German regulator lowers LLU charges by up to 71%

bealtine

German regulator lowers LLU charges by up to 71%

The Federal Network Agency has reduced prices by taking two important decisions on charges for access to the local loop, the so-called "last mile".

The first decision approved new one-off provisioning and termination charges with retroactive effect from 1 July 2005. For the simple transfer of a two-wire copper pair without work at the end customer's, a provisioning charge of €43.10 has been approved. This is approximately 10 percent less than the last approved charge. Reductions for new lines amount to as much as 32 percent.

Termination charges for most of the access variants have been markedly lowered, too. The charge payable by competitors for termination of the simple copper pair when the end user switches to a new provider or returns to Deutsche Telekom AG (DTAG) has been reduced by 71 percent from €19.95 to €5.80. When termination is not accompanied by a change of provider, the charge will fall by 21 percent from €36.65 to €29.10.

These charges are paid once - in addition to the monthly rental - by competitors when they rent or return DTAG loops.

The second decision approved the charges for shared access to the local loop, known as line sharing. In line sharing, the loop is divided into a higher and a lower frequency portion. The lower portion can still be used by DTAG for voice services, for instance, while the higher portion is used by a competitor for data services (typically for high speed Internet access based on DSL).

From 1 July 2005 a monthly rental of €2.31 will be payable for access to the higher bit rate portion of the loop. This is a reduction of almost 5 percent as compared to the last approved charge and to DTAG's submission.

The one-off provisioning and termination charges have been reduced in respect of line sharing, too. The tariffs for simple transfer and new lines fell by up to 17 percent. For simple transfer, competitors will be charged €51.43 instead of €60.82.

As is the case for local loops, termination charges for line sharing are now also differentiated according to whether or not switchover work at the end customer's is required. The charge including simultaneous switchover is now €10.48, a reduction by 83 percent. Where switchover work is not required, the charge is €51.22, a reduction by 19 percent.

"After these reductions, the German rates are in a very good position by European standards, ranking among the lower ones in the EU countries. The prices for access to the higher bit rate portion of the local loop are lower than in France, where line sharing turned out to be a very successful business model", Matthias Kurth, President of the Federal Network Agency, declared. "Today's decisions take account of increased efficiency, recognise necessary costs and create the prerequisites for boosting competition in the broadband market. The framework conditions have been defined. Now it is for the companies to use them as a basis for further investments to speed up the roll-out of broadband lines in Germany", Kurth said.

To give market participants a sound basis for planning, all the charges have been approved for two years, ie until the end of June 2007.

eircomtribunal

While not on topic with this thread, the latest statement of the German regulator on wireless licences, especially with 3.5 gig, might be of interest:

27.07.2005
New wireless Internet access opportunities

Kurth: "Additional spectrum to be used flexibly"

With the consultation it has launched today the Federal Network Agency is hoping to break new ground in order to provide the German market with spectrum for high speed wireless Internet access with the minimum of delay. The spectrum in the 3.5 GHz band, designated "Fixed Wireless Access" (FWA), is expected to be available by the end of 2005.

This spectrum, allocated in part to Wireless Local Loop (WLL) in the past, is suitable for broadband wireless systems providing, in particular, high speed wireless Internet access."We hope, of course, that the additional spectrum will provide alternatives to landline access, alternatives that will deliver broadband Internet access in areas not opened up by DSL", Matthias Kurth, Agency President, declared.

In the FWA debate that first began at year's end 2004 the Agency is following a technology-neutral, highly flexible regulatory approach. The aim is for the 3.5 GHz spectrum to be deployed for diverse technologies, WIMAX being but one of the candidates. The purpose of use was also deliberately left wide open. The frequencies are to be used primarily for FWA and for Internet access, yet it will also be possible to fill out spare capacity with other usages. "We've learnt the lessons of the past", Kurth said. "We must give the market more scope for efficient spectrum use than we were able to by setting requirements as we did with WLL, for example. The pace of innovation for wireless technologies is so dynamic that our determinations must reflect this pace."

The spectrum for use is a maximum of 2 x 84 MHz paired, but availability is regionally lower. Should demand be greater than supply, the Agency will seek to comply with registered requests by recourse to the 3.6 to 3.8 GHz band. A new registration system with greater specificity than at its conception will help the Agency achieve its goal of assigning frequencies that reflect requirements to the greatest possible extent. "On more than one occasion in the past we've seen plans made for wonderful, but unrealistic projects, projects however that were not really consistent with the situation and trends in the market and which, in retrospect, led to spectrum being blocked more than temporarily. In future, frequencies should be assigned so as to reflect the stage of infrastructure rollout at the particular time. Any number of schemes can be set out, but we will not be taken in by unrealistic plans. Only those who really invest and begin wireless operation promptly will be able to secure the usage rights", Kurth declared.

The registration procedure is also enabling the Agency to make rapid strides in introducing greater flexibility to spectrum management. The procedure is a multi-scope one, allowing not just a variety of business models in themselves but also both local and regional ones. "Nor are we stipulating any coverage areas. It will be up to the providers to define their presence as they see fit", the Agency President said.

"If interest really is very great, we cannot guarantee, however – even with maximum flexibility and effort on our part – that there will not be overlap and that it will be possible to fulfil every wish easily. The spectrum we have available is simply not infinite", Kurth went on. If wishes do overlap, the new registration procedure will continue the tradition of dialogue with the market players. It includes the option of self-coordination by the competitors. Before an official decision based on the statutory conflict resolution mechanisms is taken, the market players will be able to attend to their interests individually and independently, in line with market considerations. If coverage areas overlap, there will be the route of mutual agreement resolution. Thus for instance, players will be able to work out how to decouple coverage areas geographically or technically, or agree possible usages above the level of pure assignment. The procedure therefore enables rapid market access for a number of operators with different business models.

"To avoid any misunderstanding", Kurth said in conclusion, "the frequencies themselves – notwithstanding our innovation drive – will be assigned strictly on the basis of the Telecommunications Act. Preceding registration is, as it were, an Agency service designed to contribute to the avoidance of conflict, wherever possible, and to encourage the co existence of different investments."

The German regulator's web site also has a substantial handy links page to all the regulators and various organisations in this area:http://www.bundesnetzagentur.de/enid/cec4dc4834acfc7f0a2932cf7424ece4,0/nu.html

P.