A new German Telecommunication Law (TKG) went into effect on July 1, 2004. This new law brings significant changes to the German electronic communication market that have an important impact on both users and providers.
The TKG aims to provide more competition and to ease market access for smaller companies through further deregulation of the formerly state-run and still market-dominant telephone utility, Deutsche Telekom AG (DTAG). The new law no longer requires telephone service competitors to have a special license to enter the market in favor of a simpler and more accessible notification requirement. Further, market leaders are obligated to sell network access and voice and internet services to competing resellers. Although the terms of the TKG generally favor smaller companies, network owners are still allowed to “bundle” their product sales to competitors and require purchase of additional services. For DTAG–the dominant infrastructure controller–this “bundling” privilege extends through at least 2008. After this period, the regulatory authority–‘Regulierungsbehoerde fuer Telekommunikation und Post’ (RegTP)–can require that the services be unbundled and available for individual purchase.
RegTP, founded after the privatization of the German telecommunication market in 1998, is charged with the responsibility of overseeing the general development of the market. This public telecommunications watchdog is both strengthened and made more transparent by the new law. RegTP’s corrective authority has been reinforced, including the ability to penalize improper conduct such as price-cost divergence, dumping or illegal product bundling. Moreover, RegTP is charged with preparing an annual report on the development of the telecommunications market.
Electronic communication providers are now permitted to use data collected from their customers for personal advertisement purposes conducted by mail or telephone and for market research so long as notice has been given and the customer has expressed no desire to the contrary. Furthermore, the so-called ‘Inverssuche’—the process of finding a person’s name through his/her telephone number—is now legal. Although these changes have gone into effect, users retain the right of non-disclosure of their personal information and may reject the providers’ advertisements.
The terms which DTAG is obligated to abide by while providing products and services for smaller resellers lack clear definition at the moment. For example, recently, Broadnet Mediascape requested that RegTP force the German market leader to provide some services according to the old conditions, after DTAG stopped delivering certain products. This conflict has yet to be resolved, and a large number of other small providers joined Broadnet in its request.
The new TKG has the potential to create great opportunity for telecommunications market change and development in Germany. It is an opportunity for some to enter a market previously protected by expensive and difficult to obtain licenses, but such endeavors must ensure that they comply with the protective clauses of the law and with the regulating provisions of the RegTP.
For more information on telecommunications law or legal developments in Germany, please contact TJ Fund at (801) 328-3600 or by e-mail at tfund@kmclaw.com. Kirton & McConkie acknowledges the assistance of native German Sven Poehle, one of the firm’s international project clerks, in preparing this article.