Telecommunications Regulation GERMANY Nörr Stiefenhofer Lutz - Partnerschaft CONTACT INFORMATION Dr. Tobias Frevert Nörr Stiefenhofer Lutz - Partnerschaft Charlottenstraße 57 D-10117 Berlin +49 (0)30 2094 2030 tobias.frevert@noerr.com 1. What is the name and nature of the regulatory body(ies) in your jurisdiction? To which bodies (if any) are decisions appealed? Regulatory body in Germany is the Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway (Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen; BNetzA) headquartered in Bonn. In general, the administrative court of Cologne is the competent body for appeals. 2. Has your jurisdiction adopted the WTO Basic Telecommunications Agreement? If yes, with what exceptions, if any? The WTO Basic Telecommunications Agreement has been fully implemented by the Federal Republic of Germany. 3. Are operators in your jurisdiction privately or publicly/state owned? Operators are privately owned. However, the Federal Republic of Germany currently owns a stake of 14.8% and, via the state controlled KfW Bankengruppe, another stake of 16.9% in Deutsche Telekom AG, the incumbent in the telecommunications sector.
4. What are the primary differences between the regulation of wire line, wireless, satellite, cable and VoIP providers? The legislative approach of the Telecommunications Act is to establish a regulatory system neutral with respect to different transmission technologies. Thus, the same rules and regulations generally apply to all providers of telecommunications services including wireless, satellite, cable and VoIP providers (e.g. regarding the provision of emergency calls, telecommunications surveillance, and interconnection obligations). However, certain technology specific regulations apply to wireless transmission technologies and the operation of satellites which require exclusive allocation of frequencies (see answers to questions 12 and 13). 5. Are broadcasters regulated separately from telecoms? The Telecommunications Act does not apply to broadcasters with respect to delivering content via telecommunications networks. Instead, broadcasters are subject to federal and state regulations such as the Telemedia Act 2007, the State Treaties on Broadcasting and Youth Protection in Media, and the various media laws of the 16 federal states. However, special telecommunications regulations also apply where broadcasters make use of conditional access systems. 6. How are satellite earth stations and submarine cable landings regulated? Operating a satellite earth station requires allocation of the respective frequencies and assignment to the operator of the orbit and frequency usage granted to the Federal Republic of Germany by the International Telecommunication Union (ITU). Competent authority is the Federal Network Agency. No specific telecommunications regulations apply to submarine cable landings. However, general provisions regarding use of the continental shelf apply and may require authorization by the competent authorities. 7. How is the radio spectrum generally regulated? The Federal Network Agency assigns frequencies of the radio spectrum for individual and for general use. The assignment follows the Frequency Range Allocation Plan Ordinance (Frequenzbereichszuweisungsplanverordnung) and the Frequency Utilisation Plan (Frequenznutzungsplan). Where there is a shortage of available frequencies, the Federal Network Agency will carry out an awarding procedure usually by way of auction. If an auction does not meet the regu-latory aims of the Telecommunications Act, the Federal Network Agency will ask for tenders. 8. Are any operators granted exclusivity? No operator is granted exclusivity for a specific telecommunications service. However, the use of radio frequencies is individually assigned.
9. Are anti-competitive practices subject to regulation or general competition (e.g., antitrust) laws? The Federal Network Agency exercises sector specific control over anti-competitive behaviour of undertakings active in the telecom sector. This includes controlling abusive conduct of network operators and telecommunications service providers having significant market power, inter alia imposing third-party access obligations with respect to networks and essential facilities. Furthermore, (wholesale) rates for access to services and facilities and rates for retail services are subject to review. In addition, undertakings are subject to the Act against Restraints of Competition which is enforced by the Federal Cartel Office and, where competition only within one federal state is affected, the cartel authority of that respective state. General antitrust law is applicable where the Telecommunications Act does not establish sector specific regulation. Also, merger control exclusively exercised by the Federal Cartel Office fully applies to undertakings active in telecommunications. 10. What services have been liberalized or designated as competitive services? With the Telecommunications Act becoming effective in 1996, the telecommunications markets in general were liberalized, including the provision of internet accesses, value added services, satellite and wireless communications services. 11. Are there regulated tariffs or price lists? If so, for what types of services? Wholesale tariffs of network operators having significant market power for granting access to networks, network elements and facilities are subject to ex ante approval if such access was imposed by the Federal Network Agency. Where access obligations are imposed upon a network operator who does not have significant market power or where access is granted voluntarily, rates are generally controlled ex post. For the purpose of achieving the objectives of the Telecommunications Act (inter alia to establish effective competition in the telecommunications sector, to encourage efficient infrastructure investments, to safeguard consumer inter-ests), the Federal Network Agency may subject the rates of undertakings with significant market power for retail telecommunications services to ex ante approval. 12. Are there restrictions on foreign investment in any types of communications companies? If so, what are the restrictions? There are no specific restrictions regarding foreign investments in undertakings active in telecommunications.
13. What are the approval processes for mergers and acquisitions? Do these vary by type of operator? German merger control applies if (1) the undertakings involved have a combined aggregate world-wide turnover of more than EUR 500 million and (2) at least one undertaking involved has a turnover of more than EUR 25 million in Germany and (3) another undertaking involved has a turnover of more than EUR 5 million in Germany, each within the last financial year completed prior to the merger. Even where these thresholds are met, a merger shall be exempt from German merger control as far as (1) an undertaking legally independent from other undertakings and having a world-wide aggregate turnover of no more than EUR 10 million merges with another undertaking, or (2) a market is concerned where goods or services have been offered for at least five years and where, in the last calendar year, a turnover of no more than EUR 15 million was realised. If the thresholds are met (and European merger control is not applicable), a merger is subject to notification with the Federal Cartel Office and must not be implemented prior to clearance. Following receipt of a complete notification, the Federal Cartel Office investigates within an initial period of one month (first phase) whether the concentration creates or strengthens a market dominant position. The Federal Cartel Office will launch main proceeding (second phase) if a further examination of the concentration is necessary. The second phase may take up to four months from receipt of a complete notification. Decisions in merger control proceedings may be appealed before the higher regional court of Düsseldorf. The German merger control regime generally does not discriminate between different types of telecommunications operators. However, for mergers in the media sector significantly lower thresholds apply. 14. Is interconnection between carriers mandatory? The Telecommunications Act imposes upon all public network operators the obligation to offer upon request interconnection to other operators of public telecommunications networks. If negotiations fail, the Federal Network Agency, ex officio or upon application by the network operator seeking inter-connection, may impose upon network operators having significant market power the obligation to enable interconnection. 15. Are interconnection fees/rates regulated? The Federal Network Agency ex ante reviews the interconnection rates applied by network operators having significant market power based on the costs of efficient service provision.
16. Must carriers make available network components to competitors? If so, what are fees/prices based on cost, or market rates? The Federal Network Agency may impose upon a network operator having significant market power the obligation to grant access to networks, network components and facilities including fully unbundled access to the local loop, technical interfaces, protocols and other key technologies and to provide collocation and other forms of facility sharing like building, duct and mast sharing. Rates for the unbundled access to the local loop are subject to ex ante control following a cost assessment based on the costs of efficient service provision. The costs of efficient service provision are derived from the long run incremental costs of providing the service and an appropriate mark-up for volume-neutral common costs, including a reasonable return on capital employed, as far as these costs are required to provide the service. 17. Is there an obligation to serve all customers? If yes, is there a fund to subsidize eligible carriers? Which carriers contribute to the fund? Which carriers are eligible to receive these funds? Are broadband services subsidized or otherwise promoted through tax or other incentives? The Telecommunications Act establishes a minimum set of publicly available services of specified quality to which every end user, irrespective of his place of residence or work, shall have access at an affordable price (universal services). Currently, these services are provided by the Deutsche Telekom AG. If, at some point of time, the Federal Network Agency finds that universal services are not sufficiently available, it may impose upon an undertaking having a market share of at least 4% within the respective telecommunications service market or having significant market power within the respective geographic market the obligation to provide universal services. Costs incurred by providing universal services as imposed by the Federal Network Agency are funded by the universal service contribution provided by all undertakings that are eligible for providing universal services. So far, broadband internet access has not been defined as universal service. 18. Are there mandatory requirements to customer agreements (subscriptions, etc.)? The Telecommunications Act contains customer protection provisions applying to agreements between providers of public telecommunications services and end users. As a minimum, such agreements must contain information on the name and address of the provider, on the kind and main performance data of the service subscribed, on the expected time until installation, on maintenance and fault clearance services offered, on price details and access to public price information, on the contract period, on conditions for extension and termination of the subscription and parts thereof, on
regulation of reimbursement and refunding in case of failure to comply with the main performance data, and on details of the alternative dispute resolution offered by the Federal Network Agency. Upon request, the service provider also must offer itemized billing, entry and erasure of name and phone number in a publicly available free telephone directory and number portability. 19. Are there any general or telecommunication specific requirements as to data retention? Providers of public telecommunications services for end user shall store traffic data for a period of six months. If the provider does not produce or process traffic data himself, it shall ensure that traffic data is stored accordingly and inform the Federal Network Agency upon request about who is storing that data. Traffic data are the (international) telephone number of caller and callee, beginning and end time of the call, information on the kind of services used, and mobile cell identification or IP address where applicable. 20. Is number portability mandatory? If so, for which types of carriers (e.g., wireline, wireless, voice over internet protocol)? Number portability, upon request of the subscriber, is mandatory for all telecommunications service providers and network operators assigning telephone numbers to end users regardless of the kind of telecommunications service provided and the undertaking actually providing the respective telecommunication service. 21. Is equal access dialing selection mandatory? If yes, for which types of carriers? Upon imposition of the Federal Network Agency, undertakings having significant market power in the provision of connection to and use of the public telephone network at fixed locations must enable their subscribers to access the services of all directly interconnected providers of publicly available telecommunications services. Such carrier selection may be done on a call-by-call basis by dialling a carrier selection code for each call, or by means of preselection as long as the preselection can be overridden on a call-by-call basis by di-alling an alternative carrier selection code. Other kinds of telecommunications services can be subject to corresponding impositions only if otherwise the objectives of the Telecommunications Act cannot be achieved and, regarding wireless services, in absence of effective competition. Currently, this obligation only applies to fixed line local and long-distance calls offered by the Deutsche Telekom AG.
22. Is access or other contributions ( ADCs ) required of new entrants? There are no specific obligations or governmental fees imposed upon new entrants. However, fees are due, inter alia, for the allocation of frequencies, numbers and the transfer of rights of way. In addition, a general charge to be paid by all telecommunications service provides is planned to cover the costs of the Federal Network Agency. 23. Is VoIP regulated? If yes, to what extent? In general, VoIP is subject to the same regulatory framework which applies to all other telecommunications services due to the technology-neutral approach of the Telecommunications Act. Regulatory obligations include, inter alia, the provision of free emergency calls, availability of telecommunications surveillance, and retention of traffic data. However, pursuing a light touch ap-proach the Federal Network Agency has announced to execute its discretion, in the medium-term, giving sufficient way for the development of evolutionary services like VoIP. 24. Are any major changes to telecommunications laws expected in the near future? Following a revision of the Telecommunications Act in 2007, operators active on new markets, in particular the Deutsche Telekom AG with respect to its VDSL cable network, are generally exempt from market regulation under the Telecommunications Act. The respective provision is currently under jurisdictional review by the European Court of Justice. The European Commission and the Advocate General deem the general exemption to violate against higher ranked Community Law. This dispute will most likely result in an amendment of the Telecommunications Act erasing the regulatory holidays for new markets. 25. Is resale of telecom services permitted? If yes, is this activity regulated? What is the process to become a reseller? Are foreign companies permitted to be resellers? According to the Telecommunications Act, the Federal Network Agency may impose upon network operators having significant market power the obligation to grant a reseller access on a wholesale basis to services also offered by the network operator to end-users for the purpose of resale in the reseller s own name and for its own account. In doing so, the Federal Network Agency must take into account the network operator s past and future investments in innovative services. Furthermore, the licenses granted to operators of the GSM and UMTS mobile networks contain resale obligations. However, as no mobile network operator has market power the validity of these obligations is questionable. There are no specific regulations applying to foreign resellers. Any telecommunications service provider must inform the Federal Network Agency
without undue delay about the beginning, changes and ceasing of providing telecommunications services.