The European Commission on Thursday said it would take the German government to court this summer after Berlin firmly rejected charges that its efforts to protect pioneer investments in ultra-fast internet lines breach EU law.
Berlin used a formal reply to a letter of protest from Brussels to propose “a meeting to air our differences soon”, but noted archly the Commission appeared to be complaining about the means rather than the goal selected by Berlin.
Having reviewed Berlin’s statement, a Commission spokesman said on Thursday there was “no willingness on the German side to respect EU law”. An EU official said the case could now come before the EU’s highest court in June.
Embarrassingly for Berlin, this means that Europe’s most senior judges will start to look at the charge that Germany is wilfully breaching EU law while Berlin holds the rotating EU presidency. A decision could take two or three years.
The German government changed its telecommunications act to allow the national regulator to exempt parts of new networks from regulation for a while to let the companies building them recoup their investment.
The Commission says the law hampers the regulator’s freedom to decide whether rivals should access these networks and suspects Berlin wants to shield partly-state owned Deutsche Telekom, which is putting €3bn into new lines.
Although the German government on Wednesday called upon the Commission to halt the threatened legal action, the ferocity of the public exchange between both sides would make a last-minute compromise a real surprise.
German trade and industry minister Michael Glos sent his government’s reply to Brussels’ “letter of formal notice” to EU telecoms commissioner Viviane Reding late Wednesday evening. A copy of the text was seen by the FT.
The issue has made tempers flare as it touches on the balance of power between Brussels and member states. Berlin wants a stronger national element in telecoms regulation. Brussels wants more centralisation.
The German government’s written reply to the Commission’s charges states that legal changes it recently enacted “are not designed to protect any single company” and that any claims to the contrary are “baseless”.
Rejecting the claim that EU law has been breached, the German government says in the document it is using national law to define “gaps” relating to new telecoms markets that the EU’s framework for telecoms regulation does not address.
The government has in the past argued that regulatory holidays were a vital way to encourage companies to build expensive infrastructure. It fears that too much regulation will leave Germany without new ultra-broadband lines.
Under the new rules, Deutsche Telekom will have to prove to its German regulator that the services it is offering on so-called VDSL lines are not available anywhere. The regulator could then allow the company sole use of its lines.
DT has pledged €3bn to put new lines in up to 50 German cities by the end of next year but it has not said what new services it will be offering. The regulator has warned bundling existing products will not count.
