News

26.04.2018

No. 426: In-house infrastructure – access and pricing

No 426: In-house infrastructure – access and pricing

(full version only available in German)

Authors: Saskja Schäfer, Gabriele Kulenkampff, Thomas Plückebaum with contributions of Stephan Schmitt

Summary

To what extent is the German DigiNetz Law supporting or restricting access to in-house infrastructure? In order to clarify this question WIK elaborates an appropriate pricing regarding in-house infrastructure sharing. Concerning NGA-technologies, in particular FTTH, the in-house infrastructure is of importance. The nature of in-house infrastructure is also relevant with respect to circumstances in which more than one network operator wishes to offer his services to customers within the same building.

Main research questions in this study are:

  • Under which conditions must access to the in-house infrastructure be granted? Which particularities should be taken into account?
  • Which pricing principles could be used for the access to in-house infrastructures?
  • Do the provisions of the DigiNetz Law regarding in-house infrastructure optimally support broadband deployment in an economically desirable way?

In the course of the conducted expert interviews we gained insight that current problems are not related to pricing yet, actually there are technical and institutional facts that do matter and hinder broadband rollout. Besides pricing, we therefore investigated the following issues:

  • implications from different constellations of ownership of the infrastructure
  • the role of Standardisation
  • technical realities, particularly crosstalking, that arise in a situation where two or more providers wish to serve customers within the same building (external effects) on parallel infrastructure

Looking at the provisions for in-house infrastructure in the DigiNetz Law we conclude that pricing at incremental costs and the right of the end-user to establish an in-house cabling in order to provide his flat with broadband access (specific provision of DigiNetz Law) defines an economically preferable basis on which we build our analysis. However, we identify obstacles and conclude that further clarification and amendments are required, in order to accomplish the objective of broadband rollout. Finally, we provide potential solutions concerning measures that address challenges arising in practice, focusing on those generating economically preferred outcomes and supporting a fast broadband roll-out. The identified weaknesses could be addressed by the following approaches: (i) favoring one special kind of ownership constellation for the in-house infrastructure, (ii) different measures, e.g. vouchers, requirements for retrofitting, (iii) the design of a transformation process in order to achieve a fair transition regarding sunk investments made by network operators on basis of framework conditions that existed before the DigiNetz Law.

The whole topic of broadband in-house infrastructure is just at the beginning of its discussion. This study contributes to this discussion by offering a working basis for following reflections. Furthermore, we initiate a debate regarding technical neutrality and its pretended merits in the context of enhancing broadband rollout.

Discussion Paper (in German language) is available as pdf-file and can be ordered for a fee of 7 Euro incl. VAT.

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