Brussels, 03/08/2005 (Agence Europe) - On Wednesday, the European Commission welcomed the decision by Deutsche Telekom (DT) to change its application to the German telecoms regulator, Bundesnetzagentur, for the approval of wholesale fees to competitors for shared access to the local loop, or line sharing. DT thus complies with the commitments it had given the Commission to prevent an inquiry being launched for presumed abuse of dominant position. In 2004, DT had suggested reducing the wholesale tariff demanded of new entrants for shared line access, giving access to the high frequency local loop band required for high output broadband services via line sharing. The initial amount of 4.77 euros was too high to allow other companies to compete with DT on the retail market, and the Commission's competition services had said that such a fee could lead to a margin squeeze in the form of abuse of dominant position. By lowering the monthly tariff for line sharing to 2.43 euros, DT had convinced competition services and managed to have Bundesnetzagentur fix the tariff for one year. In May this year, however, DT re-applied for 4.77 euros to Bundesnetzagentur, inciting the Commission to call for further information leading to the same verdict as in 2004, namely that such a fee would lead to a margin squeeze. Going back on this, DT then hoped to renew the current tariffs of 2.43 euros per month, which was endorsed by Bundesnetzagentur on Wednesday, a decision that corresponds to the European Commission's aim of setting equitable tariffs in place for line sharing, which gives more certainty on the German market, a Commission press release explains. “My services have acted quickly against DT's attempt to increase its wholesale prices. This action, coordinated with Bundesnetzagentur, prevented tariff structures which could have destroyed line sharing business models, fosters competition and works to the benefit of the consumer”, Competition Commissioner Neelie Kroes stated.
The local loop is the physical circuit between the customer's premises and a telecommunications operator's local switch to which a company may have access for broadband services, regarded as line sharing.