German Regulator: Extend mobile radio frequencies instead of auctioning them off
The established network operators are to be allowed to continue using frequencies until 2030 and expand in the area. 1&1 is to share in the frequency cake.
(Image: Timofeev Vladimir/Shutterstock.com)
On Monday, the German Federal Network Agency published a long-awaited consultation draft on the upcoming allocation of mobile frequencies in the 800 MHz, 1.8 GHz and 2.6 GHz ranges. According to the draft, the regulatory authority wants to extend the frequency usage rights of the three established mobile network operators Deutsche Telekom, Vodafone and Telefónica (o2), which expire in 2025, by five years. In return, they are to provide around 99.5% of the area with at least 50 Mbit/s from 2030. Newcomer 1&1 is also to be given access to area frequencies. If necessary, the regulator also wants to enforce national roaming.
The requirements also include Telekom, Vodafone and Telefónica providing 99% of households in rural communities and all federal highways with 100 Mbit/s as well as all state and national highways and inland waterways with 50 Mbit/s from 2029 in every federal state. From 2030, they would also have to offer 50 MBit/s on district roads.
Newcomer 1&1 also wants a slice of the frequency pie and is pushing for the opportunity to acquire usage rights itself. The Federal Network Agency does not provide for this in its draft, but it links the extension to the obligation to grant 1&1 "cooperative shared use" of at least 2×5 MHz of spectrum "below 1 GHz". Müller explained that this requirement would be deemed to have been met if one of the providers granted the newcomer this amount of spectrum.
National roaming for 1&1
The regulator also wants to impose another negotiation requirement for national roaming in favor of the fourth network operator. In parallel, Telefónica Deutschland is to be obliged to continue the existing transfer of 2 x 10 MHz in the 2.6 GHz band for the duration of the extension at 1&1's request. If national roaming is not granted by any nationwide network operator from 2026, the Network Agency reserves the right to order a corresponding shared use option. Müller expects "that the market will find a solution". At the same time, deadlines are being set so that a decision can be made in an emergency.
In an initial statement, 1&1 was at least not dismissive. "We are open to a cooperative solution," said CEO Ralph Dommermuth on Monday afternoon. "The important thing is that we can use a sufficiently large amount of frequency at market conditions in order to adequately supply our more than 12 million customers."
The regulatory authority is thus essentially sticking to its proposal, which it already outlined in key points in September and put up for discussion. Affected companies and organizations now have until 8 July to submit their comments. Following their evaluation, the agency's three-member Presidential Chamber will then decide on the frequency allocation in the fall "in consultation" with its 32-member Advisory Board.
The regulator intends to make the extended frequency spectrum available for mobile communications at a later date together with the usage rights from the 700 MHz, 900 MHz, 1.5 GHz and 1.8 MHz ranges, which expire in 2033. This is likely to be via an auction again. However, such an auction could take place "in many different forms", Müller explained. The market would also be consulted on this. The idea is to put together as large a package as possible so that "many players can take part".
Network operators slam the proposal
The planned frequency procedure has been causing unrest for some time. In February, former Federal Constitutional Court judge Udo Di Fabio came to the conclusion in an expert opinion for 1&1 that the plan was unlawful. Researchers and consultants had previously determined on behalf of the Network Agency that no special protective measures were necessary for the newcomer. The Monopolies Commission argued that the licenses should be extended for a maximum of three years.
The Federal Cartel Office had spoken out against extending the rights of use. "The allocation of frequencies is a central and decisive factor for competition in the mobile communications sector," said Andreas Mundt, President of the Federal Cartel Office, on Monday. "It is important that any extension is accompanied by effective measures to promote competition." Müller assured that all requirements had been evaluated. There are "weighty regulatory reasons" for the path outlined.
Sharp criticism came from the German Broadband Association (Breko): With the proposal, the Federal Network Agency is giving incumbent operators "two gifts at once - without any compensation for their competitors". In addition to the extension of usage rights, the top dogs would not have to fear any unwelcome competition in the future. By continuing to "stick to the ineffective negotiation requirement", the regulator is missing the opportunity "to create effective competition in mobile telephony with the introduction of a service provider obligation ".
(olb)
