Deutsche Telekom sued over duct pricing
April 16, 2012
Kabel Deutschland (KD), Germany’s largest cable TV operator, is seeking a retrospective price reduction for the co-use of cable ducts owned by former monopoly Telco Deutsche Telekom.
The price had been agreed between the two operators, but then the regulator, German Federal Network Agency, set lower prices for co-use of cable ducts for access to Deutsche Telekom’s street cabinets by alternative broadband service providers using VDSL technology. These prices for VDSL operators will hold until June 30, 2013, at a level significantly lower than KD has been paying.
This was seized upon by KD as an opportunity to make some unexpected money, and the operator is now suing Deutsche Telekom for a two-thirds reduction in the €100 million annual fee it is currently paying, plus a further €273 million plus interest for what it now contends it has overpaid in the past.
The case hinges on whether the ducts KD has been using are essentially identical to those involved for VDSL access under the new lower set pricing. If they are, then KD will have a strong case at the very least for a price reduction to take effect now, although it may still be argued that the higher amounts were justified in the past. But, if, as Deutsche Telekom argues, the ducts providing access to street cabinets for VDSL are substantially different, the case may be thrown out, although it is hard to see why there should be a big gap between the two in price.
The case is expected to rumble on for a few years, unless the two operators reach an out-of-court settlement, of which there is no sign at present.