Mobile Network Operators Face Regulatory Action in Germany
For the first time, the Federal Network Agency (Bundesnetzagentur) is taking action against Germany's major mobile network operators - Deutsche Telekom, Telefónica (O2), and Vodafone - due to perceived shortcomings in mobile network coverage. A letter from the agency, obtained by Deutsche Presse-Agentur, states that the operators have "culpably failed to fully comply with coverage requirements in a timely manner."
Although fine proceedings have commenced, the companies have the opportunity to offer their perspectives. A decision is set to be made in the following year. Concurrently, the companies also face the danger of penalty payments, as separate proceedings have been initiated simultaneously.
Operator Responses
Deutsche Telekom, Telefónica, and Vodafone argue that they haven't breached coverage requirements. They cite an exception rule when expansion wasn't feasible due to legal or factual constraints, such as lack of land plot rental or unwillingness to erect radio masts. According to the companies, this rule legitimates their conduct in specific situations.
However, the Federal Network Agency disagrees with this justification in certain instances and suggests that antennas could have been installed in particular locations despite obstacles.
Coverage Challenges and Penalties
Obstacles remain in addressing 4G dead spots, where none of the three network operators offers 100 megabits per second service. While the companies aim to rectify this issue by the year's end, some white spots remain unaddressed.
Moreover, the providers confront difficulties in providing a reliable network in some federal highway tunnels, which is legally mandated. These issues forms the basis for ongoing proceedings.
Initial Response to Penalties
Although numerous violations are perceived to be limited, fines could be low if ultimately imposed. Some sources argue that the initiation of proceedings serves as a warning to operators to improve network expansion and fully meet legal obligations. Historically, the Federal Network Agency has been less proactive in enforcing similar cases, as proven by the absence of fines against the companies following non-compliance following the 2015 auction.
Administrative Leader Changes
Klaus Müller, who previously led the Federal Association of Consumer Organizations, became president of the Network Agency in 2022. In his current position, he continues to advocate for consumer interests. Some critics argue that penalties have indeed been levied more harshly under his leadership, despite these grudges being more significant in prior instances.
Additional Actions and Enrichment Data
In addition to the proceedings against the established operators, the Network Agency also initiated actions against the newcomer 1&1 in the spring of 2022. The company had failed to activate 1,000 5G sites by the end of 2022, as required by the federal government. The specifics of the proceedings against the company have yet to be determined.
Regulatory frameworks and potential consequences, beyond fines, could impact the companies' operations. For instance, the Federal Network Agency governs the frequency spectrum and enforces regulatory requirements, while digital accessibility laws are managed by other authorities. Failing to adhere to accessibility regulations could also result in penalties. Additionally, customer complaints and negative public perception can directly impact a company's reputation and market position.
