Communications: regulation and outsourcing in Germany: overview

A Q&A guide to communications regulation and outsourcing law in Germany.

The Q&A gives a high level overview of communications law, including authorisation and licensing, universal service obligations, spectrum use, access and interconnection, data protection and security, price regulation, subscriber management, and outsourcing and telecommunications.

To compare answers across multiple jurisdictions, visit the Communications: Regulation and Outsourcing Country Q&A tool.

This Q&A is part of the Communications: Regulation and Outsourcing Global Guide. For a full list of jurisdictional Q&As visit www.practicallaw.com/communications-guide.

Contents

The telecommunications market

1. Give a brief overview of the structure of the telecommunications market in your jurisdiction. Briefly set out any major recent developments, such as mergers and acquisitions, restructurings and insolvencies.

Market structure

The telecommunications market currently contains three dominant companies:

  • Deutsche Telekom.

  • Vodafone Deutschland.

  • Telefónica Germany.

Following the liberalisation of the telecommunications market in 1996, the once state-owned monopoly company, Deutsche Telekom, now faces competition in the market.

For mobile services, the telecommunications market is relatively balanced:

  • Telefónica Germany with a share of 37.7% of customers.

  • Deutsche Telekom with a share of 35.7% of customers.

  • Vodafone with a 26.6% share of customers.

In 2014, Telefónica Germany acquired its competitor E-Plus (KPN's mobile unit in Germany), making it the market leader on the number of customers. Before this, Telefónica Germany was represented in Germany by its brand o2, holding only the fourth largest share of mobile customers in Germany.

Due to the large costs required to obtain the required mobile spectrum, barriers of entry to the market are significant, shown by the fact that there are only three companies in the market. However, the barriers to entering as a Mobile Virtual Network Operator (MVNO) are much lower. It is relatively simple and low cost to rent capacity from the established networks and then set up a business. This market is far more crowded and a lot of the MVNOs have niche target customer groups such as:

  • Discount shop customers (such as AldiTalk and Edeka Mobil).

  • Young people (for example, Toggo Mobile).

  • Ethnic groups (for example, Ay Ildiz).

  • "Spin-offs" (for example, Tarifhaus).

In the broadband market Deutsche Telekom (41.7%) still dominates, with more than double the number of customers subscribed to Vodafone (18.3%, including the acquisition of KabelDeutschland), the company with the next biggest share of customers. 1&1 follows with 14.2% of customers. Telefónica Germany only offers fixed line through their o2 brand and not E-Plus. However Telefónica Germany is clearly attempting to catch up with the market leaders.

Recent developments

Both Vodafone and Deutsche Telekom appear to be moving towards the idea of quad play. Through the acquisition of Kabel Deutschland in 2013, Vodafone gained a fixed line network to offer along with its mobile services. Since November 2014, Vodafone has been offering an "all in one" package of mobile, landline, broadband and television. Deutsche Telekom also has similar deals in place. The aim is to move all the customers subscribed to just one of their services to a combined multi-service package, giving the companies more revenue and the customer one simple bill to pay each month. The following recent trends or events are of importance:

  • Vodafone acquired cable provider Kabel Deutschland in June 2013.

  • Deutsche Telekom acquired GTS Central Europe in June 2014.

  • United Internet acquired Versatel in September 2014.

  • Telefónica Germany acquired Royal KPN NV's German mobile unit (E-Plus) in October 2014 and started with the consolidation of the network.

  • Spectrum licences auction in June 2015 for current and future (5G) network services with a total revenue of EUR5.1 billion.

 

Restrictions on foreign ownership

2. Are there any restrictions on foreign companies entering the telecommunications market in your jurisdiction?

There are currently no restrictions on foreign companies entering the telecommunications market. The same rules apply for all market participants, regardless of their origin. However, foreign companies must designate a German authorised recipient for correspondence from the Federal Network Agency (Bundesnetzagentur) (BNetzA).

 

Regulatory framework

Legislation and regulatory authorities

3. Give a brief overview of the regulatory framework for telecommunications in your jurisdiction. Which authorities regulate telecommunications services in your jurisdiction? Is there a separate regulator for competition law issues in this sector?

Regulatory framework

The regulatory framework is fairly fragmented. The most important regulatory provisions are in the Telecommunications Act (Telekommunikationsgesetz) (TKG). The TKG provides for various regulatory fields including:

  • General market regulation.

  • Access to market regulation.

  • Regulation of fees.

  • Abuse control.

Based on the TKG, several sub-statutory ordinances deepen and specify the requirements set out in the TKG. These ordinances include:

  • Telecommunications Numbering Ordinance (Telekommuníkations- nummerierungsverordnung) (TNV).

  • Telecommunications Numbering Fees Ordinance (Telekommunikations- nummerierungsgebührenverordnung) (TNGebV). This will cease to be effective in 2021 but it is likely to be replaced by another similar ordinance).

  • Emergency Calls Ordinance (Notrufverordnung) (NotrufV).

  • Telecommunications Fees Ordinance (Telekommunikationsgebühren-verordnung) (TKGebV). This will cease to be effective in 2021 but it is likely to be replaced by another similar ordinance).

  • Telecommunications Monitoring Ordinance (Telekommunikations-Überwachungsverordnung) (TKÜV).

  • Frequency Fees Ordinance (Frequenzgebührenverordnung) (FGebV). This will cease to be effective in 2021 but it is likely to be replaced by another similar ordinance.

  • Frequency Levy Ordinance (Frequenzschutzbeitragsverordnung) (FSBeitrV).

Other Acts contain additional provisions that refer to regulation of the telecommunications market. These acts include:

  • Telemedia Act (Telemediengesetz) (TMG).

  • Federal Data Protection Act (Bundesdatenschutzgesetz) (BDSG).

  • Local Data Protection Acts of the individual federal states.

Regulatory authorities

The main regulatory authorities in the telecommunications sector are the following:

  • Federal Network Agency (Bundesnetzagentur). This is responsible for the regulation of certain markets (including the telecommunications market) for commercial (for example, pricing regulation) and technical (for example, spectrum allocation) fields.

  • Federal Data Protection Commissioner (Bundesbeauftragter für den Datenschutz und die Informationsfreiheit). This is responsible for controlling (section 24, BDSG) and advising (section 26, BDSG) federal authorities, other public bodies on the federal level, telecommunications and postal service providers according to the Telecommunications Act and the Postal Act (Postgesesetz) (PostG). The Commissioner advises and monitors the implementation of security checks under the Security Screening Act (Sicherheitsüberprüfungsgesetz) (SÜG), on public authorities and private companies.

    Where the data of natural or legal persons are collected, processed or used for the commercial provision of telecommunications services (meaning, as far as the person concerned is already a customer of the respective telecommunications service provider) the Federal Data Protection Commissioner is responsible for monitoring compliance with data protection regulations and for the provision of any complaints to the Federal Network Agency (section 115(4) , TKG).

  • Data Protection Commissioners of the respective Federal States (Landesdatenschutzbeauftragte). They are responsible for controlling and advising public authorities of the respective federal state on matters of data protection. The respective Data Protection Commissioner is also responsible for the telecommunications service providers to the extent the data protection issue does not arise from a customer agreement (for example, questions of data protection regarding employment agreements with a telecommunications service provider).

Any competition law matters (with the exception of the control of market abuse by companies with significant market power, which is carried out by the Federal Network Agency according to sections 28 and 42 TKG) are within the competence of the Federal Cartel Office (Bundeskartellamt) (BKartA).

 

Authorisation and licences

4. What notification, authorisation and licences are required to provide telecommunications services? What is the licence application procedure and fee?

Following Directive 2002/20/EC on the authorisation of electronic communications networks and services (and the amendments in Directive 2009/140/EC), and the corresponding amendments in the Telecommunications Act (Telekommunikationsgesetz) (TKG) implementing the above directives into national law, the individual licences previously required to provide telecommunications services are no longer necessary. Instead, there is a general authorisation for companies to offer telecommunications services to the public. This entitles them to:

  • Negotiate interconnection with other providers in the EU.

  • Obtain access to or interconnection with other providers.

  • Be designated to provide certain universal service functions.

However, the provider must submit a notification to the Federal Network Agency (Bundesnetzagentur).

Since there are no specific licences for the provision of general telecommunications services, there are no licence fees. However, providers must pay a Frequency Usage Fee and a Frequency Levy according to the Frequency Fees Ordinance and the Frequency Levy Ordinance. These are calculated by taking into account the turnover of the individual companies. The Federal Network Agency provides annual information about the above fee and levy.

See Question 10, for spectrum licences and corresponding licence fees.

 
5. How long does a telecommunications licence typically last and what are the usual conditions attached to it? Can conditions be varied? Are licences available for public inspection?

No licences are required because of the general authorisation (see Question 4). However, see Question 10 on spectrum licences and corresponding licence fees.

 

Penalties for non-compliance

6. What are the consequences of non-compliance with the telecommunications regulations?

Non-compliance with the telecommunications regulations (for example, with the Telecommunications Act or Regulation (EC) 717/2007 on roaming on public mobile telephone networks within the Community) entitles the Federal Network Agency to take action, including the following (section 126 et seq. , Telecommunications Act (Telekommunikationsgesetz) (TKG)):

  • The Federal Network Agency (Bundesnetzagentur) can request that the potentially non-compliant telecommunications provider submits an explanatory statement and takes remedial actions against the violation within the deadline set by the agency.

  • If the telecommunications provider fails to meet its obligations as requested by the Federal Network Agency, the agency can set other measures necessary to meet the obligations and can impose a penalty payment (Zwangsgeld) of up to EUR500,000 for further non-compliance.

  • In the event of further non-compliance, serious or repeated breaches of other obligations, the Federal Network Agency can bar the company from any further engagement as a telecommunications network operator or service provider.

  • The Federal Network Agency can request information and, if necessary, inspect and audit business records of telecommunications service providers.

  • The Federal Network Agency can conduct investigations and seize all necessary evidence (including objects).

  • Non-compliance with particular regulations of the TKG (for example, interception of messages, ownership, manufacturing or marketing of certain telecommunications devices) or the Telemedia Act (Telemediengesetz) (TMG) (for example, providing incorrect or incomplete information) can lead to imprisonment (in case of violation of TKG only) or administrative fines.

Failure to comply with particular regulations of the Federal Data Protection Act (Bundesdatenschutzgesetz) (BDSG) or the respective Local Data Protection Act can result in the imposition of administrative fines (section 43, BDSG) or imprisonment (section 44, BDSG).

Competitors can also assert rights against telecommunications providers for violation of certain provisions of the TKG. These rights include:

  • Cease and desist declarations.

  • Rights to obtain information.

  • Damage claims, where applicable.

The main prerequisite for these rights asserted by the competitors is a violation of a statutory provision that is also intended to regulate market behaviour in the interest of market participants (for example, provision regulating customer protection (section 43a et seq. , TKG) or price indication (section 66a and following, TKG).

 

Appeals

7. Can decisions of the regulators be appealed and on what grounds?

The decisions of the Federal Network Agency (Bundesnetzagentur) can be appealed (section 137, Telecommunications Act (Telekommunikationsgesetz) (TKG)). The grounds for appeal are not specifically named in the TKG. The decisions can be appealed due to the following (general) reasons:

  • Procedural reasons. These are a formal requirement during the decision making of a public authority (for example, the Federal Network Agency). These reasons include, lacking competence of the deciding authority and a violation of procedural matters, such as:

    • a proper hearing of the concerned parties;

    • participation and co-operation of third parties;

    • public information and consultation;

    • proper form of the decision (for example, written decision with valid information about possibilities of appeal); or

    • proper statement of grounds of the decision.

  • Substantive reasons. Essentially, these are the wrongful application of statutory law. The reasons include:

    • wrongful application of the legal basis (for example, not acknowledging an exemption from general rules);

    • wrong subject of the Federal Network Agency order (for example, imposition of access obligations despite the fact that the recipient does not possess significant market power);

    • legal or factual impossibility of the execution of the order;

    • lack of clarity of the imposed obligation (for example, price regulation decision without a clear and transparent price definition); or

    • lack of proportionality and reasonableness of the decision (for example, clear and significant disproportion between the purpose and the means of the order).

 

Universal service obligations

8. Is the incumbent provider or other large providers with significant market power subject to specific regulations? Do universal service obligations apply? Are there provisions for the structural separation of a network?

Large providers with significant market power are subject to further regulation of their telecommunications services. These regulations and additional obligations of telecommunications providers with significant market power include (but are not limited to) the following:

  • Non-Discrimination obligations (section 19, Telecommunications Act (Telekommunikationsgesetz) (TKG)).

  • Transparency obligation (section 20, TKG) regarding all information required for use of the relevant access services or facilities.

  • Access obligation (section 21, TKG) for the benefit of other companies, if otherwise the development of a sustainable competitive downstream retail market would be hindered or this development would run counter to the interests of the end-users.

  • Obligation to offer access agreements (section 22, TKG) to companies requesting these services and facilities without undue delay but in any case not later than three months after the access obligation has been imposed.

  • Separate accounting (section 24, TKG). The Federal Network Agency (Bundesnetzagentur) can require a public telecommunications network provider with significant market power to keep separate accounts for certain activities related to access services and facilities.

  • Abusive conduct in levying and agreeing rates (section 28, TKG). Telecommunications service providers and public telecommunications network operators must not abuse their position when levying and agreeing rates.

  • Obligations to provide information (section 29, TKG) about the service offer, current and expected sales.

  • Charges regulation, approval of the Federal Network Agency (section 30 et seq. , TKG). The public telecommunications network providers are subject to regulation and approval of charges by the Federal Network Agency for charges under access obligations (section 21, TKG) and for further charges (section 38, TKG).

  • Anti-competitive behaviour (section 42, TKG). Providers of telecommunications services with significant market power and public telecommunications network operators with significant market power cannot abuse their position. Abuse is deemed to exist, in particular, by conduct consisting in, directly or indirectly, unreasonably obstructing other companies or materially affecting their competitive opportunities without objectively justifiable reason.

Universal service obligations can also apply. Where a universal service is not adequately or appropriately provided by the market or where there is reason to fear that these provision will not be secured, each provider operating in the relevant product market and achieving at least 4% of total sales in this market or having significant market power in the relevant geographic market must contribute to making possible provision of the universal service (section 80 et seq., TKG).

With regard to the structural separation of the network, companies operating public telecommunications networks or providing publicly available telecommunications services and with special or exclusive rights within the EU for the provision of services in other sectors must (section 7, TKG):

  • Structurally separate the activities associated with the making available of public telecommunications networks and the provision of publicly available telecommunications services.

  • Keep separate accounts for the activities associated with the making available of public telecommunications networks or the provision of publicly available telecommunications services.

 

General conditions

9. What general conditions apply to telecommunications services? Which other regulations must be complied with?

The most important rules are in the Telecommunications Act (Telekommunikationsgesetz) (TKG) and the Federal Data Protection Act (Bundesdatenschutzgesetz) (BDSG) (see Question 3). Additionally, the providers of telecommunications services must observe all existing rules of conducting business in Germany, including:

  • The Civil Code.

  • The Act Against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb) (UWG).

  • The Telemedia Act (Telemediengesetz) (TMG).

  • Additional data protection acts of the individual federal states.

 

Spectrum use

10. Which authorities allocate spectrum use and how is it managed?

The Federal Network Agency (Bundesnetzagentur) is responsible for the allocation of frequency spectrum. The allocation follows:

  • Section 52 et seq. of the Telecommunications Act (Telekommunikationsgesetz) (TKG).

  • Frequency Ordinance (Frequenzverordnung) (FreqV).

  • The annually updated Federal Network Agency Frequency Plan that contains a detailed description of various spectra that can be used for different purposes.

Spectrum is assigned individually on application. Where there is not sufficient spectrum available for assignment, the Federal Network Agency orders that an award procedure in the form of an auction takes place. Previously, there have always been more applicants for the frequencies than available spectrum. Therefore, auctioning is the usual way of allocation.

The most recent spectrum auction took place in May to June 2015 and allocated the mobile broadband frequencies. All the participants (Telefónica Germany, Deutsche Telekom and Vodafone) were able to acquire specific licences. Total revenue from the auction resulted in an amount of more than EUR5 billion.

 
11. Can spectrum use be traded or sublicensed?

In theory, spectrum bands can be released for trading, rent or communal use by the Federal Network Agency (Bundesnetzagentur). Also, if a company were to, for example, restructure, they are permitted by the Telecommunications Act (Telekommunikationsgesetz) TKG) to transfer frequency usage rights by singular or universal succession, although this requires the consent of the Federal Network Agency (section 55, TKG).

Conditions have been put in place by the Federal Network Agency for any transfer of spectrum rights (section 55(8), TKG). The same rules for the initial allocation basically apply for transferring the spectrum rights.

Due to the above strict rules, it is very unusual that any spectrum is sublicensed or transferred in Germany after the initial allocation by the Federal Network Agency. In particular, many licences allocated by the Federal Network Agency are provided under certain obligations that have to be fulfilled by the tendering parties (for example, grid or network construction and putting in operation). Recent examples are the German companies Quam and Mobilcom, which returned their 3G spectrum licences to the Federal Network Agency. The companies failed to fulfil the licensing obligations (in particular, setting up a grid available to 25% of the German population). Therefore, the licences that were acquired in 2000 for EUR8.5 billion and EUR8.4 billion respectively were seized by the Federal Network Agency.

 

Infrastructure and network management

12. Do communications providers have any powers to place their equipment on third party sites?

Generally, telecommunications providers have a right to place their equipment (for example, hubs and grid cables) on third party sites. The Telecommunications Act (Telekommunikationsgesetz) (TKG) makes a distinction between the principle of use of public ways (section 68 et seq. , TKG) and other property (that is property that does not constitute a public way (section 76 et seq., TKG)):

  • Public ways. Generally, the government can use traffic ways free of charge for telecommunications lines serving public purposes, provided that their dedication as traffic ways is not then restricted on a lasting basis (right of use). In this way, telecommunications lines have the following meaning "underground or overhead telecommunications cable plant, including the associated switching and distribution equipment, poles and supports, cable chambers and ducts" (section 3, no. 26, TKG). Traffic ways include public ways, squares, bridges and public waters. The government acting through the Federal Network Agency transfers, on written application, its rights of use of traffic ways to public telecommunications network operators. The Federal Network Agency (Bundesnetzagentur) must grant this right of use where the applicant has the proven specialist knowledge, reliability and efficiency to install telecommunications lines and the right of use is consistent with the regulatory aims of the Telecommunications Act.

  • Other property. With other property (this is any property that does not constitute a public way as described above), the owner cannot prohibit the installation, operation or renewal of telecommunications lines on his property insofar as:

    • it is on his property;

    • it is a line or installation that is secured by right and is used also for the installation, operation or renewal of a telecommunications line and the usability of the property is not then additionally restricted on a lasting basis; or

    • the property is not, or is not significantly, affected by such use.

Where there is a duty to tolerate, a property owner can claim appropriate financial compensation from the operator of the telecommunications line or the owner of the network, if use of his property or the income from it is affected beyond reasonable measure by the installation, the renewal, or by maintenance work, repair work or comparable measures directly connected with the operation of the telecommunications line. In the event of damage to the property or its accessories from the exercise of the rights of the telecommunications provider, the operator or the owner of the network must remove the damage at its expense.

 

Access and interconnection

13. Does access to infrastructure and a network have to be given to other providers?

See Question 8 on access obligations of telecommunications service providers with significant market power.

The Federal Network Agency (Bundesnetzagentur) can, in justified cases, impose obligations on public telecommunications network operators controlling access to end-users but not having significant market power to interconnect, on request, their networks with those of other public telecommunications network operators, as far as may be necessary to secure:

  • User communication.

  • The provision of services.

  • Service interoperability.

The Federal Network Agency can also impose further access obligations on public telecommunications network operators controlling access to end-users and not having significant market power, as far as may be necessary to secure end-to-end connectivity ("last mile" connectivity) (section 18, Telecommunications Act (Telekommunikationsgesetz)).

 
14. Is the interconnection of networks required? Are interconnection prices regulated and how are interconnection disputes resolved?

Every public telecommunications network operator must, on request, make an interconnection offer to other public telecommunications network operators to secure (section 16, Telecommunications Act (Telekommunikationsgesetz) (TKG)):

  • User communication.

  • Provision of telecommunications services.

  • Service interoperability throughout the EU.

The Federal Network Agency (Bundesnetzagentur) can (on third party request or on its own initiative) impose obligations on public telecommunications network providers with significant market power to grant access to other companies (section 21, TKG). This can include unbundled access that properly reflects their requirements, particularly if otherwise the development of a sustainable competitive downstream retail market would be hindered or this development would run counter to the interests of the end-users (see Question 8).

The interconnection prices can be regulated by the Federal Network Agency (section 30 et seq. , TKG) if interconnection is ordered in accordance with section 21 of the TKG. However, such an order is only possible for public telecommunications providers with significant market power (see Question 8).

For providers without significant market power, the Federal Network Agency cannot regulate the interconnection prices. The providers can only make an offer to other providers on request (section 16, TKG). The TKG does not state any details about such an offer (in particular, no details regarding pricing) and does not entitle the Federal Network Agency to set these prices. The TeliaSonera-decision of the Court of Justice of the EU (CJEU) is important here, where the European court has ruled that it constitutes a breach of the negotiation obligation if a company without significant market power makes an interconnection offer on terms that are likely to hinder the development of a competitive market at the retail level. Therefore, even if the interconnection charges are not regulated for providers without significant market power, the providers cannot issue offers that are completely commercially unviable in relation to charges.

In the event of interconnection disputes, the Ruling Chamber of the Federal Network Agency can issue a binding decision on request of either party and after hearing both of the parties within four months of the request (section 133, TKG).

 

Data protection and security

15. What data protection or consumer privacy regulations apply to the telecommunications sector, including both generally applicable and sector-specific laws? Are communications providers required to retain communications data? If yes, which data and for how long? What are the penalties for breach of these regulations?

The Federal Data Protection Act is regulating the permissibility of collection, processing and use of personal data by means of data processing systems. Telecommunications service providers are only allowed to collect, process and use personal data if (section 4, Federal Data Protection Act):

  • The person concerned explicitly agreed to such data collection, processing and use.

  • It is otherwise permissible by law.

In addition to the general rules of the Federal Data Protection Act (Bundesdatenschutzgesetz) (BDSG), there are specific data protection regulations applicable to the telecommunications sector (sections 88 and 91 et seq., Telecommunications Act (Telekommunikationsgesetz) (TKG)). The TKG regulates issues, including:

  • Obligation to obey the principle of "confidentiality of communication" (section 88, TKG), which states that the content and detailed circumstances of telecommunications, particularly whether or not a person is or was engaged in a telecommunications activity (including unsuccessful call attempts), are subject to telecommunications privacy.

  • Obligation to provide specific information to telecommunications user (section 93, TKG).

  • Specific requirements to obtain user consent via electronic means (section 94, TKG).

  • Collection, processing and use of basic data, traffic data and location data (section 95, 96 and 98, TKG).

  • Data protection rules regarding itemised billing (section 99, TKG).

  • Calling number identification and suppression (section 102, TKG).

  • Directory information and provision of information (section 104 and 105, TKG).

Where the telecommunications provider is to be regarded as a telemedia provider as well, the Telemedia Act (Telemediengesetz) (TMG) also contains additional regulations on data protection, relating to issues such as:

  • Inventory data (section 15, TMG).

  • Usage data (section 16, TMG).

Several years ago legislation had created a requirement to retain communication data in accordance with Directive 2006/24/EC on the retention of data in connection with the provision of publicly available electronic communications services or of public communications networks (Data Retention Directive). However, the provisions regulating data retention have been declared void by the German Federal Constitutional Court in its three decisions dated 2 March 2010. Now that the Data Retention Directive itself has been found void by the European Court of Justice (8 April 2014, in Digital Rights Ireland Ltd C-293/12 and Seitlinger C-594/12), there is no further obligation to implement the Data Retention Directive. However, in a second attempt, a new bill concerning data retention rules has recently been passed through the legislative procedure. The current Act on Introduction of Obligation to Store Data and on Introduction of a Maximum Period of Storage of Traffic Data is in force since 18 December 2015, and will oblige the network providers to store following data from 18 June 2017:

  • Location data of the participants of all mobile phones at the beginning of the telephone call (storage period of four weeks).

  • Location data at the beginning of a mobile internet usage (storage period of four weeks).

  • Phone numbers, time and duration of all phone calls (storage period of ten weeks).

  • Phone numbers, send and receive time of all short messages (storage period of ten weeks).

  • Assigned IP addresses of all internet users, and time and duration of internet usage (storage period of ten weeks).

There is also an obligation for the telecommunications service providers to store data required for the provision of services, for example:

  • The telephone numbers.

  • The name and address of the allocation holder.

  • The effective date of the contract.

  • The date of birth in the case of natural persons.

  • In the case of fixed lines, additionally the address for the line, even if the data is not required for operational purposes.

  • Where known, the date of termination of the contract is also stored.

Accordingly, the authorities can access the data, if required (section 111 et seq., TKG).

In the event of intentional or negligent breach of the above regulations the service provider commits an administrative offence that may be subject to a fine according to section 149 of the TKG.

 
16. What are the rules relating to the interception of calls? How and on what grounds can government authorities require disclosure of communications data? What are the penalties for breach of these rules?

The interception of calls is regulated by:

  • Sections 100a-b of the Code of Criminal Procedure (Strafprozessordnung) (StPO).

  • Sections 3, 5 and 8 of the Act for Limitation of the Confidentiality of Correspondence, Post and Telecommunications (Gesetz zur Beschränkung des Brief-, Post- und Fernmeldegeheimnisses, Artikel 10-Gesetz).

  • Sections 23a-c and 23e of the Act for the Customs Investigation Services (Zollfahnungsdienstgesetz) (ZFdG).

  • Section 20l of the Federal Criminal Office Act (Bundeskriminalamtgesetz) (BKAG) and some additional regulations of the individual federal states.

Telecommunications can be intercepted and recorded without the knowledge of the persons concerned if either:

  • Certain facts give rise to the suspicion that a person, either as perpetrator or as inciter or accessory, has committed a serious criminal offence (as defined in the Code of Criminal Procedure).

  • Where there is criminal liability for an attempt, a person has:

    • attempted to commit the offence;

    • the offence is one of particular gravity in the individual case; and

    • other means of establishing the facts or determining the accused's whereabouts would be much more difficult or offer no prospect of success.

The above requirement is in the Code of Criminal Procedure, and further acts described in the first paragraph of the Code regulate similar requirements in their application area (for example, customs surveillance).

The related technical and organisational requirements imposed on the telecommunications services providers are regulated by the Telecommunications Monitoring Ordinance (Telekommunikations-Überwachungsverordnung) (TKÜV).

Where the telecommunications service providers do not comply with interception and provision of information orders, regulatory and coercive actions can be taken, generally meaning certain fines can be imposed on the telecommunications service providers.

 
17. Are there any network or data security obligations imposed on communications providers?

The security obligations of the communication providers are (section 109, Telecommunications Act (Telekommunikationsgesetz) (TKG):

  • Every communications service provider must make appropriate technical arrangements or take other measures to protect:

    • privacy of telecommunications and personal data; and

    • telecommunications and data processing systems against unauthorised access.

    The current state of technology is to be considered in assessing what constitutes "appropriate".

  • Any person operating telecommunications systems that provide publicly available telecommunications services must also make appropriate technical arrangements or take other measures to protect telecommunications and data processing systems against any faults that would result in considerable harm to the telecommunications networks and against external attacks and the effects of natural disasters. Attention must be given to the state of the art and the physical location of its own and shared network elements. Technical arrangements and other safeguards are deemed reasonable if the technical and economic effort required is proportionate to the importance of the rights to be protected and to the importance of the facilities to be protected for the general public.

  • Any person operating telecommunications systems to provide publicly available telecommunications services must nominate a security commissioner and draw up a security concept setting out:

    • which telecommunications systems are to be used and which publicly available telecommunications services provided;

    • any potential hazards; and

    • which technical arrangements or other safeguards have been made or put in place or are planned to meet the obligations in the two bullet points above.

The Federal Network Agency (Bundesnetzagentur) provides additional and more detailed information regarding the required security measures. Such information can be accessed via the Federal Network Agency website (German language only).

 

Price regulation

18. How are prices and charges regulated?

Telecommunications prices and charges are regulated by the Federal Network Agency (Bundesnetzagentur) in accordance with the provision of the Telecommunications Act (Telekommunikationsgesetz) (TKG). The TKG allows for two different kinds of price and charges regulations:

  • Access price regulation. Generally (with exemptions), the rates charged by a public telecommunications network operator with significant market power for access services or facilities under access obligations under section 21 of the TKG (see Question 8) are subject to approval by the Federal Network Agency (section 30 et seq., TKG). A public telecommunications network operator with significant market power cannot charge any rates other than those approved by the Federal Network Agency. Any agreements for services containing rates other than those approved will become effective subject to the proviso that the approved rates apply in place of the agreed rates.

  • End user price regulation. Where facts warrant the assumption that obligations imposed in connection with access issues or with carrier selection and carrier pre-selection accordingly would not result in achievement of the regulatory aims of the TKG, the Federal Network Agency can order the rates that companies with significant market power charge for retail telecommunications services to be subject to approval (section 39, TKG). However, the Federal Network Agency limits this approval requirement to those markets where sustainable competition is not expected to develop in the foreseeable future.

 

Telephone number and subscriber management

19. How are telephone numbers allocated and managed in your jurisdiction?

Telephone numbers are allocated by the Federal Network Agency (Bundesnetzagentur) on request. The Federal Network Agency provides these telephone numbers in accordance with the:

  • Telecommunications Act (Telekommunikationsgesetz) (TKG).

  • The Telecommunications Numbering Ordinance (Telekommuníkationsnummerierungsverordnung) (TNV).

  • The Telecommunications Numbering Fees Ordinance (Telekommunikations- ummerierungsgebührenverordnung) (TNGebV).

The allocation method for geographic numbers is described in detail in an administrative instruction that is available at the Federal Network Agency's website.

The aim of the allocation policy of the Federal Network Agency is to provide a non-discriminatory and technology neutral solution with sufficient availability of geographic telephone numbers, while also protecting the interests of consumers.

The Federal Network Agency publishes an annual numbering policy stating the current development of the telecommunications market and the possible implications of such current development on telephone number allocation practice. The numbering policy for the year 2015 is available at the Federal Network Agency's website.

 
20. Does access have to be provided to certain services, such as the emergency services and directory enquiries?

Telecommunications service providers must provide a number of different services. The most important of such services are:

  • Emergency calls (section 108, Telecommunications Act (Telekommunikationsgesetz) (TKG)). Any person offering publicly available telephone services must provide all users with access to emergency services by using, free of charge, the single European emergency call number "112" and the additional national emergency call numbers determined in the respective ordinance (Emergency Calls Ordinance (Notrufverordnung) (NotrufV)). Any person operating telecommunications networks used for publicly available telephone services must transmit to the local emergency service centre, without undue delay, emergency calls, including:

    • the calling line identity or, where the calling line identity is not available, the data required to prosecute any misuse of emergency calls as provided in the Emergency Calls Ordinance; and

    • the information required to identify the location from which the emergency call originated.

  • Grid interconnection (section 16, TKG). On request, every telecommunications service provider must submit to other providers an offer for grid interconnection (see Question 8).

  • Universal Services (section 78 et seq., TKG). Where there is insufficient supply, the telecommunications providers must ensure the provision of the "universal services", which are a minimum set of services to the public with a certain defined quality and to which all end users must have access at an affordable price regardless of their place of residence or business. "Universal services" are services regarded as indispensable for the public as basic services (see Question 8).

Telecommunications service providers with significant market power must provide additional services (for example, ensuring access to their grid for the benefit of other service providers according to section 21, TKG). See Question 8.

 
21. Are there regulations relating to specific consumer services, such as acquiring and transferring subscribers, number portability, complaint handling, and nuisance and silent calls?

There are specific regulations that ensure the provision of a higher level of services to consumers or other recipients of the services. These regulations refer to providers of publicly available telecommunications services and include (section 43a et seq., Telecommunications Act (Telekommunikationsgesetz) (TKG)):

  • Provision of certain information to the consumers in a clear and transparent way including the:

    • name and address of the service provider;

    • main technical features of the provided services;

    • possible support and maintenance services;

    • period of time until the services will be available to the consumer;

    • general contractual information (prices and term of the contract); and

    • information about inclusion of consumer data in public directories.

  • An invoice can be disputed by the service recipient during a period of a minimum eight weeks, starting with receipt of the invoice.

  • Suspension of services due to non-payment is possible only if the amount outstanding exceeds EUR75 and the service provider has notified the service recipient about the suspension with at least two weeks' prior notice.

  • Service recipients can request that their information is inserted into public directories free of charge.

  • In the event of a change of service provider, the services provided to the recipient cannot be suspended for longer than one day.

  • In the event of a change of service provider, the old and the new service providers must ensure that the service recipient can retain his old number (only within the same geographical location if the number refers to a fixed geographic number).

  • In the event of relocation of the consumer, the service provider must ensure the provision of services at the new location without any amendments to the agreed contract (a relocation fee may be charged), if its services are usually provided at the new location as well.

  • The service recipients can initiate specific arbitration proceedings at the Federal Network Agency (Bundesnetzagentur) in the case of a breach of certain obligations of the TKG or certain European regulations.

  • The service recipient can request that the service provider bars the transmission line from dialling specific numbers (for example, premium rate numbers).

The Federal Network Agency also provides a special complaint service where consumers can submit their observations (for example, numbers from automatic dialling machines), which will be evaluated by the Federal Network Agency and can lead to blocking of such dialling number.

 
22. Are consumer telecommunications contracts subject to specific regulations?

Consumer telecommunications contracts are subject to the usual regulations of general terms and conditions, as well as other general legal regulations, for example, unfair competition regulations of the Act Against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb) (UWG) that apply to service contracts.

The following regulations also apply to telecommunications contracts with consumers (section 43a et seq. , Telecommunications Act (Telekommunikationsgesetz) (TKG)):

  • Additional information obligation. Service providers must provide consumers with detailed information regarding the conditions of the agreement. As well as the usual information (for example, pricing, identity of the contractual partner, term, termination possibilities, liability information, and so on), the following telecommunications specific information must be provided:

    • key technical details for the service;

    • expected duration until the line is switched to live;

    • requirements and costs of any change of provider;

    • required steps for any out-of-court arbitration; and

    • information about inserting consumer's data into public directories.

  • Term. The initial term of a telecommunications services contract with a consumer cannot exceed 24 months (the general rule for terms and conditions under the law). However, as a specific of telecommunications services, a provider must offer consumers agreements with a maximum 12 months maximum term, as well.

  • Limitation of liability. Where a provider of a publicly available telecommunications services is liable for compensation of economic loss with respect to an end-user and the loss is not caused intentionally by the provider, its liability is limited to a maximum of EUR12,500 per end user and EUR10 million for the aggregated damage claims.

 
23. Are there restrictions on the use of Voice over IP technology in your jurisdiction?

The regulation framework is in general terms neutral to used technology. Therefore, no specific restrictions for use of Voice over IP (VoIP) technology exist.

The Federal Network Agency (Bundesnetzagentur) has stated that generally VoIP is recognised as a proper telecommunications technology and can be used. However, the Federal Network Agency regards certain specific VoIP issues as not yet resolved (for example, questions of geolocation of emergency calls for nomadic VoIP use and allocation of telecommunications to a specific user in surveillance scenarios).

 
24. Are there regulations relating to the maintenance of net neutrality in your jurisdiction?

The government can introduce a legislative ordinance regulating net neutrality (section 41a, Telecommunications Act (Telekommunikationsgesetz) (TKG)). There are currently no specific German regulations, but in 2015 a new EU regulation on a European single market for electronic communications, Regulation (EU) 2015/2120 laying down measures concerning open internet access (Open Internet Access Regulation), came into force and amended Directive 2002/22/EC on universal service and users' rights and Regulation (EU) 531/2012 on roaming on public mobile communications networks within the Union. The Open Internet Access Directive establishes common rules to ensure equal and non-discriminatory treatment of traffic in the provision of internet access services and related end-users' rights However, it has come under criticism because of some perceived loopholes in the rules; ISPs can agree deals with content providers to deliver services of enhanced speed and quality in some cases, provided that it has no impact on the "open internet".

Although not a regulation itself, the Federal Network Agency (Bundesnetzagentur) regards individual zero-rating offers as a violation of net neutrality.

 

Outsourcing and telecommunications

25. Are there specific regulations for the outsourcing of telecommunications services or the management of these services?

There are no specific regulations for the outsourcing of telecommunications services or the management of these services. However, any outsourcing of telecommunications services usually raises data protection and privacy issues, which are to be accessed and evaluated in each individual case.

 
26. Briefly set out the current trends in outsourcing transactions in the telecommunications sector.

The current trends in outsourcing transactions in the telecommunications sector are the following:

  • Shift of the operational design of the outsourced telecommunications services from the service provider to the customer.

  • Move from multi-provider purchasing to exclusive contractual agreements.

  • Advantages of scale.

  • Change in the motives for outsourcing. A simple cost reduction is a growing driver.

 
27. Who are the key providers of outsourced telecommunications?

The outsourcing of telecommunications services can be split into different service fields that are attended by different key market players:

  • The basic telecommunications services. The below companies are the key providers of outsourced telecommunications services (including mobile, wireless and broadband services). It is not surprising that these are the companies that own the crucial telecommunications infrastructure:

    • Telefónica Germany;

    • Vodafone; and

    • Deutsche Telekom.

  • Additionally, further companies provide outsourced telecommunications services through the infrastructure of the above network and grid operators. These companies include:

    • IBM;

    • T-Systems (part of Deutsche Telekom group);

    • Hewlett Packard; and

    • Atos IT Solutions.

  • The activity area of various further companies include the outsourcing of specific customer tailored services such as managed WAN services, field force services and CRM services. The key service providers in these areas include (but are not limited to):

    • Accenture;

    • IFS Deutschland (part of the wordwide Industrial & Financial Systems Group);

    • ZTE Deutschland (part of ZTE Global); and

    • Cisco.

 
28. What are the current technologies influencing or affecting outsourcing by telecommunications operators?

The current technologies influencing and affecting outsourcing by telecommunications operators are (as with the whole of Europe) the following:

  • Cloud based services and connected services (for example, XaaS). In this way, key issues being discussed refer to data protection questions (for example, questions of data storage outside the EU).

  • Bring Your Own Device questions on possible compatibility issues (in particular, Android-OS and Linux system fragmentation).

  • Technologies related to implementation of customer self-care services, including digitalisation and automatisation of customer access to companies' databases.

 
29. From a contractual perspective, what are the key issues in a typical telecommunications outsourcing transaction in your jurisdiction?

As seen from the contractual perspective, the key issues on telecommunications outsourcing transactions are most commonly the usual matters experienced in commercial sourcing contractual negotiations. However, the following issues are more frequently on the agenda of the parties in telecommunications outsourcing agreements:

  • Milestones, deadlines, service requirements and deliverables.

  • Responsibility, duration and costs for the transition and implementation phase.

  • Agreement on KPIs and service levels.

  • HR-issues, in particular questions regarding Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE).

  • Data protection questions on data transfer outside the EU. In particular, questions regarding the transfer of or allowing access to real life traffic data, including the application of the principle of "confidentiality of communication" (section 88, (Telekommunikationsgesetz)).

  • Data protection questions on data storage outside the EU, including responsibility regarding obtaining of required consent from concerned individuals and establishment of additionally required agreements.

  • Inclusion of further service recipients that are not party to the initial agreement.

  • Issues and responsibility of disaster recovery and insolvency.

 

Online resources

Federal Network Agency

W www.bundesnetzagentur.de

Description. Official website of the Federal Network Agency containing regulations, guidelines and general information.

Federal Law Gazette

W www.gesetze-im-internet.de

Description. Official website of the government containing the relevant, official and up-to-date legislation. Most of the Acts discussed in this chapter are only available in German. The government provides unofficial translations to some of the Act, albeit for guidance only:



Contributor profiles

Dr. Florian von Baum, Partner, Head of German IT/IP and Outsourcing

Pinsent Masons Germany LLP

T +49 89 20 30 43 537
E florian.vonbaum@pinsentmasons.com
W www.pinsentmasons.com

Professional qualifications. German, lawyer

Areas of practice. Telecommunications; outsourcing; IT; IP; data privacy; software; telecommunications; automotive; biotech; life sciences.

Recent transactions

  • Advising a German telecommunications operator on a merger with another German telecommunications operator.
  • Advising a German automobile manufacturer on an SAP implementation and integration project.
  • Advising a German telecommunications provider in the carve-out and sale of various business units and networks.
  • Advising a US service provider on a business process outsourcing for a German customer.
  • Advising a mobile telecommunications service provider on several outsourcing and out-tasking transactions.
  • Advising a Chinese-German software developer in relation to software development with a Tier 1 automotive supplier.
  • Advising a US-based software company in respect of a cloud project.
  • Advising a supplier of sound systems on various projects with German automotive OEMs.
  • Advising a mobile operator in respect of network-sharing projects.
  • Advising a German service provider on various outsourcing projects in the logistics sector.
  • Advising various online and mobile platforms on issues regarding data protection and privacy.
  • Represented companies in numerous technology transactions, including a wide range of outsourcing, development, co-operation and strategic alliance projects.

Languages. English, German

Publications. Numerous publications and presentations regarding IT and data protection law, including co-author of Handbuch des Fachanwalts Informationstechnologie (edited by Lehmann/Meents).

Dr. Igor Barabash

Pinsent Masons Germany LLP

T +49 89 20 30 43 540
E igor.barabash@pinsentmasons.com
W www.pinsentmasons.com

Professional qualifications. German, lawyer

Areas of practice. Telecommunications; IT; IP; commercial; competition; technology; life sciences; biotech; telecommunications; IT fields; regulatory; trade mark; patent law; unfair competition; copyright; design law.

Non-professional qualifications. Business Mediator (CVM)

Recent transactions

  • Advising a global software developer on day to day legal matters in respect of procurement and distribution.
  • Advising Redefine International Plc on the purchase of three shopping centres in Berlin, Hamburg and Ingolstadt from an Irish-Luxembourgish fund with a total deal value of about EUR200 million.
  • Advising the start-up incubator of a German telecommunications company.
  • Advising a US service provider in the context of an outsourcing project concerning the procurement of facilities management services by a German business.
  • Advising a market leading German application publisher on its exclusive marketing arrangements, as well as supporting day-to-day legal matters.
  • Advising a US software company in respect of a cloud project.
  • Advising a leading seed developer regarding various research and development and distribution projects.
  • Advising several online and mobile platforms in respect of e-commerce and distribution matters.
  • Advising clients in the development of IP-strategies and the performance of IP due diligence.

Languages. English, German, Russian

Professional associations/memberships. Member, German Association for Protection of Industrial Property and Copyright (GRUR); member, German-Russian Lawyers Association (DRJV).

Publications.

  • Citation of pictures on the internet (Das Bildzitat im Internet), Munich, 2010.

  • Registration duties concerning the discarded electric devices register (Registrierungspflichten beim Elektroaltgeräteregister), GRUR-RR 2011, 424.

  • Ancillary Copyright for Publishers: The End of Search Engines and News Aggregators in Germany, EIPR, 2013, 243.


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