Telekom Loses Local Access Appeal in Cologne Court

By Vanessa Fuhrmans at Bloomberg News05 November 1998  

Deutsche Telekom AG, Germany's former phone monopoly, must give rivals access to its local phone network without forcing them to pay for additional technical services, a Cologne court ruled. The administrative court rejected an appeal Telekom filed last year after Germany's now defunct Post and Telecommunications Ministry ruled the phone company could not tie local network access to its call-distribution technology and other services.

"Telekom wanted to put a little more butter on its bread," said a spokesman for the German telecommunications regulatory authority "But the effect would have been to trap competitors into using technology that wasn't their own."

The ruling is the latest blow for Telekom in its quest to protect the monopoly it still enjoys in local phone service. It already competes against other carriers in long-distance service.

On November 30, the German telecommunications regulator will hand down a final decision on how much Telekom can charge rivals for local access, an amount Telekom chief executive Ron Sommer has said will be crucial to the company's future profits.

Competitors say the fees will be key in determining costs and target dates for when they, too can offer local service. Telekom wants to charge rivals 47.26 marks ($28.46) a month for each local connection to a home of business they manage, nearly double the 24.60 marks it charges its own customers. The proposed fee also is considerably higher than the 20.65 marks the regulator set as a limit earlier this year, though it left room for Telekom to charge more if it could justify the costs.

The phone company said it still has to review the court's decision before it decides whether to appeal the ruling further. A court spokesman said a formal, written ruling and reasoning behind the decision would not be available for several weeks. Shares in Telekom rose 59 pfennig to 46.7 marks.