EU’s Gigabit Infrastructure Act jeopardises German fibre roll-out
13.09.2023
Berlin/Brussels, 15/09/2023 If implemented in its current version, the Gigabit Infrastructure Act (GIA) would incentivise the strategic duplication of fibre networks and thus jeopardise the German government’s fibre roll-out targets. In order to prevent this, the German Broadband Association BREKO calls on the members of the European Parliament to reject the current draft in their committee meeting on 19 September and to improve four crucial aspects. BREKO also expects the German government to join forces with other EU member states in the European Council and demand changes to the GIA.
The GIA’s explicit goal is to accelerate the roll-out of fibre and 5G in the EU. However, the draft agreed on 07.09.2023 among shadow rapporteurs in the Committee on Industry, Research and Energy (ITRE) of the European Parliament creates incentives for a strategic duplication of fibre networks, which would exacerbate the biggest challenge currently facing fibre roll-out in Germany and thus achieve the opposite of its objective. BREKO therefore calls on the MEPs in ITRE and on the German government to reject the current draft and to improve four crucial aspects of the GIA:
- The availability of virtual bitstream-access (BSA) must be accepted as a viable alternative to the shared use of physical infrastructures (duct access), as BSA is already established as the key open access product in the German market. However, the current draft only lists the provision of physical access alternatives (such as dark fibre and fibre unbundling) as a way to avoid network duplication by means of duct access. BREKO Managing Director Dr Stephan Albers: "In its current version the GIA incentivises the economically absurd duplication of fibre networks, which would destroy the business case for many regional fibre roll-out projects. If this is implemented without changes, the ambitious fibre roll-out targets for Germany and Europe become all but unachievable."
- A new and – from BREKO’s point of view – entirely unacceptable aspect of the current draft is the GIA's approach of shifting the discussion about access to physical infrastructures to the price level. The pricing criteria are vague, hardly manageable and are unlikely to allow for a sufficient ROI for the infrastructure supplier. This would result in vexatious litigation about appropriate levels of pricing, which would take years, thus creating critical uncertainty for investors. In order to still benefit from an exemption of pricing criteria under this regulation, network operators with a vertically integrated business model would de facto be forced to structurally separate their wholesale business from their retail business according to the current draft – a disproportionate consequence for companies without significant market power.
- The extensive transparency obligations for network operators provided for in the current draft of the GIA would not ensure the sharing of construction costs between companies, as assumed by the European Commission and Parliament. On the contrary, these obligations would further incentivise the strategic duplication of fibre networks: BREKO-MD Albers: "If the details of planned fibre construction works are made public three months in advance, we are downright inviting competitors to apply for coordination of construction works (co-laying) for purely tactical reasons, in order to undermine the economic viability of the original project. This obligation must be removed from the GIA in order to preserve the favourable investment climate in the fibre market."
- Furthermore, the legal form of the GIA will also determine whether it will accelerate network roll-out across Europe, or even slow it down in some member states. Given the big differences between EU member states in terms of fibre roll-out, there can be no "one size fits all" regulation. However, the current plan to implement the GIA as an EU regulation would deprive member states of any leeway to adapt its rules to their different needs. Therefore, the German government should cooperate with other EU member states in the European Council to ensure that the GIA is implemented as a directive, which would allow them to adapt certain rules to the particularities in each country.
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About BREKO:
As the leading fibre association with more than 470 member companies, Bundesverband Breitbandkommunikation e.V. (German Broadband Association, BREKO) successfully promotes competition in the broadband market. Its member companies are committed to future-proof fibre and currently implement more than half of the fibre connections to buildings and homes in Germany. The more than 240 telecommunications network operators organised in the association supply both urban and rural areas with future-proof fibre connections. In 2022 they invested a total of € 4 billion. More information at brekoverband.de/en.