EU Wants German Telekom Fiber Open to All

High Fibre writes "The European Commission has informed Germany that a new law protecting Deutsche Telekom's fiber optic network is illegal. Deutsche Telekom is in the process of rolling out a new fiber network that will serve the 50 largest German cities by the end of 2007 and convinced the German parliament to pass a law that would keep the competition from being able to lease its lines. The EC says that's a no-go: 'The EC believes that the German law would make it more difficult for competitors to enter the German market. More importantly, it runs contrary to an EC-endorsed recommendation that Deutsche Telekom be forced to open up its network — including the new fiber deployment — to competitors.'"

Comments

Re:Good!

[liliafan]

This sounds a lot like the situation with Bell in the US, they got broken up into a group of smaller companies.

I am not entirely sure how EU law works, but do they have any actually authority, or can they just make recommendations to the government of a nation. I wouldn't have thought they have the ability to take any actual action against Deutsche Telekom?

I never know how to feel about things like this

[realmolo]

On the one hand, if you paid to build the network, it *is* yours, and you should get exclusive access to it. Why should your competitors get a "free ride"?

On the other hand, you don't really want a bunch of fiber running everywhere, when there's PLENTY already in the ground. Building "duplicate" networks is a waste of resources, and the construction is disruptive.

Honestly, at this point, I think that "the government" should be building the networks with tax money, and letting the various providers lease it for a reasonable price. Bandwidth/communications has really become the backbone of the modern economy in a lot of ways. It should be treated almost like the highway system. The only downside is the bureaucracy that will rise up around it all. But I think that, overall, it would be a better situation.

Re:I never know how to feel about things like this

[pubjames]

On the one hand, if you paid to build the network, it *is* yours, and you should get exclusive access to it.

Although that sounds common sense, in actual fact the fibre network will travel almost entirely over public property (under pavements, roads etc), and so we the people (through our government) can put whatever conditions we want on it.

Re:I never know how to feel about things like this

[realmolo]

Yeah, that's a good point.

Again, though, it doesn't seem exactly fair that ONE company has to eat the cost of building the network, which is why I think the "feds" should do it.

Re:I never know how to feel about things like this

[ivan256]

The real solution here would probably be to force companies doing this kind of work to allow other companies to share their trenches. If you want to bury a bunch of fiber, you've got to let your competitors pay their share of the digging bill and drop their wire in the trench at the same time if they want to.

Re:I never know how to feel about things like this

[dave562]

Honestly, at this point, I think that "the government" should be building the networks with tax money, and letting the various providers lease it for a reasonable price. Bandwidth/communications has really become the backbone of the modern economy in a lot of ways. It should be treated almost like the highway system. The only downside is the bureaucracy that will rise up around it all. But I think that, overall, it would be a better situation.

I agree with you 100% on this one. I am generally not a fan of expanding the role of the government in anything. However I agree with your analogy that the network backbone is akin to the highway system. That actually sums it up very well.

Re:I never know how to feel about things like this

[Anonymous Coward]

And in this case, the German government made an agreement with the company to give them exclusive access to the network they built. And now that they've built a good portion of it, the EC comes in and says Germany didn't have the right to make that agreement. Would the company still have made that big of an investment if they knew they'd have to share the network with others? It's hard to say, but it seems a fair bit less likely.

Re:I never know how to feel about things like this

[UbuntuDupe]

That's fine, as long as the public's representative negotiates those conditions *before* the network is built, keeping in mind that unjustifiably burdensome conditions may mean it's never build.

However, why does the builder of the network have to be the same one sending data through it? Wouldn't it be better if one non-ISP company built it, and then leased to all users at prevailing prices? Then you don't have to worry about it being stacked in favor of one ISP's customers. (Disclaimer: I'm a newb on understanding telecom networks.)

Re:I never know how to feel about things like this

[theckhd]

By keeping industry involved though, the government lets the industry shoulder some of the cost, thus increasing the rate at which the network is deployed/improved. It also helps keep the amount of bureaucracy limited.

As long as there is still profit to be had, it will be worth it to the companies to invest in the infrastructure. Having a limited amount of regulation imposed by the government seems like the most cost-effective way (for the government, anyway) to encourage that. Too much regulation, and the industry sees no potential for profits, and the telco stops putting money into improving the network (leading to the scenario you described). Too little, and each telco ends up having to lay its own, wasting resources and money in the process.

Re:I never know how to feel about things like this

[KDR_11k]

To be fair, they aren't expected to share those for free. Still it's not nice to pull a 180 like that on someone.

Re:I never know how to feel about things like this

[realmolo]

I understand what you're saying, but it seems to me that the profit to be had comes from *what you send through the wires*. Building the network is just a necessary step. If the wires were available to anybody (for a reasonable cost), then we'd see MUCH more competition in network services. Right now, the costs of bandwidth make it prohibitive for anyone but the BIGGEST players to do the really cool things.

Re:I never know how to feel about things like this

[Sylver Dragon]

My normal knee-jerk reaction to the government doing this is, "hell no!" Usually the government screws up anything it gets a hold of; however, in this case, I think the analogy is spot on. Communications networks are becoming very much like the highway system in everyday necessity. I think I would be all for the government buying out the existing infrastructure (fiber and copper) at a reasonable price, and then using tax money to extend and expand it. Heck, we paid for the Spanish-American war as a surcharge until recently, why not use a similar surcharge to expand capacity. Also, One flat fee could be charged (per KB possibly) for all companies, regardless of what they are providing, thus giving a good boost to the good parts of net neutrality. Might even go so far as to make it work like the US Post Office, make it an independent entity who's sole purpose is providing bandwidth, and they must be self sufficient on the fees they generate.

Re:I never know how to feel about things like this

[jimstapleton]

Why should your competitors get a "free ride"?

I wouldn't necessarily call it a free ride. They would be leasing the lines, meaning they would be paying for the use.

I can see two issues to this:

(1) DT Owns the lines: I don't see why they'd be so upset, they can charge what they want can't they?
(2) The Government owns the lines, DT just built them for the government. Well, DT should have charged more shouldn't htey? Guess they bit themselves in the ass on that one (if it's the case).

Re:I never know how to feel about things like this

[shutdown -p now]

The company is allowed to charge other businesses for using the network, thus recouping the cost. They're, however, obligated to provide this service to anyone who asks and is willing to pay the set price.

Re:I never know how to feel about things like this

[xoyoyo]

Telekom *is* to all intents and purposes the German Government. Although the government has reduced its shareholding from 76% to 15.4% in the last decade it is still the largest (by far) single shareholder able to dictate policy throught the board (such as the sacking of the last two CEOs).

Also, the German government would have known all along that this deal was going to run into a lot of EU flak and presumably calculated that it could force it past the relevant regulatory bodies. Both German and France have enjoyed a certain amount of discretion over how much they fall into line with telecoms competiton policy. It may be that this deal was too much for even the relatively supine EU.

Re:I never know how to feel about things like this

[bestinshow]

Wouldn't it be better if one non-ISP company built it, and then leased to all users at prevailing prices?

Obviously.

However you're coming from a situation where there was a national telephone company, probably nationalised, that was privatised with monopoly restrictions, but is still massive. Look at BT in the UK as an example.

The solution has been to try and slice up the company in such a way that you don't create a bunch of smaller monopolies (like splitting Microsoft into Office, Windows, Internet would have done). This means that a company handles the core network, and sells access on a non-discriminatory basis to other companies, including itself. Of course it is possible to install your own network still, or buy access at a higher level (e.g., ISPs).

Well, in theory this is how it should be done. It sounds like Germany has tried to regulate instead of solve the situation, and when the regulators are bought out (as with this 'let us build our own exclusive network' deal) the entire mechanism is pointless and the consumers don't benefit.

Re:I never know how to feel about things like this

[Lordrashmi]

Yeah, I want all fiber running in one place so the backhoe can take it out in one fell swoop.

Re:I never know how to feel about things like this

[Jeff DeMaagd]

If it is run over public land, then the government has every right to dictate its leasing terms. I have no problem with other companies being charged a fair rate by DT for the use of the lines, it shouldn't be locked out or assigned prohibitive fees. Such terms were dictated to prevent excessive duplication of cables and reduce eyesores. How the fees are done in some areas is that the line owner must charge other companies the same rates that its internal units pay for the same service. Accounting rules often dictate that sub-units of a business be treated as separate businesses, and money is charged between business units.

Re:I never know how to feel about things like this

[theckhd]

But if through regulation, you can mandate that the wires must be made available to anyone for a reasonable cost (which is effectively what the EC is saying), and still let companies shoulder some of the financial burden of building the network, the government saves the taxpayers a great deal of money while achieving the same end result.

I agree that it would be nice if the gov't fronted some cash to help make fiber available everywhere, but it gets expensive fast. Until Joe Taxpayer becomes convinced that internet access is as necessary to daily life as are, say, roads, it's unlikely that the majority of taxpayers will be interested in funding such an effort.

Not to mention that the idea of a government-maintained internet makes me shudder, not just for privacy reasons, but for efficiency concerns as well. Take a look at any state DOT (in the US) for an example.

Re:I never know how to feel about things like this

[ivan256]

How is that different than having only one provider and one fiber?

Re:I never know how to feel about things like this

[schmu_20mol]

There is already a model for this concerning other lines. The only problem is that DT is harshly overcharging their competitors for the use. Hence several lawsuits are running against them (for a really long time now, btw) and the goverment is finally forced to crack down on them. DTs situation is largely coming from them being a state owned company more than 10-15 years ago.

Re:I never know how to feel about things like this

[Kadin2048]

That doesn't really help or solve anything. The problem is that most of the right-of-ways are owned by the public (they run alongside roads or highways, etc.) or are actually on private property, which the government allows private companies to use, regardless of what the property owner thinks of it (e.g. the telephone company can put a pole or interface box on your lawn if it wants, and in most states there isn't shit you can do about it).

We don't want people going and digging stuff up all the time, and we also want to encourage the buildout of new networks, and also to make sure there's competition on the service level, so that one company doesn't monopolize. In order to have effective competition, the barriers to entry need to be as low as possible. Which would mean letting anyone who wants start laying fiber. But we don't want our roads dug up all the time, so the best solution anyone has come up with so far, is telling the first person who wants to lay fiber "okay, we'll let you use the right of ways, but you have to share the fiber you lay, either with us (the municipality) or another competitor that we designate." That allows another company that shows up later to compete, without having to re-dig everything.

Just mandating that they share the trenches isn't helpful, because then you've basically fixed the number of firms that are going to be in the market, as the firms that were around whenever the first one was ready to dig. If you're a smaller startup, later on, you're screwed. The trenches are all dug and filled in by then. At that point, you're just making it a first-takes-all game, where if you can get ready to lay fiber before your competitors have the capital raised, then you can corner the market in a particular area; that doesn't help the customers there any.

I think the suggestions of public funding for infrastructure construction are probably getting more and more appropriate. I wouldn't ever want to use a government-run ISP, because let's face it, as a service provider, the government sucks balls. But managing the construction of new infrastructure is a traditional role of government. Back in the last century, the government funded the construction of canals, and the economic benefit to the states they served, and to the country in general, was enormous. Recently, government funded the Interstate Highway system. I don't think that there's any reason why some sort of flexible, upgradable network for high speed data, wouldn't be the canals or interstates of the 21st century. The key is to get government to do the rough building, and then get them the hell out and get somebody (preferably multiple somebodys) in there to actually provide service, and pay rent back to the government until the investment is paid off.

Trying to mandate cooperation between companies that are naturally in competition with each other just seems doomed to failure; the solution seems to be to create someone else to build the infrastructure itself, and not let any of them control it.

Re:I never know how to feel about things like this

[infestedsenses]

If the line is built with my tax money, then I expect free access to it.

Just like roads that I can use for free (sans tax) with a car of my choice, I would be able to connect my computer right to the main line and use the net for free.

I get the feeling that's not going to work out very well.

Re:I never know how to feel about things like this

[maxume]

You would have to be extremely careful in how you dealt with 'we're not ready yet'.

Re:I never know how to feel about things like this

[twiddlingbits]

Business can refuse service to anyone they want, excepting reasons of sex, race, sexual preference and veteran status. It's THEIR network, paid for with THIER dollars. If the network doesn't make money then they should consider opening it up for others to lease. They have bought the right of way for the cable and connections, so why should the Government basically nationalize it and make it open for everyone? Thats socialism not capitalism. There is ZERO incentive for new technologies or business ventures when there is nothing to be gained.

Re:I never know how to feel about things like this

[maxume]

It is somewhat unfortunate for Deutsche Telekom if they were not able to factor the EC regulation into their decision to invest in the network. They may have been better off buying peanuts or something.

Re:I never know how to feel about things like this

[gmack]

That is actually what they do here in Montreal Canada. The city owns the conduit and anyone who wants to can put cable inside for a per kilometer rental fee.

Re:I never know how to feel about things like this

[KDR_11k]

The Telekom is a former monopoly and still subject to antitrust laws. As such they aren't allowed to refuse services to competitors that are willing to pay the fees.

Re:I never know how to feel about things like this

[realmolo]

Well, your tax money would pay for the actual LINES, but not for the service.

Just like your tax money pays for roads, but not for your car or for gasoline.

Re:I never know how to feel about things like this

[twiddlingbits]

AHA..they are still in the penalty box! Unless of course they get the law changed. In the USA they would just buy a Congressperson or six and make the law go away.

Re:I never know how to feel about things like this

[Capsaicin]

Business can refuse service to anyone they want, excepting reasons of sex, race, sexual preference and veteran status.

Hello? We're not in Kansas anymore! We're in Germany!

Thats socialism not capitalism.

No socialism is when the government owns businesses, capitalism is when they regulate them. This is definitely a case of regulation, though I believe in times past the relevant corporation (Deutsche Telecom) was government owned.

Re:I never know how to feel about things like this

[twiddlingbits]

No COMMUNISM is when the Gov't owns the businesses. Socialism is making everyone "equal" via wealth transfer from those who have the wealth to those who do not.

Re:I never know how to feel about things like this

[zippthorne]

Nope, you still pay more. Because of the subsidy, the railroad, telco, etc don't actually need revenue from customers. Thus insulated, they can charge whatever they want knowing that if people leave their service, the subsidy will rise to make up for it. Ideally, it seems they would prefer to collect entirely subsidy with no customers at all if AMTRAK's direction is anything to judge by.

Re:I never know how to feel about things like this

[Capsaicin]

No COMMUNISM is when the Gov't owns the businesses. Socialism is making everyone "equal" via wealth transfer from those who have the wealth to those who do not.

Sorry, wrong again!

Although I would not want to argue that the dictionary definition is the final word, here's what the OED has to say:

socialism
1. A theory or policy of social organization which aims at or advocates the ownership and control of the means of production, capital, land, property, etc., by the community as a whole, and their administration or distribution in the interests of all.
2. A state of society in which things are held or used in common.

And please don't tell me what Wikipedia says as I'm too busy to correct it right at the moment. :p

Communism in fact (as you should know from your reading of Marx), is a putative stateless society which comes about because private property has been abolished and the state, being nothing but "a committee for managing the common affairs of the whole bourgeoisie" (Marx), having lost its reason for existence simply "fades away," (or so the story goes). Communists regard Socialism is a "transitional state," where the proletariat capture the bourgeios state (the "dictatorship of the proletariat") and turn it to its own ends to pave the way for the emergence of the communist utopia.

You will notice the the party that ran the Soviet Union was called the Communist Party, yet the various Soviet Republics were called Soviet Socialist Republics. Now you know the reason why.

Re:I never know how to feel about things like this

[shutdown -p now]

The business is running their network over public property. So it's not fully their network - the cables are theirs, but the land isn't. And it comes with strings attached.

Re:I never know how to feel about things like this

[twiddlingbits]

I wasn't talking about the sociological aspects ("stateless society") but rather from a business angle. And in that context your data exactly supports my case. In SOCIALISM there can be private business under strict Gov't control (see Venezula for instance) so that everyone profits equally. So limited private enterprise is OK. In Communism there can be no private enterprise.

Re:I never know how to feel about things like this

[3247]

AHA..they are still in the penalty box! Unless of course they get the law changed. In the USA they would just buy a Congressperson or six and make the law go away.

That's exactly what Deutsche Telekom did in Germany: They've gotten the law changed to include an exception for "new technologies" such as the VDSL network they're currently building. What makes convincing the government even more easy is that Germany is still the largest shareholder of Deutsche Telekom AG (the successor of Deutsche Bundespost TELEKOM).

The difference to the USA is that once upon a time, Germany and five other countries decided to found the European Economnic Community, which, now called European Community and one pillar of the European Union umbrella, takes antitrust laws a bit more serious as they are the basis for the Internal Market. How very unfortunate for Deutsche Telekom.

Re:I never know how to feel about things like this

[twiddlingbits]

That is why you BUY right of way, so you don't have to use Public property. Maybe in the EU that's different but here in the US utilities buy an "easement" from the property owners to run cables, then that easement belongs to them (subject to a few restrictions such as allowing free passage across right or way, or use as farm land, etc.). Even the Government has to pay for easements. Sounds to me like property rights over there are not the same as here.

Re:I never know how to feel about things like this

[twiddlingbits]

I seem to recall the EU "commissioners" can be bought just like gov't officals in Germany and the USA just at a higher price. IIRC, the commissioners represent each nation and have to balance national needs with EU policy. I seem to recall in the recent software patents and Microsoft anti-competition cases in the EU there was some rumors a few EU "commissioners" were "convinced" to vote for patents and for MS.

Re:I never know how to feel about things like this

[Capsaicin]

OK, this is my last on this topic. You are, of course, free to use words to mean anything you want them to. You need on conform to accepted definitions if you want to communicate with someone else. If you want to communicate with educated people, it helps to know what the words you are using actually mean (in the more technical sense which educated people tend to prefer over the colloquial).

I wasn't talking about the sociological aspects ("stateless society") but rather from a business angle.

If you want to understand the distinction between Socialism and Communism (do you want to understand?), you need to consider the role of the state (ie. that Communism is only achieved once the State disappears - fat chance!). Furthermore the statement that communism means government enforced equality is ridiculous once you appreciate this.

And in that context your data exactly supports my case.

My data? Did you actually read the definition of socialism, you think it supports your case.

In SOCIALISM there can be private business under strict Gov't control (see Venezula for instance) so that everyone profits equally. So limited private enterprise is OK.

Clearly not according to the pure definition of socialism (for which see my previous post). But since there is nothing pure in the world (as since socialism is conceived of as a transitional phase) you're statement that limited private enterprise can exist in a (real-world) socialism, is correct. It would, however, be incorrect to describe Germany as having only limited private enterprise and describe it as a socialist economy/society. It's bizarre to describe the government regulating a corporation which it has recently privatised (or is still in the process of selling off) as "socialism."

Apropos Venezuela, if Chavez really were a socialist he would be busy nationalising industry. Oh wait, just last month he nationalised the telephone service, and the electricity utilities. And he's about to nationalise the oil industry. Now if you were to cry socialism, you would in fact be correct. Also I don't share you optimism that this will bring about a situation where "everyone profits equally" ;)

In Communism there can be no private enterprise.

Correct, since theoretically communism cannot be achieved until a pure form of socialism has absorbed all private property.

for new lines that's also true?

[HTD]

I thought the former telco monopolys in europe had to open their old networks for the new telcos to even enable some form of competition. I didn't know that new investments after the opening by the now "private" company fall under the same rule. It's no wonder why there's almost no fiber optics rolled out in the EU, because nobody is willing to pay for infrastructure that must be opened to the competition...

Re:for new lines that's also true?

[Zatic]

Actually large parts of Eastern Germany already have fiber optics that where rolled out in the 90ies. On the other hand, whole towns there don't have broadband access for that reason because so far the telcos only offer DSL.

So part of the infrastructure and market demand is already there.

Also, to all the libertarian voices: the German state actually holds the majority in Deutsche Telekom's stocks, so in the end they can tell them to do whatever they want anyway.

Re:for new lines that's also true?

[3247]

I thought the former telco monopolys in europe had to open their old networks for the new telcos to even enable some form of competition. I didn't know that new investments after the opening by the now "private" company fall under the same rule. It's no wonder why there's almost no fiber optics rolled out in the EU, because nobody is willing to pay for infrastructure that must be opened to the competition...

The network T-Com is currently building is a fibre-to-the-curb (FTTC) network based on VDSL2. This means they replace old passive serving area interfaces with outdoor DSLAMs but use existing copper lines into the subscriber's houses.

T-Com, being the networks branch of the former national Telecom company (Deutsche Bundespost TELEKOM, now Deutsche Telekom AG), owns the vast majority of these copper lines (which were paid by the house owners). No competitor has a chance to do the same thing; even if they laid fibres to the former serving area interfaces, they would still need access to the T-Com-owned DSLAM.

Competitors will only have a chance if the old copper lines into the houses are phased out and fibre-to-the-home (FTTH) gains. This is because T-Com can't own the not-yet-existing fibres.

Re:for new lines that's also true?

[grimJester]

It's no wonder why there's almost no fiber optics rolled out in the EU, because nobody is willing to pay for infrastructure that must be opened to the competition...

Of course, argument presupposes something that is not true. Companies do pay for the infrastructure and it leads to more bandwidth for less money for the consumers than in countries that don't require telecom infrastructure to be open.

What's sovereignty all about?

[Merkwurdigeliebe]

Yes, some day it will all come to naught. But, still, AFAIK we have not achieved that "New World Order" as yet. So why are they all over Germany's interests? It's no wonder that some countries are not joining the EU.

Re:What's sovereignty all about?

[Asic Eng]

It's no wonder that some countries are not joining the EU.

There are countries left which don't want to join? Which ones (apart from Norway and Switzerland)? Turkey is not even on the same continent (ok half of Istanbul is). The way things are going an application by Brazil or Taiwan wouldn't surprise me anymore...

Re:What's sovereignty all about?

[pla]

There are countries left which don't want to join? Which ones (apart from Norway and Switzerland)?

You can't really just ignore Norway and Switzerland... You also can't call some of the existing members "willing".

Case in point, the French and Dutch votes a year and a half ago on the EU constitution, or the monetary unit currently used in the UK.

The EU seems, to me, like a means of shoring up Europe's weaker economies, while providing a clean regulatory environment for the stronger economies to target nearby emerging markets. At the same time, no one seems happy with the arrangement. So you have a lot of countries that pay lip service to EU membership, then fight EU rule every step of the way.

Re:What's sovereignty all about?

[Super_Z]

The *whole point* of a common market is to make sure each operator gains equal access to every market.
Deutche Telecom is the incumbent national champion in germany. When it was privatized, it inherited the
old telecoms infrastructure in Germany. With this inheritance came an obligation to let competitors
into this infrastructure. The fact that DT *modernizes* this infrastructure should not be an argument
for a new lockout.

In addition, Germany is building a national champion in DT. It essentially helps it grow fat on the domestic
arena which again gives it resources to grow internationally. This is clearly against both the letter and
intent of the EU common market.

The EU common market has been built both to give companies a chance to grow large by eliminating the problems
of entering other markets, and to foster competition so that consumers gain better choice and price. The DT
deal is clearly counterproductive to both these aims.

Re:What's sovereignty all about?

[Petrushka]

The EU seems, to me, like a means of shoring up Europe's weaker economies, while providing a clean regulatory environment for the stronger economies to target nearby emerging markets. At the same time, no one seems happy with the arrangement. So you have a lot of countries that pay lip service to EU membership, then fight EU rule every step of the way.

I have to say, that sounds like the perfect government! Weak government is a good thing; a government that someone -- anyone -- is completely happy with, is tyranny. I wish my country could join up too.

Re:What's sovereignty all about?

[Asic Eng]

Whining about the EU is one thing but opting to stay out or leaving... Whining has no consequences, but once you decide to leave or to stay out you need to face the hard reality that almost everybody inside will be better off than you. Also of course - as long as a country is in the EU, its government can blame all those tough decisions on the EU - "they make us do that". Nothing quite as convenient for a politician as that.

Re:What's sovereignty all about?

[3247]

There are countries left which don't want to join? Which ones (apart from Norway and Switzerland)?

Iceland, Liechtenstein, Grønland (which actually left the EEC as it gained more independence from Denmark).

Then, of course, some micronations: Åland, Andorra, the Channel Isles, the Faroes, the Isle of Man, Monaco, San Marino, Vatican City. Some of them are already partially integrated into the Internal Market.

Turkey is not even on the same continent (ok half of Istanbul is).

Turkey wants/ to join (and their chances are better than most people think; Turkey has a very European culture, after all; and there is a customs union between the EU and Turkey.)

The bad car analogies, they do nothing!

[spun]

You drive your car over public streets, you've got to let the government (i.e. the people) tell you how you can use your car.

There, fixed that for ya'.

Re:The bad car analogies, they do nothing!

[stomv]

It's a good analogy, and the government does tell us how to operate our cars.

Stay in your lane.
Don't exceed this speed limit.
Don't drive while intoxicated.
Don't drive a car that doesn't pass a safety inspection.
Don't drive a car that doesn't pass an emissions inspection.
Don't drive a car without operating your turn signal.
Don't drive a car without two functioning head lights.
Come to a complete stop.

You catch my drift. The government (ie the people) do indeed tell you how you can use your car, and they also have the authority to tell you how you can use your fiber optic network.

Re:The bad car analogies, they do nothing!

[Nivag064]

Yes!

I want to make sure that other people have some competence at driving, and I'm willing to be taught how to drive safely.

I do not want you are anybody else driving cars that are dangerous.

There are many reasons to justify governments telling you how to use your car... some of them are actually valid!


-Nivag

What if there is no fiber?

[kmac06]

That's great for creating competition once the fiber is already lain. But what's the motivation for laying down the first network of fiber if there isn't one, if you are forced to turn around and give that advantage out relatively cheaply to your competitors? Of course, they could charge unreasonably large fees to lease the lines, but presumably that would be treated the same as not leasing the lines at all under this decision.

Re:What if there is no fiber?

[Pollardito]

the choices aren't just :

1. don't build it
2. build it and lock it up
3. build it and charge unreasonably large fees

there's always the choice of building it and charging reasonable fees. as long as the company and the regulating body can agree on a fair fee, they'll be making money off these fees for a long period of time and should be able to more than recoup their initial investment.

Re:What if there is no fiber?

[Aqua_boy17]

What if there is no fiber? I'm guessing all the tubes will clog and the internets will become constipated.

Re:What if there is no fiber?

[rmerry72]

here's always the choice of building it and charging reasonable fees. as long as the company and the regulating body can agree on a fair fee

Ah the sticking point that makes 3 unrealistic. "Fair fee" is rarely agreed upon. That's the nature of "get what the market will bear" capitalism where the company wants as much as it can get. The company has to do this to provide the most return to its shareholders. "Most" return, not "fairest" return. Private companies care nought for fair.

And so neither build it, niether private nor public money, and the populace wait until the government capitulates in some way, usually by chaing their definition of "fair". This is a natural consequence of privitased national interests. Once they are privatised they become monopolies and only unfair regulation can rein them in.

The same game is playing down under in OZ. Telstra won't build the fibrre network until the ACCC agrees to allow it to set pricing. Gov't says, no build it for us and then we'll decide what return you get on your investment. Round and round and nothing gets built.

Oh, BTW, the analogies to highways that I see here are spot on and exactly what govts are trying to do with telecom infrastructure. No govt here in OZ has built a highway out of tax payer money in more than a decade. Its all private/public meaning private companies build the roads and the public gets screwed with tolls all day every day. Govts don't build national infrastructure anymore, they no longer see that as their role.

Regulation is never the right answer.

[mark3748]

So Deutsche Telekom pays to build a large fiber network, and they own that network. They decide they don't want anyone else using it, that's their business. It is a private network built by a private company, and the government has no right to tell them what they can and cannot do with it. Of course that's just a dream, especially since this is happening in Europe, but even in the US you're likely to have the same issues, and it's sad. It will more than likely end up being a good business decision to lease access to the network to other companies, however I see absolutely no reason to force them to do so. I just wish that private property and liberty still meant something, somewhere in the world.

Re:Regulation is never the right answer.

[guruevi]

It's not that it's THEIR network, such things get hugely funded by local, regional and federal governments. It also runs in public property (the streets) and thus could cost a lot of civilians (driving eg) some money going around traffic while they are working on it.

Next to that, the law doesn't state that they have to give it away for free, in a 'free business' (or liberal?) market, DT would start charging huge amounts of money for using their network, disproportionate to the actual cost, to keep newcomers out the market. That and DT used to be (and might still be partially) state-owned like in a lot of European countries (Belgium has Belgacom for example)

Re:Regulation is never the right answer.

[Umuri]

You're forgetting that the lines they lay out run across mostly public and private land not owned by the corporation.

In return for the use of such land, they are obligated to open their network to competitors. It's the argeement most telcos make with their governments to get land rights, as WELL as prevent dozens of networks all wasting space

In the UK BT is similarly obligated

[TomAnthony]

In the UK, BT (the formely state owned Telecom provider, now privatised) is obliged to provide competing operators with wholesale broadband access:

http://www.out-law.com/page-3519

I'm not sure how similarly this situation mimics that in the article, asides from with BT the EU wasn't involved in the decision.

No fiber optics in EU ? Are you sure ?

[neutrino38]

No fiber optics?

Are you sure ?

I don't know the German situation in details. I don't know if T-Online has a serious competitor but I am pretty sure that they eventually have one. We had the same situation in France and France Telecom was very powerful. I took one Entrepreneur (Xavier Niels) to create competition. Other operators followed.

German are very smart and I these day I am a bit caution on EU intervention regarding infrastructure. Let's see what's happening.

Re:No fiber optics in EU ? Are you sure ?

[3247]

I don't know the German situation in details. I don't know if T-Online has a serious competitor but I am pretty sure that they eventually have one.

T-Online is just the subsidiary of DTAG that provides Internet access, and they do have serious competition. It's T-Com, another subsidiary of DTAG, which ows the network.

You can actually choose between the following options:

• phone line/DSL from T-Com, Internet access from T-Online.
• phone line/DSL from T-Com, Internet access from a competitor.
• phone line from T-Com, DSL and Internet access from a competitor.
• phone line/DSL and Internet access from a competitor.
• no phone or ISDN; DSL and Internet access from a competitor.

However, as T-Com owns all of the subscriber lines (well, nearly all of them), they don't have serious competition: Even if you choose one of the later options and get everything from a competitor, this competitor will have to rent the subscriber lines from T-Com.

watch out.. my libertarian is acting up today...

[Churla]

If the company paid for rights to the land it's cable goes through. And if the company paid the cost of deploying the fiber and none of it is government funded/subsidized then the company should be able to do as they damn well please with it.

If you say "develop and deploy this state of the art network which will increase the countries infrastructure and help along network access in the country, but we're going to make you let your competitors use it too" then I would say that's a good incentive to respond with "well then the government should build and maintain it".

Re:Good!

[nospam007]

I am not entirely sure how EU law works, but do they have any actually authority, or can they just make recommendations to the government of a nation. I wouldn't have thought they have the ability to take any actual action against Deutsche Telekom?
--
They have and they do it all the time, Microsoft has been many times among them.

What would happen if Deutsche Telekom said

[wiredog]

"Well, we can't make a profit on these lines, or even break even, so we're just going to shut down the whole project."?

Re:What would happen if Deutsche Telekom said

[muuh-gnu]

The same as when Microsoft would say: "Well, we can't make a profit on Windows, or even break even, if we arent allowed to kill off any aspiring competition, so we're just going to shut down the whole project."

Nothing.

They can make profit on the lines, they just want to kill of the competition in order to make even more profits and gain a grip on the whole market. I just wonder how the German goverment actally approved of this lunacy, so they have to be attacked by the EU.

If i was the german telecom?

[TinBromide]

I'd let the competitors build it and lease it from them. Why invest the capital in a network meant to keep the lines open for your customers when if you didn't, your competitor would have to invest the same capital, get an EU notice and then proceed to force them to let you lease the lines from them?

Thank you Captain Obvious

[spun]

You have just restated my point as if I did not understand the point I was making, or as if no one else could understand it. Are you implying that I am an idiot, or that the rest of /. is?

Re:Thank you Captain Obvious

[TubeSteak]

Are you implying that I am an idiot, or that the rest of /. is?

I'd like to imply that the car analogy was the idiot.

The CRTC In Canada.....

[8127972]

.... Made Rogers cable do this a while ago. The decision from the CRTC (Canada's version of the FCC) is here:

http://www.crtc.gc.ca/archive/eng/Decisions/1999/D T99-11.htm

I'm pretty sure they forced Bell Canada to do the same thing as well.

Re:The CRTC In Canada.....

[greed]

The difference being, Bell Canada actually did open the plant. And used that as justification for shoving PPPoE down everyone's throat. (And then set their network to drop ICMP MUST FRAGMENT packets.)

I have never seen a cable internet reseller in a Roger's area, but there's lots of DSL resellers in Bell's area.

And it's not like Bell's wires are free to the DSL resellers, the CRTC directive just requires that everyone be able to lease space and bandwidth in the appropriate places. Once the line is going, it's better for Bell--no customer support calls.

Even though it's all the same technology, resellers can still compete for options and policies: my provider offers a static IP, uses a buy-your-own-modem instead of forced-rental program, and doesn't have a (broken and/or slow) transparent proxy on port 80 or have port 25 blocked. Their policy on viruses is, "if your computer is susceptible to viruses, you should do something to protect it."

Not for everyone, but there's other DSL resellers who are.

always separate

[yaminb]

While the car/highway analogy is great...why do we have toll roads? Because governments increasingly don't want to fund huge expensive public infrastructure. They want the private sector to shoulder the risk and the financial burden. Not to mention the bureaucracy and just keeping government as small as possible.

So I'm very much a fan of forcing these carrier type networks to separate their business into 2 parts.
Ideally, they would even be 2 separate companies.
1. the network itself
2. services they provide on that network

Any business should map out what their charges are for the network itself and how much they're making from services. If they don't, they shouldn't be involved in this large scale project. As far as I'm concerned, this should be done for all networks (cell phone companies included)
Then let all the other companies fight it out at the service level. It's worked wonders for me. I'd probably be paying 40 dollars a month for a VOIP phone if Bell had not opened its lines. Now I pay less than 20.

The competitors have to PAY for thier use

[erbmjw]

The competitors are not getting a free ride, they will have to pay reasonable{market bearing} rates to Deutsche Telekom for the use of the lines. Just like in Canada when Rogers and Bell had to open their lines up to competitors - the competitors had to and still do pay for the use of the lines.

Lease

[ajpr]

Why not give Deutsche Telekom a 3 year (or whatever timeframe is suitable) lease where they have exclusive access. As soon as the lease expires, it becomes open to all competitors. This way DT can make a profit and the freeloaders can jump in after a short wait. If they don't want to wait they can build their own networks.

I think you are right

[excelsior_gr]

Seeing it as a community project is a good perspective. Nevertheless, the government will in that case be the one that will have the "real" monopoly, since it can control the cost of the services. In addition, governments are elected by the people, and then we may see things like "Schroeder for Kanzler! - get your new cable connection NOW for only 19.99" in the election campaigns...

However, one must be carefull with the taxpayer's money. They should come from a special "eTax" or something, because the usage of the www is still not as broad as the usage of the highways...

Mach's gut!

Bad for der Telekom, good for der Kustomer?

[gd23ka]

Telekom has their hands in so many unsavory deals, just think of "Toll-Collect"
the T-Systems operated Autobahn monitoring and automated Toll-Collection system
so I'm sure they'll find a way around this too. One thing you can be certain off
is that the additional capacity will not benefit the national internet infrastructure
per but will then be rented out for example to digital view on demand pay tv services
Telekom owns shares in.

Re:Good!

[jsoderba]

The EU has very extensive legal authority over economic issues, particularly in regards to market competition. The member states are tied to the union by dozen of treaties and thousands of laws. The EU courts can order fines against individuals, corporations and governments if they violate the laws. Obviously, these rulings have to be enforced by German police, just like the rulings of US federal courts are usually enforced by local or state police. Unlike the US the EU doesn't have troops to send in if the local law is unreliable, but defying the union can (theoretically) lead to sanctions and even expulsion.

Re:Good!

[karikasper]

The EU institutions have exclusive competence over regulating competition within the EU (it is one of the very few areas where almost all of the Member State powers have been given up). The European Commission in particular has been pushing the liberalisation of formerly state-owned monopolistic services. Read more... http://ec.europa.eu/comm/competition/liberalisatio n/overview_en.html

Monopoly problems

[DancesWithBlowTorch]

The situation is quite complicated here.

On the one hand, you are right, if Deutsche Telekom builds a new network, one would assume that it is theirs and that they could do with it as they please, renting it out or keeping it to themselves.

On the other hand, the Telekom is a former state owned monopoly, and the German TelCo market is far from well balanced: It takes a huge investment to build a nationwide fiber-optics network, and it seems only the Telekom has the means to do so.

So do we want to regulate this market? I think, as with so many EU decisions, this is actually a very wise ruling that only looks ignorant at first sight. It will likely lead to a situation where the Telekom will refrain from building the network, eventually persuading the state (or a newly arrived competitor with lots, and I mean lots of cash on their hand) to build the network. High-speed internet access is a utility, nearly as important as energy by now. If the state builds the net and then rents it out to the ISPs (like it does now with the real life highways -- Germany has a highway toll system for trucks), the market might tend to be much better balanced. Unfortunately, most of the political arenas were the EU has a say are complicated, free market economy issues like that: The best rulings are often only understandable for insiders and tend to seem unfair to the general public. The EU definitely needs to find a few areas of more popular value to brush up its image among the unwashed masses, lest it turns into a hugely unpopular bureaucratic monster.

Missing the larger issue

[gr8_phk]

Much of slashdot is missing the larger issue here. The EC is telling Germany what to do. A couple years ago I warned a German co-worker friend of mine that they must keep an eye on that whole EU/EC/E-whatever or it will try to become a single government over all of Europe. "Oh no, that won't happen" it was all just about having a common currency and other such nice things - the power will remain with the member sta.. err countries. This sure looks like federalism vs states rights all over again. Let's hope the EU doesn't have to have a civil war over it. This isn't just a German issue, all of Europe should be upset about it.

Re:Missing the larger issue

[Stevecrox]

Its not very hard, the EU is the European Union, basically it is a framework in which member countries can co-operate. You have the European parliment, this is pretty much what it says on the tin. I vote in a MP he/she goes and tries to propose laws and they debate/watchover about European Union institutions. You have the European Commission, this is basically a watchdog. If the European Parliment makes a law for example all crash helmet safety standards must conform to the EU safety standard then if a country doesn't do this then they are the people who take said country to task. Sometimes this is a good thing. In the above example I believe the crash helmet standard rose to meet the EU standard, in others bad as the UK was forced to lower its safety standard. If you don't follow the law the EU commision will refer you to the Court of Justice where you country (or company) can be fined and forced to do certain things. There are other branches like the European Ombudsman and the council of ministers but we will forget these for now.

In many ways some of the moves made by the EU are for turning it into a federation of countries, mostly I don't object to the EU (excusing the CAP France give me my money back!) I wouldn't be surprised if we bagan to see more and more challenges against Germany and France who were the strongest politcal forces in it. Since the expansion of the EU and all those lovely countries the UK got buddy buddy with things have started to swing from 'old europe' to 'new europe'. The EU does a lot of the member countries alot of good (except the stupid CAP) This is nothing new, and nothing to get alarmed over, the Euro was something to worry about, not this.

So why they would like to build this network?

[ghostbar38]

I mean, is their network. Why should they share it? They build it!.

But anyway, it they want to rent it then they could do it, but they shouldn't be obligated to share their network, then there's no incentive to build a fiber network, I wouldn't do it... If you think about it is stupid

Ok, it stops monopoly, and stops too new develops and new networks...

Re:So why they would like to build this network?

[ioshhdflwuegfh]

Having a little debate with yourself?

Inherited monopoly

[Anonymous Coward]

Go the EU. This is desperately needed.

Let's be clear, Deutsche Telekom has inherited a massive market share, as the former state telecom.

They would never have achieved this in a competitive market. They have vast numbers of lazy, bad-attitude employees and anyone living in Germany knows they cannot deliver the simplest things in a reasonable timeframe.

Their business arm is worse still -- winning contract after contract by playing on their control of the infrastructure ... and also bribing decision-makers.

Recently privatised utilities do not deserve any breaks. They must be put under pressure to force competition into the market, for the benefit of consumers. Germany is already struggling to achieve this; any further extension of DTAG's monopoly is totally unacceptable.

Re:Good!

[ioshhdflwuegfh]

Yes, just like in the US.