Network agency starts proceedings
Cell phone network operators should pay for dead spots for the first time
November 20, 2023, 5:22 a.m
The German cell phone network has gaps – people from less populated areas can tell a thing or two about it. In order to get the network operators to make more efforts to close the holes, the supervisory authority is opening a fine procedure for the first time.
Because of weaknesses in mobile communications, the Federal Network Agency is taking action against Germany’s mobile phone network operators Deutsche Telekom, Telefónica (O2) and Vodafone for the first time with fines. This was done “due to culpable failure to fully meet the pension requirements on time,” according to a letter from the authority. The proceedings, which opened in September, were not yet publicly known.
The companies can now submit statements. A decision will be made next year. In separate proceedings initiated at the same time, companies also face so-called penalty payments.
The network operators are of the opinion that they have not violated the expansion requirements. They cite an exception rule: Where expansion was not possible for legal and factual reasons – for example because no one wanted to rent a property on which a radio mast could be set up – the requirement is considered fulfilled even without a network. However, the network agency is of the opinion that this justification does not apply in some cases – and that antennas could have been installed in some places.
Fines would be a novelty
There are 500 4G dead spots in which none of the three network operators enable reception of 100 megabits per second. These white spots should have disappeared by the turn of the year. But not all companies managed to do this. In addition, the providers still do not have a good network in some federal highway tunnels, even though it is required – this is also the subject of the proceedings.
According to industry sources, the number of violations is very low. If fines are ultimately imposed, they should be correspondingly low. The opening of the procedure is seen as a signal to the industry to make more effort in expanding and to fully comply with supply requirements. In the past, the network agency turned a blind eye to similar cases. None of the three network operators complied with the expansion obligations resulting from the 2015 auction at the end of 2019. There were no fines back then.
Telefónica had great difficulties at the time. At Telekom and Vodafone there were only small deficits. Penalty payment proceedings were initiated against Telefónica in 2020. However, after O2 reached the finish line very late, the process was discontinued.
Weakness in white spots
The network agency left the fine club behind in 2020, but is now swinging it – even though the violations were much greater back then than they are today. This could also be due to Klaus Müller, who was formerly head of the Federal Association of Consumer Advice Centers and has been President of the Network Agency since 2022. In his new role, he continues to be a strong advocate for consumer issues.
It is not the first fine proceedings against telecommunications providers, but the first against established network operators. Since the spring, the network agency has been taking action against the newcomer 1&1, which is currently setting up its own mobile network and wants to launch it soon. For this purpose, 1&1 auctioned frequencies for the first time in 2019. The company should have activated 1,000 5G locations by the end of 2022. In fact there were five. The outcome of the proceedings is open.
Companies need radio frequencies in different bands for their networks. When awarding the contracts, the federal government sets a minimum quality level to which the networks must be brought. Companies in every federal state had to supply 98 percent of households with at least 100 megabits per second by the end of 2022. Telekom, Vodafone and O2 fulfilled this central part of the catalog of requirements. There were also requirements for traffic routes and the aforementioned white spots – the network agency is convinced that the companies were showing weaknesses in this regard.
Exact figures as to how many white spots and tunnels are considered to be unprovided for are not known. A spokesman for the network agency does not want to comment on the subject of fine proceedings. The companies also do not disclose any figures when asked.
Praise from politicians
Federal politicians and consumer advocates react positively to the initiation of the fine proceedings. The companies apparently were unable to provide the authority with any plausible reasons why the expansion obligations had not been fully complied with, says FDP member of the Bundestag Reinhard Houben. “The draft of a fine notice is therefore only logical.”
Praise also comes from the Social Democrat Johannes Schätzl. “Supply requirements only make sense if they are consistently enforced and penalties follow if requirements are not met,” says the Bundestag member. The Green Maik Außendorf calls the non-compliance with the requirements “annoying”. The companies would have to fulfill their obligations. “The imposition of fines by the Federal Network Agency is an important signal in order to enforce the supply requirements.”
The CSU politician Reinhard Brandl calls the initiation of the procedure “absolutely right”. Consumer advocate Felix Flosbach also welcomes the network agency’s tougher approach. If the authority now controls the network requirements more strictly and punishes offenses, it will help consumers – “today and in the future”.
The companies, in turn, point to the great progress they have made in network expansion. After companies invested billions, the networks are actually significantly better than they were a few years ago. However, the fine procedures are an indication that there are still problems in some places.