Skip to main content

The Status Quo in German Telecommunications Law: A Legislative Race Towards the Liberalization Deadline

Although a last minute regulatory effort had become necessary, the German legislator and the rulemakers in the German ministry for Posts and Telecommunications (BMPT) expect that all relevant European telecommunication legislation will be implemented into domestic law by the long awaited deadline for full liberalization of the telecommunications market on 1 January 1998. Of course, a few adjustments of the national laws may still become necessary, in particular with regard to those European Directives that have been amended only recently. The following analysis discusses the implementation of those Directives which seem to be the most central provisions with regard to liberalization.

The EU Liberalization Directive (96/19)

The Directive 96/19/EC of 13 March 1996, which aims at full competition in the telecommunication market, is the most programmatic of the European provisions. It amends Directive 90/388/EC especially with regard to competition related aspects of telecommunication services. The Directive alters some defintitions such as the "essential requirements" that a member state may require from an operator of telecommunications networks or services. Furthermore, it emphasizes the criteria of objectivity, non-discrimination, proportionality and transparency for several aspects of regulating or restricting the market.

The Directive was implemented into German domestic law by the following measures: The basic statute that provides for the liberalization of the German telecommunications market is the Telecommunications Act 1996 (TKG).[1] It was designed on the basis of the EU Service Directive 90/388/EC. Thus, it is not surprising that most principles of the EU Directive harmonize with German law. Even the amendments of the Liberalization Directive (96/19/EC) do not call for a significant change of the German legislation, since the relevant statutes and ordinances envisioned possible amendments of the EU legislation. Besides the TKG, further legislation which were entering into force on 1 November 1996 and on 1 January 1998 implement the Directive 96/19/EC.

Along the lines of the Liberalization Directive, the express purpose of the TKG is to promote equal opportunity and workable competition through regulation of the telecommunications sector (sections 1 and 2(2) No.2 TKG.) This Act regulates the telecommunications market and fully replaces the old Transmission Installation Act 1989 (FAG), as amended 1996, by the end of 1997. The FAG was the central statute regulating telecommunications during the monopoly of formerly public postal services and expires by 31 December 1997. After the (terrestrial) network monopoly fell on 1 August 1996, the voice monopoly of Deutsche Telecom AG ends by 1 January 1998 as stipulated by the Directive.

Satellite Directive (94/46) and Mobile Directive (96/2)

The areas of satellite services and mobile services belonged to the first sectors of telecommunications to be liberalized in Germany. German law contained provisions concerning the private offering of satellite and mobile services before the applicable EU Directives were implemented. The German regulation resembles much of what was written into European law. Not surprisingly, the implementation of the Directives did not cause major difficulties.

The Directive 94/46/EC with regard to satellite communications was implemented inter alia by the Transmissions Installations Act (FAG) 1989,[2] last amended by the Post Restructuring Act 1994.[3] In addition, the principles of the Directive are scattered in various other and more general ordinances, including the Telecommunications Granting Ordinance (TKVerleihV) in the version of 1995,[4] the Mobile Radio Telecommunications Granting Ordinance 1995[5] and the Telecommunications Admittance Ordinance 1995[6] and the documentation for the licensing of private satellite networks as of 1995, now mostly replaced by the provisions of the TKG dealing with private satellite networks.[7]

The principles of Directive 96/2/EC of 16 January 1996 amending Directive 90/388/EC with regard to mobile and personal communications correspond with section 3 of the German TKG which defines mobile services as telecommunication services, which are intended for mobile use. The TKG contains no special rules for mobile communication, so all sections about general telecommunication services are also valid for mobile services.

Cable Network Directive (95/51)

The Directive 95/51/EC of 18 October 1995 with regard to the abolition of the restrictions on the use of cable television networks for the provision of already liberalized telecommunication services amends Directive 90/388/EC of 28 June 1990 on open competition in the markets for telecommunications. The latter Directive corresponds with provisions from the Act on Postal Services 1969,[8] from the Act on the Restructuring of the Postal and Telecommunications Services 1989[9] and the FAG 1989.[10] In order to implement the amendments of Directive 95/51/EC, no further measures had to be taken so far.

The ONP Framework Directive (90/387)

The Directive 90/387 of 28 June 1990 on the establishment of the internal market for telecommunications services through the implementation of open network provision (ONP) aims at establishing harmonized conditions for the provision of an open telecommunications network. It contains provisions concerning the conditions for open access to and efficient use of the public net infrastructure. These conditions are based on the principles of objectivity, transparency and non-discrimination.

Although the Directive was formally implemented as early as in June 1989, the relevant provisions are now contained in the German TKG 1996. Section 5 TKG requires any provider of telecommunication services to submit such reports to the national regulation agency as necessary to fulfill the reporting duties to the European Commission under directives or regulations issued in accordance with Article 6 of the ONP Framework Directive.

With regard to general terms and conditions, section 23 the German TKG provides that the regulatory authority shall object to general terms and conditions for telecommunication services subject to license or for universal services if they do not meet the requirements of directives and recommendations issued in accordance with Articles 6 and Annex III of the ONP Framework Directive.

As far as abusive practices of market dominating providers in the area of ONP and Interconnection are concerned, section 33 of the TKG provides that the regulatory authority shall intervene if access to a telecommunication service is restricted to a greater extent than allowed by Article 3(2) of the ONP Framework Directive. Section 34 empowers the agency to intervene, if a market dominating provider fails to meet the standards of section 10 of the Directive.

Section 35(2) regulates the granting of network access that agreements between providers may only restrict access for reasons based on the essential requirements within the meaning of Article 3(2) of the Directive. Section 41(2) TKG lays down that the German Customer Protection Ordinance must also comply with the Directives issued under Article 6 of the ONP Framework Directive.

In section 35(2) TKG the legislator authorizes the Federal Government to regulate the details of network access in an Ordinance which shall observe the Directives issued in accordance with Article 6 of the ONP Framework Directive. This is a comprehensive reference to all European Law which will be passed under the Directive. It shall be the standard for the Open Network ordinances. Thereby the Directive is transformed into German law, at least from a formal point of view. The ONP Framework Directive was amended by a Directive on the adaption to a competitive environment in telecommunications. The amending Directive aims at adapting basic principles of open network provision to the competitive market.

In summary, it can be said that the ONP Framework Directive does not cause any major concern with regard to its full implementation on 1 January 1998.

The ONP Leased Line Directive (92/44)

The Directive 92/44/EC of June 1992 concerning open network provision for leased lines is based on the ONP Framework Directive. It contains general definitions including the concept of "leased lines", "national regulating authority" or "simple resale." It states the duty of telecommunication organizations to apply at least a certain number of parameters as supply conditions, such as delivery periods for a given type of leased line. At least five types of leased lines must be made available; a minimum set of leased lines with harmonized technical characteristics is defined in Annex II of the Directive.

These provisions are implemented by the Telecommunications Customer Protection Ordinance 1995,[11] the Ordinance on Data Protection for Telecommunications Service Provider 1996 (TDSV)[12] and the TKG. Ordinances passed under the TKG include the Telecommunications Universal Service Ordinance. It defines the provision of transmission lines as a Universal Service by direct reference to Annex II of the Leased Line Directive.

The ONP Leased Line Directive is formally fully implemented into German law. It was amended by a Directive on the adaption to a competitive environment in telecommunications, which aims at adapting basic principles of open network provision to the competitive market. Since the Directive is new, its full effect for German law still remains to be analyzed.

The ONP Voice Telephony Directive (95/62)

The Directive 95/62/EC of 13 December 1995 on the application of open network provision (ONP) to voice telephony aims at the harmonization of the conditions providing open and efficient access to fixed telephone networks and a harmonized voice service throughout the community. It contains such definitions as of the terms "fixed public telephone networks," "national regulatory authority" or "public telephone call box." Member States must ensure that telecommunication organizations provide a fixed public telephone network and a voice telephony service. Annex III of the Directive lists features which users might request and the applicable technical standards. National telephone numbering plans must guarantee that numbers are allocated fairly and equitably.

The Directive has been implemented into domestic law by the TKG, the FAG and the Telecommunications Customer Protection Ordinance 1995[13] and the Ordinance on Special Network Access 1996 (NZV),[14] the Ordinance on the Regulation of the Obligatory Services of the German Postal Services Telekom 1992,[15] the Ordinance on Telecommunication Rates Regulation 1996,[16] the Ordinance on the conformity assessment, labelling, admittance and marketing of telecommunications terminal equipment 1995,[17] Ordinance on data protection for telecommunications service providers 1996,[18] and various more general statutes.

Also, the Directive provides for its own update between 1995 and 1 January 1998 in order to adapt to the needs of a liberalized market. This new Directive is referred to as Directive [...] on the application of open network provision to voice telephony and on universal service for telecommunications in a competitive environment. The basic principles set out in the ONP Framework Directive should be adapted to establish a common approach to pan-European services. This amended version of the Voice Telephony Directive is not expected to cause major concern for the German regulators.

Telecommunications Terminal Equipment Directive

Currently, telecommunications terminal equipment and its recognition is regulated in Directive 91/263/EC of 29 April 1991, as amended, on the approximation of the laws of the Member States concerning telecommunications terminal equipment, including the mutual recognition of their conformity. This Directive is still valid and implemented into German law by the relevant provision in the TKG, supplemented by the Telecommunications Approval Ordinance 1995, as amended 1997 (TKZulVO).[19]

The TKG makes direct reference to the Directive with regard to its equipment conformity assessment procedure. Section 59(4) TKG provides that details of conformity assessment, approval and implementation procedure for terminal equipment as well as of its marking shall be regulated in observation of the Terminal Equipment Directive. Further, the TKG refers to the Directive in the context of the ordinances that regulate requirements and procedure for functions assignment to notified bodies and accreditation of test laboratories or quality control bodies.

Draft Directive Relating to Terminal Equipment Recognition

The new draft of the Directive, the "CTE-Directive," is still under discussion. The main conflicts with current German law lie in the area of the proposed conformity assessment procedure. While the TKG's approach uses quality control bodies and test laboratories for the conformity assessment, the European Draft Directive shifts more responsibility to the manufacturer of terminal equipment. It will be possible to use any terminal equipment for which a conformity assessment declaration of the manufacturer exists. In the long-run, this procedure will diminish the significance of the German testing bodies.

Although this new procedure will be easy to implement into German law, some friction might occur in the area of radio terminal equipment. For those radio applications whose frequency spectrums are not harmonized between the Member States, for example some directional radio applications, the Draft Directive will lead to technical problems. If the radio equipment will be admitted for operation simply by the conformity declaration of the manufacturer, unharmonized frequencies will lead to transmission interferences. A possible solution might be the insertion of a reservation clause into the Draft Directive according to which the national regulatory bodies retain the right to interfere if national regulations require it.

A side issue in the Draft Directive is the representation of national interests in the European Terminal Equipment Committee. In contrast to the German Ministry for Posts and Telecommunications, the EU seemingly wants to limit national influences in this committee.

Licensing Directive (97/13)

The Directive 97/13/EC of 10 April 1997 on a common framework for general authorizations and individual licenses in the field of telecommunications services aims at harmonizing the licensing procedure. It limits the type of conditions that can be imposed on licenses, provides for a general 'one-stop-shopping' procedure and among other provisions contains a policy on the limitation of the number of licenses.

The goals of the Directive are realized in the first chapter of the TKG, which deals with the licensing regime in general, including provisions concerning the change of a licensee, limitations of the numbers of licenses, license revocation and license fees.[20] Ordinance No. 116/1996 of the BMPT gives specific information with regard to the requirements and documents to be submitted with a license application.[21]

Notwithstanding, the stipulations of the directive with regard to license fees caused great attention with the regulators in Germany. According to Article 11 of the Directive, fees and charges for individual licenses may only cover "the administrative costs incurred in the issue, management, control and enforcement of the applicable individual license. The fees shall be proportionate to the work involved. License fees are regulated in the Telecommunications License Fee Ordinance of 28 July 1997, which entered into force on 1 August 1997.[22] Frequency fees are regulated in the Frequency Fee Ordinance of 21 May 1997 which entered into force on 1 August 1997.[23] The initial drafts of these Ordinances on fees did not seem to comply with the requirements of the directive and therefore the German delegation tried to alter Article 11 in the legislative process - without much success. At least, a protocol was published that allowed to consider the future costs for administering and managing the individual license when calculating the license fee.

Still the controversial new License Fee Ordinance[24] has been criticized for violating the principles of the Directive. It allows for a license fee of up to 10.6 million German Marks for a nationwide license for the operation of transmission lines. This sum has been calculated based on the future costs for administrating the license. However, it has been alleged that the estimate of the future cost is an average sum and takes into account the costs for licenses that require more effort to administer, such as community licenses, as opposed to estimating the cost of the individual license as prescribed by the Directive.

Furthermore, the German License Fee Ordinance may violate the principles of non-discrimination, proportionality and objectivity of German legislation regulating the market. It can be argued that the 10.6 million German Marks fee is a discriminatory impediment for the entering into the market of small or medium-size businesses for which the payment of such a high amount might be an extremely risky, if not impossible, endeavor. On the other hand, the license fee is dependent on the licensed area and small enterprises have the possibility to apply for a license for a limited area first, and later expand the covered area along with the economic growth of the business.

Interconnection Directive 1997 (97/33)

The Directive 97/33/EC on interconnection in telecommunications with regard to ensuring universal service and interoperability through ONP (The Interconnection Directive) of June 1997 aims at providing for community wide fair conditions for interconnection and interoperability of telecommunications networks. The Directive defines "interconnection" as linking of telecommunications networks of the same or different organization for different purposes. It regulates right and obligations for interconnection as well as universal contributions for connecting network operators as well as principles for interconnection charges and costs.

On a domestic level, universal services are regulated in general by sections 17 to 22 of the German TKG of 25 July 1996.[25] Further details are contained in the Ordinance on Telecommunications Universal Services 1997. Interconnection conditions are regulated in sections 33 to 39 TKG. The relevant ordinance is the Ordinance on special network access 1996 (NZV).[26] While this Ordiance already follows the guidelines of the Directive, it was already the subject of litigation. On 18 August 1997, the Cologne Administrative Court ordered Deutsche Telekom AG in a preliminary procedure to provide unbundled access to the "last mile" telephone lines that lead to the network termination points for the end users (Teilnehmeranschlußleitungen). It thereby approved the decision of the German regulating agency which had decided on the interconnection conditions according to a settlement procedure as provided for under EU law. It shows that in this area, EU law is not only implemented, but already operated within the domestic legal system.

On the other hand, the interconnection pricing system is one of the areas where in Germany more effort is necessary than already undertaken. The Communication to the Council on the implementation of the telecommunication regulatory package of October 1997[**] identifies the cost accounting system as well as the tariff principles for interconnection, for leased lines and for voice telephony as issues in which Germany has only some provisions in place. With regard to the tariff principles laid down in the Interconnection Directive and the new Leased Lines and Voice Telephony Directives Germany has not fully integrated the principles of cost orientation, transparency and non-discrimination. Instead it only has some provisions in place. Also, further work needs to be done on cost accounting and accompanying verification measures.


It has been shown that the most important EU Directive concerning the liberalization of telecommunications law has been implemented into German law. In some areas German domestic law has influenced European policy making, in other areas common approaches to typical problems like interconnection, universal services and open network provisions have been developed in Germany and on the European level at the same time. This is one of the reasons why implementing EU into German law does not seem to cause many inconveniences. Another reason is the complete restructuring of German telecommunications law from 1989 onwards until 1998. Whether the national provisions in fact fully implement the European provisions from a substantive point of view remains to be seen after the law comes into full operation and interpretation. Some concerns exist, for example with regard to license fees, and one may ask whether German law has already truly liberalized the telecommunications market. Impediments still exist, and even if they are only caused by the extremely late implementation of some of the regulations. They came just in time to meet the 1998 deadline, but too late for some businesses, which needed to plan ahead in order to be able to fully compete on the market.

Karl Pilny is a partner and Siegmar Pohl is a stagiaire in Coudert Brothers' Berlin Office.


[1] See Pilny, German telecommunications law - opportunities and challenges on the way towards full liberalization, in: Communications Law, Vol. 1 No. 2 1996, at 55 et seq.; Pilny, Multimedia in Germany: Potentials and Problems, in: CTLR 1995, Vol. 3, at 88 et seq..

[2] BGBl. 1989, Part I, at 2325.

[3] BGBl. 1994, Part I, at 2325.

[4] BGBl. 1995, Part I, at 1434.

[5] BGBl. 1995, Part I, at 1446.

[6] BGBl. 1995, Part I, S. 1671.

[7] Sections 60 TKG et seq..

[8] BGBl. 1969, Part I.

[9] BGBl. 1989, Part I, at 102.

[10] BGBl. 1989, Part I, at 1456.

[11] BGBl. 1995, Part I, at 2020.

[12] BGBl. 1996, Part I, at 982.

[13] BGBl. 1995, Part I, at 2020.

[14] BGBl. 1996, Part I, at 1568.

[15] BGBl. 1992, Part I, at 1614.

[16] BGBl. 1996, Part I, at 1492.

[17] BGBl. 1995, Part I, at 1671.

[18] BGBl. 1996, Part I, at 982.

[19] BGBl. 1995, Part I, at 1671. The initial implementation of some provisions of the Directive was also effected by the FAG.

[20] On the German licensing regime cf. Pilny/Pohl, The Licensing regime Under German Telecommunications Law: Implementation and Interpretation, CTLR 1997 at 192 et. seq.

[21] Amtsblatt No. 17/96 Bundesministerium für Post- und Telekommunikation, at 951. For a summary of the order cf. [1996] 5 C.T.L.R. T-125.

[22] BGBl. 1997, Part I, No. 54, at 1936.

[23] BGBl. 1997, Part I, No. 33, at 1226.

[24] BGBl. 1997, part I, 31 July 1997, at 1936.

[25] BGBl. 1996, Part I, No. 39, at 1120.

[26] BGBl. 1996, Part I, No. 53, at 1568.

[27] Communication to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on the implementation of the Telecommunications regulatory package: first update (October 8, 1997)

Was this helpful?

Thank you. Your response has been sent.

Copied to clipboard