, we expect BNetzA to notify to us further plans concerning the technical
parameters and the pricing of the Layer-2 access product, which will serve as a replacement for
the potential loss of LLU in a vectoring context.
Review of Telecommunications Regulatory Framework
Vodafone provided a comprehensive response to the public consultation questionnaire
(December 2015) and a summary is included in the background.
Vodafone was very vocal in expressing its opposition to BNetzA's plans to allow for
vectoring in Germany, both at national level but also very much here in Brussels.
Now that BNetzA has published its decision to allow DT to deploy Vectoring im Nahbereich
in principle, a fall-back position of Vodafone is that they would at least like to ensure that
the technical parameters for the Layer-2 Ersatzprodukt
are as closely aligned as possible
with a physical unbundling product, allowing an access seeker a maximum of flexibility and
room for product innovation and differentiation.
Article 4(2), first indent
Review of Telecommunications Regulatory Framework
Thank Vodafone for their active participation in the public consultation on the telecom review.
Listen to their views on how the regulatory framework could be improved.
Stress the goals of current Commission initiatives to foster infrastructure investment in the
single telecoms market for ubiquitous broadband coverage and more and better services.
Reassure that the future Regulatory Framework will promote investment in infrastructure by
focusing on the remaining bottlenecks.
III. Speaking points (only if requested)
Review of Telecommunications Regulatory Framework
Introduction and Connectivity
• It is obvious that a real DSM only materialises if our citizens and business have access to
affordable and unconstrained connectivity, fixed and mobile, that supports digital
• In short, connectivity, and increasingly connectivity to very high speed networks, has
become an imperative component of the single market. This is a view shared also by the
respondents to our public consultation. Many respondents point to the need for policy
measures and adjustments to current policy and regulatory tools to support the
deployment of infrastructure in line with future needs.
• In order to reap full benefits of the digital economy, we rely on a competitive telecoms
sector which invests in high-performing networks.
• Market Regulation, Competition & Investment
• I am a strong supporter that competition is the main driver for investments and bringing
the best outcome for consumers.
• As we said on many occasions - access regulation to dominant networks will remain a
central mechanism of the telecoms framework.
• However, business as usual will not help to achieve the DSM ambition. Adaptations to
the regulatory model are needed if connectivity ambition is to be achieved.
• Such adaptations should ensure that every market player would then have to have equal
chances to invest – or if necessary to co-invest – and those who take that chance should
then also get the benefit.
• We must have a regulatory model which leads to a race to invest. Infrastructure-based
competition should be incentivised wherever it is possible as it provides the only
sustainable form of competition. All players, big or small should have this opportunity.
Therefore, facilitating access to civil engineering and non-replicable network assets is
• I am a strong believer in encouraging investment projects which are based on open, good
faith and reasonable co-investment offers, including a possibility for all players to
• This would ensure that at least the current level of competition is kept when a new high
capacity network is build - by maintaining regulated access for broadband at the level that
was equivalent prior to the new investment.
• 5G networks will be providing connectivity solutions to smart devices used within
different sectors like automotive, health, energy and broadcasting. We need to enhance
the spectrum management framework to boost digital network and services' rollout, based
on competition, innovation and investment.
• This is a great opportunity for Mobile network operators.
• Universal service
objectives and methods need to be brought up-to-date.
• Changes to sector's governance will also be needed in order to support the substantive
adaptations to the framework.
• We will need an efficient EU system of regulatory authorities to increase regulatory
predictability for market players. This would necessitate reinforcing the competences of
regulators and their capacity to act towards the single market in the European bodies.
BEREC must have a stronger basis and commitment to work towards the DSM.
• My ambition is that the proposals could be agreed by the end of 2017, so that the new
rules are effectively applied before 2020.
• We have the task to develop a framework for the 3rd decade of the 21st century.
• The challenge is to establish a future-friendly framework supportive to our overall DSM
As you will know we had our own serious concerns with BNetzA's original April proposal
for vectoring in Germany.
Following our serious doubts letter to BNetzA, the German regulator withdrew its plans on
16 June and re-submitted revised proposals, which addressed a number of our – and as I
understand also some of your - main concerns.
However, we remain very much aware of your (and other operators') concerns regarding
Vectoring in Germany, and in particular concerning the appropriateness of the Layer-2
Bitstream access product as a replacement for the loss of VDSL-quality unbundling.
In this respect we asked BNetzA in July, to improve the technical means through which
alternative operators can provide internet access over DT's upgraded/vectored networks and
asked them to submit to the Commission its plans concerning the technical parameters and
prices for the relevant access products, which we will then assess against our previous
We take note of the fact that, last week, BNetzA's published its decision concerning the
principles of Vectoring im Nahbereich. This should offer everyone involved more clarity
and legal certainty, much needed to make important investment decisions.
However, we are now carefully assessing the final measure of BNetzA to see whether the
German regulator has taken utmost account of our July comments and to follow this up as
appropriate with the German authorities.
We are aware that the industry groups representing access seekers have reacted with
disappointment regarding BNetzA's decision and it goes without saying that we will remain
in close contact with the German regulator to ensure that the forthcoming proposals in
particular for the technical details of the virtual alternative access product and its pricing will
be in line with the parameters we have set out in previous guidance to all regulators in
general and to BNetzA in our July decision in particular.
We will continue to use our influence to ensure that the regulatory regime for vectoring in
Germany strikes the right balance between network upgrade and high quality access for
competitors and that the technical details and pricing of the alternative Layer-2 product will
allow for sustainable competition and a wide choice of products for end-users.
How can access regulation incentivise investments in very high capacity networks?
Should more focus be put on the assessment of retail competition before regulating
wholesale markets? Should commercial agreement be taken into account in regulation?
• Many factors impact investments and many of them, such as overall economic environment,
GDP, population density, have very little to do with regulation.
• However, regulation also has an impact on the investment environment. The investment
needed to provide Europe with a future proof infrastructure for the digital age requires
ensuring a sufficient return for new investments relative to risks.
• We need to increase certainty for investors. This involves setting the right conditions for
investments in high-capacity networks and reducing divergences between regulatory
• Regarding market regulation, we should remember that we ultimately regulate only to
address market failures in order to assure good end-user outcomes. The retail market may be
competitive without heavy regulatory intervention because of competing infrastructures.
Infrastructure-competition also often incentivises operators to open their networks for third
parties. Here we should probably give more space for commercial access agreements, subject
to necessary ex post dispute resolution safeguards by NRAs. The emphasis on addressing
retail-level problems is already accepted practice by many NRAs, even if it is not directly
enshrined in the Framework. However, the emphasis needs to become more prominent as the
structure of networks and the dynamics of wholesale markets are becoming increasingly
varied and complex.
What is your preferred method to realise high capacity networks in (often rural) areas
with one infrastructure operator and no viable case for infrastructure competition?
What innovative access regulation models would you find acceptable in promoting
investment in these areas?
• To address the investment challenge we start from the existing premise that competition is
the main driver for investments. Access regulation has allowed market entry and a healthy
level of competition, especially at retail level. However, more emphasis should be put on
regulatory models that give sufficient space to investment competition rather than focusing
on access-based competition. To achieve this we are considering a set of measures.
• Our starting point is that public funds can help to reach some of the most remote areas with
NGA networks, but they cannot bridge the connectivity gap that we have in Europe. It is for
market forces to achieve the best possible network in each area.
• Co-investments, provided they have the right conditions, can play an important role to ensure
that the risk is shared between operators, including for the riskiest investments, and that the
deployment of new infrastructure is not at the expense of end customer choice. We have seen
examples in several Member States, which are starting to reshape the structures of NGA
• In some circumstances, local initiatives aggregate demand and bring enhanced networks to
areas where the market did not deliver. If other operators move in to respond to their
investment, their business case may be fatally compromised. It may be necessary for
legislation to intervene and protect local investment initiatives.
• In order to target regulation to the needs of the most disadvantaged areas, national regulators
must have a clear picture of the reach and economic potential for the networks that are
deployed within their territory. For this reason, regulators' powers and role in mapping
networks in the national territory may need to be enhanced.
Do you consider that a market structure with two or more fixed networks has a risk of
causing consumer harm (less investment, higher prices, lack of product innovation and
choice) without some form of access regulation? What access regulation model would
you consider acceptable in these markets? What are the conditions to be fulfilled (e.g.
symmetry, regulatory certainty)? Could access regulation bring risks to investment
incentives in such markets?
• In the EU, we started from monopolistic market structures in our sector. The fact that
liberalisation and regulation have led to oligopolistic market structures is already a great
achievement for end users.
• Infrastructure competition has a positive effect on investments. Where alternative
infrastructures compete for retail and sometimes wholesale customers, they have a greater
incentive to improve the quality and reach of their networks.
• There is no magic number of infrastructures that makes a market effectively competitive.
Oligopolies may or may not lead to consumer harm and to retail market problems. This
depends on many economic and technological factors, which can provide incentives for
healthy competition, or rather for the opposite.
• The Framework already provides for a test to address a market with several network owners,
in the case where the conditions for tacit collusion, or joint dominance/SMP, are met. Further
clarity could be brought.
• As to other situations, we have to protect market dynamics and end users, but also be mindful
of the risk of overregulation. Regulation should only intervene where it is necessary and
appropriate, because the connectivity goals in terms of quality, choice and price are not met
• For instance in those circumstances, ensuring access to non-replicable parts of the networks
can be key to maintain sustainable competition.
For the protection of end-users, is there a political objective to review sector-specific
rules for telecom services beyond a mere technical analysis of overlap with general
• The objective of the revision of sector-specific end-user rights is two-fold. First, in REFIT
we are screening the scope for deregulation or adaptation either by concluding redundancy or
recourse to horizontal consumer protection legislation.
• Second, we aim at achieving a level regulatory playing field between traditional electronic
communications services and functionally substitutable communications services provided
by online service providers (OTTs), in order to close gaps in the protection of end-users and
foster fair competition.
Which rights of users of communication services are insufficiently guaranteed by
general rules and therefore need sector-specific rules? Does that also apply in case
communication services are supplied by OTT players?
• Our current assessment is that the level playing field and focused end-user protection is
probably best achieved by a targeted mix of deregulation and application of a key, but
limited, set of sector-specific rules to OTT communication services.
• While the scope for deregulation is the subject of ongoing assessment, we have identified
certain areas where leaner provisions may be warranted.
• For instance we are now considering that provisions on contractual information and
transparency could potentially be limited to Internet Access Services only.
• Furthermore, we aim at adapting the scope of beneficiaries to the objectives of the relevant
provisions in the Universal Service Directive. The experience shown that the level of
protection needed by (larger) business users is not the same as that of individual consumers
and of small and micro enterprises.
• Sector-specific rules for communication services appear necessary in areas where these
services make use of public resources such as numbers in the national numbering plan.
Therefore provisions on number portability, access to numbers or emergency calls appear
still necessary. Also provisions on security and confidentiality of communications appear
necessary for public policy reasons. It may be appropriate to apply those latter provisions
also to OTT communications services.
Is it necessary and feasible to overhaul the structure of rules, for instance by
distinguishing between digital communication services (whether provided by telcos or
OTTs) and communication networks?
• Innovative online services ("over the top ('OTT') services") are increasingly relevant for the
electronic communications sector and perform a competitive constraint for traditional
electronic communications providers (e.g. VoIP and IP based-messaging make inroads into
traditional revenue streams such as voice and SMS). At the same time these novel services
also boost demand for the provision of data services.
• The level playing field means different things to different stakeholders and the discussion
often lacks clarity. If there is understanding that similar rules should apply to equivalent
services it is a prerequisite to assess when different services are equivalent.
• Sector-specific rules for Internet Access Services are generally accepted – what needs to be
agreed is the exact scope of rights and obligations.
• The question of equivalence when communications services are provided in addition to or
over the Internet Access is more complex.
• It is widely accepted that using public resources is subject to a number of conditions. If the
provision of a service depends on the use of a public resource, such as numbers, in order to
ensure end-to-end connectivity there may be good, if not necessary reasons, to treat the
service differently from a service which is provided on a best effort basis without using such
• We acknowledge, however, that there are also public policy interest which may eventually
require applying certain regulatory obligations to all communications services regardless of
the mode of provision or whether they use public resources or not. The security as well as the
confidentiality of communications are examples of such public interests.
Connectivity and Investment
Why do we need very high capacity networks (high speed up & down, low latency, etc)?
• Very high capacity networks are the best way to address durably all our future connectivity
• Our connectivity needs increase continuously, including away from home and work. The
Internet of Things, cloud computing, the data economy, the abundance of content and the
increasing number of devices and connected objects - from fridges to cars - are expected to
accelerate this trend. The availability of bandwidth and the ease of upgrading networks will
be a key enabler for the vibrant digital economy and society.
• It is not only downloading speed that is important, but also other connectivity parameters
which are key to the quality of experience: upload speed for cloud-based services, latency for
safety related applications, financial transactions and gaming.
• Very high capacity networks are also needed to deal with the explosion of generated data in
almost all aspects of our society and economy, which needs to be transported in broadband
networks. Very high capacity networks therefore are also about delivering quality parameters
such as higher upload speed and lower latency.
• Very high capacity networks will contribute to the backhaul needs for the upcoming 5G
• The deployment of very high capacity networks will also gradually impact on demand for
connectivity, in particular by making the young generation used to unconstrained bi-
directional connectivity at school.
Why do you define ambitions beyond 2020?
• We do very much care about present connectivity needs and we have put in place a number
of tools to help speeding up the deployment of high speed broadband.
• Our European objectives for 2020 were set up by the Digital Agenda for Europe. In a number
of cases, the means to reach them are detailed at Member States' level in some "NGN plans".
But given the time horizon for infrastructure investment as well as the extremely high pace at
which our digital uses and needs are changing, 2020 is tomorrow and there is a necessity to
anticipate and already look at the day after, beyond 2020.
• Predicting the future is always a very difficult task, but it is clear that data flows are growing
exponentially and we will need faster, more robust, symmetrical broadband infrastructure. I
hear many calls from companies (both users and builders of connectivity), from citizens and
from public authorities for setting up connectivity ambitions beyond 2020. The Gigabit
society is a vision which invites Europeans to federate around an ambitious goal and to join
forces to achieve it.
• We cannot wait until 2020 to think about which connectivity we need beyond 2020. It is
already today that we need to be more ambitious and act accordingly. This is important for
everybody, for all EU Member States, for any sector of the economy. This is particularly
relevant for businesses and industry. Europe's future economic success will stem from
innovations and new business models that will make the most of digital networks – not just
telecom infrastructure, but also cloud computing, Big Data, connected cars, the digitalisation
of our industry, and so on.
Why do you think that Gigabit connectivity for socio-economic drivers is needed?
• Gigabit connectivity for socio-economic drivers would cover all European schools, libraries,
public administration, hospitals and health centres, research centres, business parks and key
businesses and industries. This is about ensuring that our education system turns young
internet users of today to digitally skilled adults of tomorrow, about improving our access to
healthcare at better quality and at lower cost, about supporting our research and innovation,
about boosting our economy through collaboration and innovation, and so on. I simply
cannot imagine that institutions that can achieve such impact in society are not equipped with
the best Internet connectivity.
• Gigabit connectivity is not only about a better experience for consuming digital content, it is
about innovative and interactive use: Gigabit download speed implies by default that other
quality parameters such as higher upload speed and lower latency are covered to the expected
• It is a practical step towards a truly digital economy and society enabled by unconstrained
connectivity. It will facilitate the deployment of networks beyond the socio-economic drivers
themselves, bringing high-performance connectivity closer to interested companies, in
particular SMEs, and households, including in rural areas. It will support cloud adoption, in
particular by SMEs, facilitate opportunities linked to Big Data and high performance
computing and contribute to the backhaul needs for the upcoming 5G deployments. It will
also impact on demand for connectivity, in particular by making the young generation used
to unconstrained connectivity at school.
Why do you think that future-friendly ubiquitous connectivity is needed?
• As our economy and society become dependent on connectivity, users and objects "on the
move" cannot be disconnected. I am thinking for instance about users commuting every day
to work. I am thinking also about the future of our automotive industry, that is to say
automatic driving and the connected cars.
• It is also relevant for users who chose for mobile connectivity as primary – if not exclusive –
use, especially in parts of Europe where fixed connectivity improves slowly.
• So it is clear that we cannot focus our efforts only on fixed connectivity and we do need
future-proof ubiquitous connectivity.
What do you mean by improved connectivity in rural areas?
• I am the Commissioner for the digital economy and society, not for the digital divide. I do
not want to leave anyone behind. But because investing in broadband networks in rural areas
is much less profitable than investing in cities, the digital divide will persist if public
authorities do nothing about it. Because they are often far away from services such as
healthcare, shopping, banking or public administration, those living in rural areas need even
more than those living in cities to access e-health, e-commerce, e-banking or e-government
services. Rural livelihoods will also rely increasingly on digital markets, trading, the use of
new technologies (like drones or robots). So I want connectivity in rural areas to be high on
the political agenda of Europe.
How do you plan to reach your ambition?
• The recipe for success includes 4 ingredients: policy, regulation, funding and support.
• We need a political impetus and that is what I am aiming at with my vision for a European
Gigabit society. I want to give a clear vision and a clear direction.
• We need an investment friendly regulatory environment. We have regulatory tools. In
particular our future telecom regulatory environment – we will make legislative proposals
later this year - will encourage investment in sustainable, market-based, high-performance
broadband (fixed and wireless) infrastructures.
• Where the market cannot deliver on its own, we need public funding. We have funding tools.
In particular I want a fair share of President Juncker's Investment plan to be injected in the
• We need support to our ambition through cooperation and technical assistance. Nobody can
make it a reality on his or her own; this has to be a joint effort. But we are now well into the
21st century and we need connectivity just as we need water and electricity. I cannot imagine
anymore that anyone wishing the best for our European society and economy would say
We have not seen many EFSI projects in the digital sector so far: how can we ensure
the sector will benefit from EFSI?
• So far, there have been 8 projects in the research and ICT sector approved under EFSI
Infrastructure and Innovation Window, as well as a substantial portion of the SME Window
dedicated to innovative SMEs and start-ups.
• We definitely expect more will be invested, especially in digital infrastructure and digital
facilities such as cloud facilities, high performance computing, research in 5G that will
require long term financing. There are already very good high speed broadband projects
approved under EFSI in France and in Italy, we expect to see more projects of this type
• I would also expect the ICT sector to be one of the main beneficiaries of the creation of
investment platforms under EFSI, which allow bundling of smaller projects together.
Funding required is usually smaller in the ICT sector which is quite fragmented. For
example, we are currently developing a investment fund for broadband under the Connecting
Europe Facility, which is considered a forerunner of Investment Platforms, with the aim to
provide financing for the roll-out of super-fast broadband predominantly in underserved
areas. The Fund could be further expanded with EFSI support
5G action plan
Do you share our view that the Telecom Review should put increased emphasis on
• Overall I fully share your view that the Telecom review should put increased emphasis on
investment. The Digital Single Market Strategy announced that the review of the Telecom
Framework's focus would include "incentivising investment in high speed broadband
networks". Let me however bring a few clarifications, related to the manifesto, on how this
should be done:
First, this cannot and will not be done at the expense of competition.
Second, co-investment and risk-sharing models allowing for a fair long-term return
on investments will be encouraged under precise conditions
Third, I agree that commercial agreements are important, but provided that a
regulatory fall back solution is kept
• Let me reassure you that we are working on a number of measures aiming at incentivising
investment in very high-capacity networks and 5G under the Telecom Framework. I
appreciate your views as they will nurture our reflection in finalising our proposal, which is
to be adopted in September.
Are the Net Neutrality draft guidelines too restrictive and will they stifle innovation and
hamper the development of 5G?
• The draft guidelines provide interpretative guidance on the application of the rules, stay close
to the flexible principles of the Regulation and do not go beyond the TSM Regulation.
• In particular the deployment of 5G services, the development of Machine to Machine and
Internet of Things are perfectly compatible with the Regulation and the draft guidelines.
• If any specific service, for instance connected cars, requires a level of quality that cannot be
guaranteed by the Internet Access service, quality assurance can be provided via specialised
• And when it comes to the internet access service, the Regulation is also very clear that
reasonable traffic management is possible based on objective technical requirements of the
What has the Commission done so far? Does Europe have the technology to deliver 5G
• The 5G Public Private Partnership between the Commission and the telecom industry is
boosting EU-wide work with its unprecedented 700 million euros funding.
• Europe has achieved a true leadership in this initial research phase of the run-up to 5G. This
reminds us of the historic days of the GSM technology and is, in my view, another signal that
"Europe is back" in the forefront of telecommunications
Vectoring in Germany
BNetzA's revised proposals – What has changed between May and June?
In May the Commission set out why it had serious doubts that BNetzA's original proposal
was in compliance with EU telecoms rules (see further DE/2016/1854).
In particular, the Commission raised four main areas of concern (see below). In the
discussions with BNetzA that followed the Commission's opening of an in-depth
investigation, BNetzA agreed to address the vast majority of the Commission's concerns and
revised its proposals accordingly.
The revised plans constitute a clear improvement if compared with the earlier proposals, on
each of the points raised in the Commission's serious doubts letter. The following table
illustrates the changes that have been made in response to the Commission's intervention:
The first alternative access
Any such limitation cannot
No restriction of number EC
product (virtual access at the
be technically justified and
of access seekers at street
street cabinet) is limited to one
unduly restricts competition
Alternative operators, who wish Parallel fibre investment
Access to ducts and dark EC
to migrate to the street cabinet may not be economically
fibre granted for two years
have to invest in their own fibre.
to those alternative
operators currently present
at the local exchange and
wishing to use virtual
access at the street cabinet.
The second (and possibly main)
Any alternative access
Commitment that the
alternative access product (Layer-
product, which is intended to
Layer-2 product needs to
2 access at the so-called
compensate for the loss of
meet the required technical
Broadband Network Gateways,
physical unbundling needs
parameters. The exact
BNGs) is, in BNetzA's own view,
to be an appropriate
technical details will be
not (yet) a functional equivalent
functional substitute for
notified within few
to physical unbundling due to
physical unbundling and
months; a new national
technical restrictions in the
comply with the
consultation is envisaged.
The Commission will
criteria set out in the 2014
afterwards scrutinise these
detailed proposals against
its own Recommendations.
and prices for
The eligibility criteria
The stringent eligibility Eligibility criteria have
which an operator can "claim" a
criteria unduly favour DT been re-designed to allow
Nahbereich are designed in a way
and lead to a quasi-
more alternative operators
But is critical
that means that DT is likely able
to claim Nahbereiche (over
of the new
to vector significantly over 90%
30% increase in
Nahbereiche, which can be
vectored by alternative
operators). However, new
proposal also introduces
requirement, which may
lead to certain operators
not being able to make use
¾ On the Layer-2 product, BNetzA agreed to cooperate with the Commission and industry to
ensure an adequate solution is found, which safeguards competition. It agreed to notify to the
Commission any final product design. The Commission will assess such a notification in
detail and act according to its findings to ensure that the Layer-2 BNG product meets all
relevant criteria to qualify as an appropriate functional equivalent to the loss of physical
BNetzA's final measure of 1 September – brief initial assessment (not to be shared publicly)
¾ On 1 September, BNetzA published its final decision in case DE/2016/1876, following our
comments letter of 19 July.
¾ Under the regulatory framework, BNetzA is under an obligation to take utmost account of our
¾ We still need to assess thoroughly, whether BNetzA honoured its obligation , but a few initial
observations at this stage:
Characteristics of the alternative BNG Layer-2 access product
¾ In its comments letter, the Commission set out a number of criteria it expects BNetzA to take
into account when developing the technical parameters for the new BNG Layer-2 access
¾ It has to be noted that such technical details will be subject of a new (forthcoming)
notification, which we expect in the near future.
¾ In its final decision BNetzA clarified that it is of the view that the forthcoming BNG Layer-2
product, the technical details of which are currently in national consultation and will be
notified to the Commission in the near future) will meet largely ("weitgehend") the guidance
of the Commission.
Market definition / re-classification of the BNG Layer-2 access product
¾ The Commission asked BNetzA to consider a re-classification of the BNG Layer-2 access
product as potentially being located in the local access market as a substitute to physical
¾ BNetzA confirmed that it will look at the classification of all relevant products anew when
carrying out the next market review (although it repeated its arguments why it currently thinks
the Layer-2 product is a central and not a local access product).
Criteria for vectoring deployment (Alles-oder-nichts criteria)
¾ The Commission invited BNetzA to reconsider the need to introduce a requirement that
alternative operators who wish to vector a street cabinet themselves will have to commit to
deploy VDSL2 vectoring to all street cabinets connected to the same exchange (all-or-nothing
¾ In its decision, BNetzA continues to apply this requirement arguing that only such and
approach would avoid "cherry-picking" and ensure nationwide vectoring deployment.
Access to ducts
¾ The Commission urged BNetzA to impose on DT a duct access obligation which is not
limited to the distance between the local exchange and the street cabinet, nor limited to the
sole purpose of taking up DT's wholesale products.
¾ Mainly for legal reasons, BNetzA remains of the view that duct access should only be granted
to gain access to take up DT's KVz-VULA product, i.e. which is limited to the distance
between the exchange and the street cabinet.
Why did the Commission not address the detailed technical specifications for the main
alternative access product?
¾ The Commission is constraint in its response by the formal scope of the notification. This
scope is determined by the notifying regulator.
¾ In this case, BNetzA has not made the technical specifications of the main alternative access
product (Layer-2 access product) part of the current notification but stated that these will be
subject of a later notification, which the Commission expects to receive after the summer
¾ As a result, whilst the Commission recognises that the exact technical specifications the
Commission play an important role for the adequacy of the alternative access solution, it
Our work on the review of the Telecommunications Regulatory Framework
The public consultation on the evaluation and the review of the regulatory framework for
electronic communications networks and services ended on 7 December 2015. 244
contributions were received online and around 30 contributions through other sources. A wide
array of stakeholder groups replied, with the majority of contributions coming from the
telecom players. Wider digital economy and traditional non-telco industry players were also
active. On 20 April 2016, the synopsis report of the consultation was published on the DSM
Policy options/issues in the review
We consider that the framework review should pursue one overall regulatory objective,
articulated in terms of outcomes: widespread access to and take-up of very high-performance
connectivity. It would be made clear, that the current three policy objectives i.e. promotion of
competition, of the internal market, and of citizen interests, as well as the regulatory
principles relative to investment and innovation, are at the service of this overriding objective.
Our future proposals on network access will aim at responding to the objective of the DSM
strategy to incentivise investment in very high-capacity broadband networks and to the overall
ambition to enhance connectivity, while maintaining a pro-competitive approach. To this end
we are working on a set of measures which provide necessary safeguards for access-based
competition, while limiting regulation to what is necessary and increasing incentives for
incumbents and alternatives to roll out very high-capacity networks and (where feasible)
To address the investment challenge we would start from the existing premise that
competition is the main driver for investments. Market analysis and appropriate remedies,
would remain central tools. However, more emphasis should be put on regulatory models that
give sufficient space to competition to invest rather than focusing primarily on ensuring
To achieve this we are considering a set of measures which aim for (1) the simplification and
geographic focus of access regulation, (2) Value the well-designed access programmes to the
civil infrastructure (ducts, poles, etc.), (3) Improving the investment environment for very
high-performance networks of SMP operators (4) Clarifying regulatory treatment of
wholesale-only models (5) The legal regime on symmetric access to non-replicable assets
could be clarified and (6) To enhance competition in the provision of cross-border business
To equip the NRAs with sufficient tools to address the connectivity challenge, in particular in
rural areas, the competences and tasks of independent regulators may need to be reinforced,
e.g. as regards the powers of NRAs to map broadband investment plans across their national
Spectrum is a core enabler for the deployment and development of current and next
generation mobile and fixed wireless networks (e.g. 5G). In addition to affecting deployment,
the manner in which spectrum is assigned and the conditions attached to spectrum assignment
and usage, are also major determinants of mobile competition, which in turn influence quality
of service, prices, speed of roll-out and take-up of mobile broadband. At the same time, fixed-
mobile and telecommunications-broadcasting convergence are blurring the distinction
between traditional telecommunications markets, which will lead to significant change in the
nature of competition for products and services.
The Framework review will be a major building block of the 5G strategy. The objective is to
have spectrum rules fit for 5G success and for supporting efficient investments, thereby
contributing to the overall objective of deployment of very high-capacity networks throughout
Europe. Our proposals would focus on (1) a more efficient timing between allocation and
assignment; (2) predictability and consistency for market investors in the next generation of
wireless broadband networks regarding the main conditions for assigning or renewing
national spectrum rights of use and (3) regulatory clarity on additional needs for 5G beyond
Regardless of the question as to what extent the above-mentioned issues should be dealt with
exclusively at the national level or co-ordinated at the EU level, it is clear that all of them
have a direct impact on the market functioning at the national level and would benefit from
greater consistency. Therefore we are reflecting on the right balance of competences between
various national authorities, including the role of NRAs acknowledging that, at present, all of
them do not have competences in spectrum matters, and on the appropriate setting in which
such peers can contribute at EU level alongside the Commission to general policy guidance
and to peer-review of specific national proposals, so that the market knowledge is
appropriately taken into account in establishing national award procedures, conditions for
renewals and main conditions attached to spectrum usage rights.
The objective of revised sector-specific end-user rights is two-fold. First, in REFIT we are
screening the scope for deregulation or adaptation either by concluding redundancy or
recourse to horizontal consumer protection legislation. Second, in order to close gaps in the
protection of end-users and foster fair competition we aim at addressing a level regulatory
playing field between traditional electronic communications services and functionally
substitutable communications services provided by online service providers (OTTs).
While the scope for deregulation is the subject of ongoing assessment, we have identified
certain areas where leaner provisions may be warranted. For instance, the provisions on
contractual information and transparency could potentially be limited to IAS only; horizontal
rules on alternative dispute resolution and online dispute resolution may have made sector-
specific rules redundant. Furthermore, we aim at adapting the scope of beneficiaries to the
objectives of the relevant provisions in the Universal Service Directive. The experience and
feedback in applying the current framework has shown that the level of protection needed by
(larger) business users is not the same as that of individual consumers and of small and micro
As regards the level playing field discussion, sector-specific rules for Internet Access Services
(IAS) are largely accepted; divergences exist rather regarding the exact scope of rights and
obligations. The question of equivalence when communications services are provided in
addition to (or over) Internet Access is more complex. If the provision of a service is tightly
linked to network operation and is dependent on and benefits from the use of a public
resource, such as numbers, in order to ensure interoperability and end-to-end connectivity via
the network, such a service may not be in all respects comparable to a service which is
provided on a best effort basis without recourse to such a public resource.
It may thus be opportune, for the purposes of further discussion, to reflect on a possible
distinction between (1) rules applicable only to communications networks, and to
communications services that include provision of connection to the network as a key feature
of the service, and which may use public resources to this effect, and (2) a subset of rules also
applicable, according to need, to other communications services. Services that could be
considered to provide a connection to the network could include POTS telephony, IAS
provision, provision of managed services, or provision of any other services using public
numbers (in or out).
We are also examining to modernise the universal service regime by removing old services
from the scope. These old services, like public payphones, comprehensive directories and
directory enquiry services, may have become redundant since the market offers competitive
We consider that an adequate and efficient institutional set-up is key to ensuring a positive
outcome for the overall regulatory framework, and also that an efficient EU system of
regulatory authorities is critical for the "connectivity" based digital single market. NRAs and
BEREC have been, and should continue to be, at the core of the telecoms regulatory system.
A critical aspect of the governance system is the distribution of competences amongst the
different institutional stakeholders (at national level: independent NRAs and other national
authorities; at EU level: BEREC, RSPG, Commission…). Another critical aspect is how to
efficiently ensure the independence of NRAs, including that they should be adequately
resourced to perform their core tasks and to fully participate in BEREC.
In view of market and technological developments, there are areas of pan-European relevance
where BEREC could play a (greater) role, such as coordinating the mapping of network
infrastructures, monitoring the quality of Internet services or the conditions for provision of
cross-border business services, monitoring the development of wider markets for
communications platforms or services, and developing as appropriate technical guidance or
prerequisite preliminary specifications for standardisation. In co-responsibility with the
Commission, BEREC could play a stronger role as repository of regulatory experience.
Vectoring in Germany:
What is vectoring?
Vectoring technology can upgrade copper networks to bring higher broadband speeds and is
used as an intermediary upgrade technology instead of the deployment of optic fibre networks.
Vectoring technology can upgrade copper networks to bring higher broadband speeds in
conjunction with the deployment of optical fibre in networks as far as the street cabinet. It is
estimated that BNetzA's proposal would lead to broadband speed gains across Germany
bringing connection speeds above 50 Mbit/s to 1.4 million households for the first time.
However, the technology currently only works when it is applied to an entire bundle of copper
cables leading from the cabinet to households and, thus has the potential to restrict competition
by excluding competitive unbundling of such lines.
What are the advantages of vectoring – and what are the disadvantages?
It is estimated that BNetzA's proposal would lead to broadband speed gains across Germany
bringing connection speeds above 50 Mbit/s to 1.4 million households for the first time.
However, the technology currently only works when it is applied to an entire bundle of copper
cables and, thus, has the potential to restrict competition.
Today's decision aims at ensuring that the introduction of nearshore vectoring in Germany is
accompanied by adequate safeguards restricting the negative effects vectoring can have on the
position of alternative operators.
Short update on development in Germany before notification
In 2015 DT applied to BNetzA to upgrade street cabinets in the so-called nearshore
") to deploy vectoring technology. This would, however, no longer be
compatible with the unbundling of the VDSL line at the exchange, i.e. would mean the
loss of VDSL LLU.
In 2013 BNetzA already allowed operators to deploy vectoring outside the Nahbereich
(since the effects on the loss of LLU were limited there) – the Vectoring I decision.
BNetzA used a first-come-first-served approach (Windhundrennen)
alternative operators, too, were able to benefit from the ability to vector a street cabinet.
At the time the decision was to require the operator that vectors street cabinets to
provide a Layer-3 Bitstream access product as an interim solution and a Layer-2 VULA
product by the end of 2015. However, the latter deadline has recently been extended to
July 2016 since provision of the necessary Layer-2 product has been delayed.
With the goals of the Digital Agenda in mind, the Commission, in principle, welcomes
the development and deployment of speed enhancing technologies. In this context the
Commission so far recognised that vectoring allows for greater speeds not only for the
incumbent but also for alternative operators. However, in light of the apparent conflict
of vectoring with the ability to physically unbundle the vectored line, the Commission
repeatedly stressed that a virtual access solution (VULA), should mimic as much as
possible the quality and functionality of an unbundled line, thus being able to act as an
appropriate substitute for SLU/LLU.
In this respect, the Commission has set out clear guidance to NRAs in its 2014
Recommendation on Relevant Markets, which product characteristics a VULA product
should display in order to be considered a functional substitute for full physical
In 2015, BNetzA required DT to work on an offer of a Layer-2 Bitstream product to be
provided at ca. 900 regional hand-over points (BNGs or border network gateways). This
product is still under development, and a decision approving it (approval of the
Reference offer) is expected in the future. BNetzA committed to closely cooperate with
the Commission to ensure that the Layer-2 Bitstream product meet the criteria set out by
the Commission, and be an adequate and appropriate substitute product for lost VDSL
Recent cases: DE/2016/1854 (withdrawn) and re-notified case (DE/2016/1876 – closed with
BNetzA notified for the first time its decision on near-shore vectoring on 7 April 2016,
which - in view of the Commission's serious doubts (sent on 10 May 2016) - BNetzA
withdrew in early June. The Commission serious doubts were focused on these main
¾ Relatively small net-effect of 1.4 million households receiving broadband
speeds of above 50 Mbit/s; alternative rollout scenarios were not sufficiently
taken into account;
¾ Very strict criteria for alternative operators to qualify for own-vectoring (at
least 50% of street cabinets in a given area should be connected with DSL,
more than 90% of the street cabinet were to be vectored by DT);
¾ Limitation of the number of alternative operators who could request an
alternative product at the street cabinet (maximum 1 operator);
¾ Access to dark fibre only subsidiary (only when no access to ducts is possible);
¾ Lack of clarity as to the characteristics of the substitute Layer 2 virtual access
On 20 June BNetzA then re-notified improved plans taking account of some of the
Commission's initial concerns.
The new proposals introduced some necessary competitive safeguards, which were
required by the Commission to ensure an appropriate balance between gains in network
performance and continued effective competition from alternative operators, both of which
benefit internet users.
The Commission largely accepted these revised plans. In our view the revised proposals
now provide adequate competitive safeguards and restrict the negative effects vectoring
deployment can have on the position of alternative operators in Germany. For example,
BNetzA proposes to remove the restriction on the number of access seekers at street
cabinet, and intends to grant access to ducts and dark fibre for two years to those
alternative operators currently present at the local exchange and wishing to use virtual
access at the street cabinet. In addition, the increased ability of alternative operators to
deploy vectoring themselves, together with BNetzA's commitment to enhance the broader
technical parameters of the two alternative access products led the Commission to endorse
the overall proposal.
However, the Commission also warned BNetzA that it must improve the technical means
through which alternative operators can provide internet access over DT's
Since the use of vectoring in the areas of 550m around a local exchange is not compatible
with alternative operators being able access the physical infrastructure linking customers'
premises to the local exchange (also known as local unbundling) at VDSL quality, the
Commission requires BNetzA to ensure that competitors have an adequate and alternative
means of offering internet access to customers.
In this respect, the Commission has called upon BNetzA to improve their plans concerning
the technical specifications for the main replacement product (a Layer-2 virtual access
product) and notify them to the Commission. The Commission will then assess these
proposals against the guidance in the Explanatory Note to the Commission's 2014
Recommendation on Relevant Markets and the more detailed expectations expressed in
In addition, the Commission also set out that it expects BNetzA to submit to the
Commission further plans concerning prices for the relevant access product.
The Commission will then assess these new proposals against its previous guidance and
the expectations it has set out in its decision today.
Currently, the Vodafone Germany's network serves both prepaid and postpaid customers on
GSM and UMTS (with HSDPA). In December 2010, Vodafone started providing LTE (Long
Term Evolution) services.
In February 2011, Vodafone Germany started with IPTV via DSL and VDSL connection. In
April 2011, Vodafone Germany started to contribute a lot of Disney content via IPTV.
At the end of 2010, Vodafone had 36.676 million customers with mobile phone or mobile
internet contract and 3.945 million customers with a DSL / VDSL connection.
Following T-Mobile, Vodafone Germany started selling the Apple iPhone 4S in September
German headquarters in Düsseldorf
CEO for Germany: Dr Hannes Ametsreiter
Germany: approximately 9,000 employees
Vodafone Group – company profile
• Vodafone is a public company listed in London, NYSE and Nasdaq; only the investment
fund Black Rock holds shares above 5% (6,9%)
• It is present in 25 countries across the world, plus 65 partner networks (in EU is present
in Albania, CZ, DE, EL, HU, IE, IT, MT, NL, PT, RO, ES, UK)
• 434 million mobile customers and 9 million fixed customers
• Financial overview (2013, from 2014 Annual Report):
43,6 bn £ revenues (-1.9%), approximately 2/3 in Europe
EBITDA 29,4% (-1.1pp)
Adjusted operating profit 7,9bn £ (-37.4%, due mainly to the sale of Verizon)
Capital expenditure 7,1bn £ (+13.3%)
• In February 2014 it completed its 45% participation in Verizon Wireless to Verison for
• In October 2013 it acquired the largest German cable operator Kabel Deutschland for
In March 2014 it announced its intention to acquire the Spain's largest cable operator Ono for