Prospects of a legal battle between the German government and the European Commission over a new network for online access to World Cup football matches moved a step closer on Monday.
E.U. information society commissioner Viviane Reding said Monday she had written to the German economics minister to express concern about plans to allow Deutsche Telekom to prevent competitors using a fiber optic network it is planning to install in time for the World Cup which kicks off in Germany in July.
The commissioner, who is responsible for overseeing how national regulators police local telecommunications markets, has hinted strongly on previous occasions that she will refer Germany to the European Court of Justice if it does not amend draft regulations for the telecommunications sector being drawn up by the government.
"The future of the telecommunications market is not by establishing new monopolies on the basis of old ones," Reding told a press conference in Brussels on Monday. Instead, new infrastructure should be opened to competition, she said, arguing that competition led to increased revenue.
Deutsche Telekom is planning to build a Euro 3 billion fiber optic network which would link Germany's 10 biggest cities in time for the start of World cup matches in July. The VSDL network would offer download rates of up to 50M bits per second, around five to ten times higher than most broadband connections. The aim is to use to the service to offer paid access to matches. A further 40 cities would be connected by 2007.
But the commission is concerned that the current draft of the law would effectively give Deutsche Telekom freedom from competition over the network for an unspecified period.
Deutsche Telekom has warned that it will cancel the investment plans if the law is not drafted in accordance with its demand. "We need clear legal commitments regarding the long-term regulatory situation if we are to roll out this project", Kai-Uwe Ricke, Deutsche Telekom's chief executive officer, said earlier this month.
The company did not immediately respond to requests for comments.