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World Telecommunications Markets

The International Handbook of Telecommunications Economics, Volume III

Edited by Gary Madden

This major reference work provides a thorough and up-to-date survey and analysis of recent developments in the economics of telecommunications. The Handbook serves both as a source of reference and technical supplement for the field of telecommunications economics.
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Chapter 21: Sector-specific regulation of German telecommunications

Gunter Knieps


21. Sector-specific regulation of German telecommunications Günter Knieps INTRODUCTION The recent process of gradually opening telecommunications markets to competition is coming to an end. Since 1998 in nearly all European countries market entry has been allowed to all parts of the telecommunications networks, including both cable-based infrastructure and telephone services. The new telecommunications law allowing overall market entry in Germany was passed in July 1996.1 From the perspective of entry deregulation this telecommunications law overruled the legal basis for German telecommunications regulation which lasted for nearly a century. The new telecommunications law is meant to promote full competition so that the role of the market should not be hampered by unnecessary administrative or regulatory intervention. Accordingly, the extent of government regulation in telecommunications markets should therefore be restricted to a minimum, and periodically checked for its continuing necessity. The process of entry deregulation, distinguishing between the period of global legal entry barriers, and the period of partial entry deregulation towards the new Telecommunications Law in 1996, is considered below. The process of entry deregulation in Germany is strongly related to the policy of network liberalization of the European Union (EU). The role of sectorspecific market power regulation, as opposed to general competition law is also analysed. The tendency of the new German Telecommunications Law toward over-regulation is leading to an oversized regulatory base. Finally, the current debate on the potential for phasing out sector-specific regulation is sketched. A critical appraisal of the recent Review of the...

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