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May 11, 1988

TELECOMMUNICATIONS LIBERALISATION BILL REACHES THE WEST GERMAN PARLIAMENT

By CBR Staff Writer

The draft proposals on the deregulation and reform of the West German telecommunications market were yesterday nodded through first stage of their parliamentary passage subject only to changes in detail. The proposals have now reached bill status which will have to be passed by the Bundesrat and Bundestag before becoming law and this is expected to come into force at the beginning of 1989. Dr Christian Schwarz-Schilling, Federal Minister of Posts & Telecomunications said that to accomodate the shift from a seller’s market to a buyer’s market, the principle of competition is to be the rule in telecommunications although the public provider monopoly will remain the exception. However the monopoly will be split into three separate businesses Postal Service, Postal Bank and Telekom – and importantly these businesses will be stripped of regulatory authority. This will instead be handled by three bodies – akin to the Office of Telecommunications in the UK and the Federal Communications Commission in the US – monitoring the activities of each of the new businesses. Telekom will retain the exclusive right to install and operate telecommunications networks, apparantly to maintain the infrastructural significance and responsibility of telecom although this monopoly status will be waived in innovative market areas such as mobile services. Dr Schwarz Schilling looks for the reforms to enable the Bundespost to embark on a much more aggressive role internationally but promised that the level of service in rural areas will not drop.

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