Brussels, 02/03/2004 (Agence Europe) - The European Commission has welcomed the proposals from German operator, Deutsche Telekom, to reduce its tariffs imposed on its competitors for access to the company's "local loops". These proposals envisage transitional measures, via a reduction in tariffs, which will regulate the situation as from 1 April till the end of the year. As from 2005, Deutsche Telekom will again revise its tariffs to an acceptable level.
The investigation was opened in May 2002 on the basis of accusations that Deutsche Telekom had abused its dominant position by way of a margin squeeze via its wholesale an retail tariffs (EUROPE 9 May 2002 p 9). This behaviour was considered anti-competitive, given the obligation imposed a year earlier by the EU on Member States to provide shared access to its local loops in an effort to provide new arrivals on the telecommunications market with fair and non-discriminatory conditions. The examination by the Commission judged that Deutsche Telekom's tariffs for line sharing were so high that there was little scope for competitors to make profits in offering the broadband service at retail level and prevented new competitors from entering this market. Deutsche Telekom still has around 90% market share. In light of the proposed tariff reductions, the European Commission has accepted the commitments proposed by Deutsche Telekom.
The final decision will be up to the German competition authorities in charge of the case. If they agree to the commitments proposed by Deutsche Telekom, the Commission has indicated that it will conclude its investigation. The German operator was fined EUR 12.6 million for abuse of its dominant position last year.