Copper-to-Fiber Migration: "Two Big Catches"

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The transition from the old copper access network of Telekom to modern fiber optics remains a hot topic. After the Federal Network Agency finally presented its concept on Monday on how it intends to regulatorily accompany this infrastructure project, the EU is adding momentum with its Digital Networks Act presented on Wednesday. If it's up to the EU Commission, Europe will be largely copper-free by 2035.

Before this vision of Brussels bureaucracy can become reality, a lot of fiber still needs to be buried in Germany. The most contentious issue in the industry at the moment is the question of how the shutdown of copper access networks, which are largely under the control of Deutsche Telekom. The conversion of entire access areas to fiber optics should be accomplished.

Regulatory Concept of the Federal Network Agency

The Federal Network Agency has now at least outlined how the whole process could proceed from a regulatory authority's perspective. If fiber optics are already available in 80 percent of households in an area, either in apartments or single-family homes, and the fiber optic provider also grants competitors access to its network through suitable access services. Then it can be shut down after three years. The regulator advocates for a "rule-based procedure" – meaning equal rules for everyone.

"The Federal Network Agency has presented concrete specifications, timelines, and migration conditions that could enable a fair, transparent, and competition-compliant change process," summarizes Frederic Ufer, Managing Director of the Association of Providers in the Telecommunications Market (VATM). "The fundamental direction with freedom of choice, diversity of services on the networks, open access, and investment security is correct."

Basically, all of Telekom's competitors see it this way, but they do find one or two flies in the ointment. Or as the Federal Association for Broadband Communication (Breko) puts it: "Two big catches." The association considers the 80 percent quota, along with the timeframe, to be unrealistic – especially since the EU has now also stepped in and wants the migration completed by 2035.

"Such a condition would delay the technological change in most areas of Germany by many years," says Breko CEO Stephan Albers. The broadband association ANGA also sees room for discussion regarding the proposed quota: "The devil is in the details here."

No Regulation at All

Regarding the second "catch," the associations become more explicit. The Federal Network Agency proposes to transfer the regulatory regime of the old telephone connections to the new fiber optic networks. This is because there will be access areas where a single fiber optic provider builds, as duplicate infrastructures are not profitable and TV cable networks are not available.

In such cases, the Federal Network Agency wants to maintain the proven regulatory regime and be able to force the respective regional monopolist to grant other providers standardized access to the network. However, the competitors, who have fought for strict regulations for Telekom for decades, now strictly reject this for their own networks.

"Fundamentally wrong," says the VATM CEO. The numerous voluntary cooperations are proof that open access works. "The TKG already offers the Federal Network Agency the possibility to intervene against a refusal of access," emphasizes Ufer. "This system should not be fundamentally changed without compelling reason."

"In times of declining investment figures among competitors, this is a disastrous signal," also emphasizes the broadband association ANGA. "And this in a market that shows that open access works – numerous cooperations based on voluntary agreements impressively prove this."

"Such regulation would not do justice to the regionally very different framework conditions in fiber optic expansion and would diminish the attractiveness of investments in further expansion," cautions Breko CEO Albers. "Effective open access is already possible now, as the steadily increasing number of cooperation agreements shows."

Telekom Wants to Talk About Cable Networks

Regarding potential regional monopolies, Telekom emphasizes that competition should decide, not a "forced change of provider." However, cable networks must also be discussed. "If we want an honest debate about copper-to-fiber migration, then the TV cable must be part of this discussion," emphasized German CEO Rodrigo Diehl on Thursday at Telekom's "Netzeltag" in Berlin.

At the same time, Diehl expressed disappointment at the fierce attacks from competitors. "We need to find more common ground," said the German CEO. Telekom is also in no hurry: current law contradicts some of the measures proposed by the Federal Network Agency. The legislator and the EU still have a say – so the debate is likely to continue for a while. Not least, the question remains who pays for all this.

However, the Federal Network Agency should not wait too long and should already draw up the proposed migration plan, believes VATM CEO Ufer. The current legal framework also allows for this: "The Federal Network Agency must not fall back on the provisions of the Digital Networks Act, which will come into force at the earliest in 2027, but must now tighten the reins on Telekom."

(vbr)