequisites necessary for a liberalised telecommunications market to function. The first issue, in particular, was subject to heated political discussions throughout the Act passing through Parliament. It was finally resolved that every network operator who provides telecommunications services to the public and who has a dominant market position on the market concerned should be under a duty to allow other users access to its telecommunications network or parts thereof. Access can be granted through connections generally open to all users (general network access) or through special connections setup for particular users (special network access).

Agreements governing access to a network must be objective, transparent and afford a dominant operator pursuant to Section 35 TKG with reciprocal access to the other operators' networks. Access may only be restricted on the grounds laid down in the Open Network Provision Directive. Agreements governing access to the network of a dominant operator must be submitted to the regulatory body in writing who will also publish these.

Of significant importance are special access connections. The most important example of such a special connection is the interconnection of networks. The Act obliges a network operator with a dominant market position to ensure that its network interconnects with the public networks of other network operators. It is, therefore, clear that the legislator was of the view that the dominant competitor, Deutsche Telekom AG, would not require access to other operators' networks in the same way as competitors who are about to enter this new market. However, this does not mean that such competitors are free from any obligation in this regard. For pursuant to Section 36 TKG, all operators of a public telecommunications network are under a duty to offer to tender, upon request, interconnection facilities to other network operators. The Telecommunicatons Act provides for special rules in relating to these connections. The regulatory body must examine whether a person wishing to have special access has the requisite reliability, ability to perform and specialist knowledge. This is the same test which has to be applied in the case of a telecommunications provider who wishes to provide services requiring a license pursuant to Section 8 TKG. Thus such an examination will not be necessary if the applicant in question already has a license. Secondly, it has to be ensured that an applicant wishing to have a special access connection is not compelled to accept services that it does not require. The Federal Government is empowered to provide for more detailed rules in a statutory instrument.

Such a statutory instrument the Network Access Regulation (NZV) has recently come into force. It lays down the terms that a special network access agreement needs to satisfy, in particular, in relation to interconnection agreements. These include:

  • description of the individual services, how and when they are to be provided,
  • access to additional services,
  • ensurance of reciprocal access,
  • location of the points of access,
  • mutual use of installations and locations,
  • the technical conditions that must exist for special access to the network,
  • interoperability,
  • traffic/network management,
  • maintenance and quality control (including fault clearance),
  • fees,
  • payment modalities,
  • liability and compensation,
  • copyright,
  • measures to be undertaken to satisfy basic requirements,
  • training of staff,
  • term and extensions of the agreement,
  • procedure to be observed where a party requires an amendment,
  • procedure to be initiated by a party if a decision of the regulatory body is required,
  • secrecy of confidential parts of the agreement.
The obligations imposed by this new statutory regulation, in particular, on dominant market undertakings is of particular importance to telecommunications providers who provide online and data telecommunications services. For fair access is indispensable for creating free competition. The same applies in relation to interconnection between the various networks because without such interconnection, a liberalised telecommunications market consisting of several networks cannot function.

If the operator of a telecommunication network does not comply with its obligations pursuant to Section 35 or 36 TKG, i.e. the provision of interconnection or a tender for interconnection, the regulatory body can compel the interconnection. If operators, who do not have a dominant market position, are not able to agree on an interconnection agreement, any party is entitled to enlist the assistance of the regulatory body. After hearing both parties, the regulatory body can order interconnection after a period of six weeks, network operators having a period of three months in which to interconnect. Exemptions are allowed only for objective technical reasons.

Finally, the fees charged by a dominant operator for access and interconnection of its network will be subject to the prior approval of the regulatory body (Section 39 TKG). Moreover agreements governing access to the network of a dominant operator are void in so far, as they obstruct the competitive situation of other undertakings in the telecommunications market without legitimate cause. In such a case, the regulatory body may exercise the same powers against such operator as laid down in Section 33 TKG.

For further information please contact Dr. Markus Deutsch, Gleiss Lutz Hootz Hirsch & Partner , G„rtnerweg 2, 60322 Frankfurt, Germany, Fax: +49 69 955 14 198.

This article is correct to the best of our knowledge as at the time of its publication. However, it is written as a general guide and, therefore, specialist advice should be sought as regards your specific circumstances.

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