Reuters reports that the European Commission(EC) has opened an in-depth investigation into Germany’s approval of Deutsche Telekom’s (DT) plan to use its existing copper wiring to connect homes and offices up to its high-speed fiber optic broadband network because it could harm competition. The telecommunication regulator BNetzA had approved in November 2015 a proposal from Deutsche Telekom to use vectoring technology.
Deutsche Telecom plans to double the bandwidth of the existing copper lines running from a fiber-connected central distribution point using vectoring technology that will give download speeds of up to 100 Mbps. Vector technology will reduce cost as Deutsche Telecom do not need to install fiber cables in the last-mile. When the fiber run from the central office to the home, the broadband technology is called Fiber-to-the-home. Vectoring technology is limited in speed and bandwidth depending on the length of the copper cable.
The operator’s plan caused an outcry from its competitors, such as Vodafone, who argued that the plan would harm competition. Vectoring technology only works when applied to a whole bundle of copper cables, meaning individual lines cannot be physically unbundled to give access to alternative operators.
Deutsche Telecom’s competitors would get “virtual” access to the copper ‘local loop’ network, but the European Commission said this arrangement would deny the degree of control necessary to differentiate their retail offers from those of Deutsche Telekom. The Commission also said that the plan appeared to have a “considerably restricting effect on alternative operators who buy access from Deutsche Telekom” and would discuss it with the German regulator over the next three months.
The Commission has given a timeframe and if no solution is found at the end of that period the Commission could ask BNetzA to withdraw or amend its decision. European Commission intends to allow both a network upgrade and high-quality access for competitors.
Vectoring technology is an intermediate solution and the Commission has concerns that Deutsche Telekom’s plan could have an impact on incentives for fiber investment over the longer term. However, Deutsche Telekom said that it expected the German regulator’s decision would eventually be upheld in Brussels.
Deutsche Telecom says that without vectoring technology many German rural areas will remain in the monopoly of cable providers and will be excluded from competitive offers. The case is similar in UK where the BT believes the new copper-based G.fast technology is a far cheaper way to get more people hooked up sooner to high-speed broadband than aiming to run new fiber into every building.
The European Competitive Telecommunication Association (ECTA), which represents challenger operators such as Vodafone and TalkTalk, said it welcomed the Commission’s investigation. ECTA officials said it has very serious concerns regarding the consequences of this measure which, if implemented, would jeopardize sustainable competition by wiping out challenger operators from the market and obstructing the path of their fiber investments.