No concerns regarding close cooperation in the broadband cable sector

22.07.2002

The Bundeskartellamt has no concerns regarding a close cooperation between Kabel Deutschland GmbH (KDG, a subsidiary of Deutsche Telekom AG in charge of the broadband cable business) and housing companies.

According to a cooperation concept presented to the Bundeskartellamt Deutsche Telekom AG will take on the task of upgrading the housing companies’ cable networks (so-called network level 4). The housing companies will leave their network to KDG for upgrading and restricted use. KDG will be enabled to offer new services via the upgraded network, such as broadband Internet, additional TV channels and games. The housing companies will continue their traditional supply of homes with radio and TV signals.

The Bundeskartellamt informed Deutsche Telekom AG that there were no competition concerns regarding such a cooperation. As the housing companies themselves, in view of their size and financial power, would hardly be in a position to upgrade the network in such a way and to offer new services, they are not in competition with Deutsche Telekom AG.

The President of the Bundeskartellamt, Ulf Böge, welcomed the fact that by means of this cooperation concept the companies had found a way to modernise the broadband cable in line with competition law. The concept showed that a cooperation of companies at different network levels was possible in the interest of consumers without impairing competition.

Background: In contrast to most other countries network levels in Germany are often separated: whereas one company is in charge of transporting the signals up to the properties’ boundaries (so-called network level 3), another company will distribute the signals within the buildings (so-called network level 4).

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