German Regulator to Discontinue Regulation of Selected Markets
Germany's Federal Network Agency has announced that it plans to discontinue regulation of further telecommunications markets. This was announced in a market definition and analysis published today for comment by the market.
"We are considering withdrawing regulation from further markets", said Matthias Kurth, the president of the Agency. "After having declared regulation to be no longer necessary in the markets for calls to fixed and mobile networks abroad in 2006 and 2007, respectively, we now want to withdraw from regulation of the markets for national calls from fixed lines to fixed and possibly also mobile networks", Kurth continued.
The market definition and analysis was prepared on the basis of the EU Commission’s Recommendation of 17 December 2007. The review has shown, on the one hand, that the results established in the previous market definition are still valid. The markets for calls to fixed-line networks and calls to mobile networks will continue to be considered as separate markets, mainly because of the inhomogeneous conditions of competition.
On the other hand, it has disclosed a tendency towards effective competition in both markets. The market for national calls to fixed-line networks, for example, is characterised by strong price competition which has generated favourable prices, both as regards flat rates and carrier (pre)selection.
"Although in the market for national calls to mobile networks reductions in wholesale mobile termination rates have not been sufficiently passed on to end users, the Agency assumes that the Federal Administrative Court’s decision of 2 April 2008 on the regulation of mobile termination rates created legal clarity and thus will start price competition in this market, too, in the near future", said Kurth. Withdrawal from regulation in this field will not be possible unless this requirement is fulfilled.
If the Agency’s assessment was confirmed in the further procedure and the Agency actually implemented its plan to withdraw from regulation in these areas, the markets would in future be supervised by the Federal Cartel Office.
The Agency is expected to continue regulating the market for telephone lines, however, as in this market effective competition has not yet been achieved, according to the current state of knowledge. The market for telephone lines, as well as all other telecommunications markets specified by the EU, will be examined at regular intervals to see whether effective competition has developed or regulatory intervention is required.
Posted to the site on 4th July 2008