There are numerous competing companies when it comes to fiber optic expansion. It is encouraging that the expansion is gaining momentum, but sometimes absurd situations arise when existing fiber optic networks are built over with the same technology, while bandwidths of 30 or 100 Mbit/s are not even achieved elsewhere. In addition, every time the street is torn up again to lay a new cable where fiber optics are already in place. The so-called open access rule, which has been mandatory for subsidized expansion since the start of the federal broadband subsidy program (Weiße-Flecken-Programm), can counteract this.
In simple terms, open access means that infrastructure providers who own a fiber optic network offer all other providers access to their network – without discrimination and at market-negotiated conditions. In principle, a distinction must be made between physically unbundled and virtually unbundled access. This should not only prevent monopolies, but also avoid overbuilding. Competition gives users a greater choice of products from different providers, which usually also leads to lower prices.
As both the exact technical provisions for new access and the pricing conditions have not yet been conclusively defined, some voices are calling for regulatory intervention by the state. Others, however, argue that it is the entrepreneurial freedom of companies that needs to be protected.
Further steps announced for 2023
It is important that the motivation of all those involved in the fiber optic expansion remains high. After all, this technology forms the backbone of the digital infrastructure in Germany. The German government’s goal was formulated in the digital strategy and is to connect a total of 50% of households and companies in Germany to the Internet with fiber optic connections by 2025. By 2030, there should even be nationwide coverage with fiber optic connections to the home. Many providers are currently investing in the expansion in the knowledge that this infrastructure will be or remain lucrative in the long term. Of course, the federal government does not want to put the brakes on this. However, overbuilding does not make economic sense. This could result in permanent construction sites and a high burden for citizens. In addition, already scarce resources are being invested in overbuilding, whereas they would be much more urgently needed in underserved areas.
This can prevent open access and is therefore the subject of heated debate in the industry. The gigabit strategy formulates the open access principle as a target, but there is still no regulatory framework. Although the market players have so far committed to the principle, not all of them are adhering to it consistently. In some cases, bitstream access is only offered at a very high price, making it worthwhile for third-party providers to expand their own networks. The Federal Network Agency and the BMDV are driving the issue forward and motivating the industry to find solutions together. To this end, the Gigabit Forum is currently taking stock of open access in the market and discussing possible contractual elements. The Gigabit Forum is a platform founded by the BNetzA on which market players and associations meet at regular intervals and agree on common principles, positions and standards. The status report is scheduled to be published in the second quarter of 2023.
Furthermore, open access can only be made possible if there are common standards and defined interfaces. The purchase and sale of wholesale products must also be regulated. This is why the Gigabit Forum has set up the Interfaces & Processes working group. This is where the future interface architecture for the fiber optic world is being developed. The first specifications are expected to be published in the first quarter of 2023.
For and again
The superstructure is often criticized and usually rightly so. Arguments are then made that a new electricity cable or gas pipeline is not laid every week. However, it is important to know that telecommunications structures in Germany are subject to infrastructure competition. This is intended to increase the incentive for expansion. However, it is therefore not forbidden to lay your own networks, even if other network infrastructures already exist or are under construction. To this end, market players are required to make honest expansion announcements and to act in the interests of all in accordance with the “expansion before superstructure” rule. It is in the interests of citizens to first expand nationwide before creating competing networks. After all, an efficient broadband supply is the basis for digital participation and services of general interest. What could help here are increased incentives for cooperation. For this to succeed, the open access principle must be more firmly anchored. This is already increasingly being achieved voluntarily through cooperation, so there is a need to discuss whether explicit regulation is required. Open access has been proven to increase the utilization of the networks and thus amortize the investment more quickly.
In order to regulate the discussion transparently, at least in the subsidized broadband areas, there is currently a draft from the Federal Network Agency to clarify principles on the type, scope and conditions of open network access in subsidized areas. This is intended to ensure investment security for telecommunication companies that are expanding and to show all other interested parties the possibilities of clearly regulated network access in subsidized broadband expansion. All interested parties have until January 31, 2023 to submit written comments on the draft.
Further information on Open Access and the application of Open Access conditions in funded expansion can be found here.