Price model for VDSL bitstream access
Bundesnetzagentur provisionally prohibits price model for VDSL bitstream access
Year of issue 2012
Date of issue 2012.04.02
With a decision published today, the Bundesnetzagentur has prohibited Telekom Deutschland GmbH from selling VDSL bitstream access under a new price model for the time being. The company had informed the Bundesnetzagentur back in mid-January 2012 of its plans to introduce a price model known as the VDSL contingent model in addition to its current price model for VDSL IP bitstream access. In ex post control proceedings, the competent Ruling Chamber arrived at the preliminary conclusion that the model was considerably hampering the competitive opportunities of other companies without any objective justification.
The VDSL contingent model is characterized by parties wishing to have VDSL IP bitstream access book a certain contingent of bitstream access nationwide or at regional level by making a so-called upfront payment. With this booking, subscribers obtain the right to lease VDSL IP bitstream access for the next eleven years within the framework of the agreed contingent subject to a certain monthly fee. Owing to the overall mechanism which means the upfront payment is distributed across the access lines actually leased in terms of cost accounting, the more use is made of the agreed contingent, the lower the price becomes.
The mechanism effectively offers a volume-based discount for use of an existing infrastructure that in conjunction with the term of the lease renders it unattractive for competitors to develop new infrastructures such as the optical fibre loop on the last mile. Infrastructure competition is, however, an important prerequisite for the development of sustainable and self-supporting competition on end consumer markets in terms of pricing, quality, service and diversity of services available.
The Bundesnetzagentur holds the view that the new price model cannot be justified by special investment-related risks or capacity utilisation risks. This is not a model that is used to sell broadband access on the basis of newly-developed, more high-speed broadband networks but to sell connections in an existing infrastructure in which investments began in 2006 and have meanwhile been almost completed.
That is why the Bundesnetzagentur explicitly stressed once again in its decision that it is open to cooperation and risk-sharing models for the development and sale of new next generation broadband networks, for instance, optical fibre on the last mile. Today's decision will therefore not prejudice its regulatory assessment. In a statement issued, the Bundeskartellamt said that it shares the Bundesnetzagentur's competitive assessment of the VDSL contingent model.
Today's decision will in all likelihood be published in the Official Gazette of the Bundesnetzagentur on 18 April 2012 for the purposes of national consultation. Interested parties will have the opportunity to comment until 2 May 2012. The decision will subsequently be communicated to the EU Commission and the national regulatory authorities of the other EU Member States which will have one month to submit their comments. It will then be possible to announce the final decision.