The Federal Network Agency's first decision on fees that a company can charge a competitor for access to its publicly funded fiber optic network is already illegal. The Cologne Administrative Court announced this on Monday with reference to a decision dated March 15th. The judges followed an urgent application from Vodafone. Their main argument: the regulatory authority made a mistake and jumped to conclusions. The decision is final and final (ref.: 1 L 2288/23).
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According to Section 155 of the Telecommunications Act (TKG), network operators who have used government funding for widespread expansion must generally provide active and passive access products for competitors. This obligation is intended to promote competition on the end customer market. If both companies do not agree on the contractual conditions of this open access, the Federal Network Agency can, upon request, determine these in a dispute resolution procedure.
The regulatory authority made use of this authority for the first time on October 31, 2023. In arbitration proceedings BK11-23-003 between Vodafone and the Munich provider M-net, it set monthly fees per end customer connection for access to a publicly funded fiber optic network in the Main-Kinzig district, which the Düsseldorf group operates. To do this, the network agency calculated average prices based on monthly fees that had already been agreed for the shared use of fiber optic networks between companies in areas of Germany where none of the parties involved took advantage of a public cash injection.
M-net complained about excessive fees from Vodafone
From M-net's perspective, the central point of contention was the wholesale service charges initially set by Vodafone. These are too high to be able to compete with Vodafone at the end user level. The regulatory authority then set the monthly prices at prices between 16.07 euros net for so-called bitstream access with 100 Mbit/s uplink and 50 Mbit/s downlink and 41.04 euros for bandwidths of 1000 or 500 Mbit/s. Vodafone defended itself against the requirement with the urgent application that has now been approved.
The administrative court based its position primarily on the fact that the network agency's decision was formally illegal. She did not give those involved a sufficient hearing. According to the judges, after the regulatory authority evaluated a market survey, neither Vodafone nor M-net had the opportunity to comment on the question of how Monday fees were calculated.
The court assessed the Federal Network Agency's pricing as incorrect because the average calculation mixed fees from different business models with varying risk distribution. The regulatory authority should not have limited itself to setting monthly rental fees. However, other contractual conditions, such as the question of whether there is a minimum purchase quantity or whether there are one-off fees in addition to the monthly amount, were left out.
The Federal Network Agency wants to examine the decision thoroughly
A spokeswoman for the Federal Network Agency told heise online that they would first examine the administrative court's reasons and “then decide on how to proceed.” Vodafone and M-net did not initially respond to a request for comment on Monday afternoon.
The process is being closely watched in the industry. The original decision by the Federal Network Agency was considered a precedent for the regulatory authority's line in open access disputes. Market participants also attach great importance to the dispute for future comparable proceedings.
For the first time in November 2022, the regulatory authority forced an operator, Netcom Kassel, to provide an open access offer for a competitor on a subsidized network. The Göttingen company Goetel submitted the corresponding application.
Hermann Rodler, former managing director of technology at the Munich provider M-net, broke out in 2022 for the open access model, in which operators allow competitors onto their network. This is definitely a business. In Munich, three out of four mobile phone operators purchased access to dark fiber from M-net. This means traffic comes onto the network, even if the margins are larger for self-marketing.
(vbr)