Germany Cuts Unbundling Price
Written by Dave Burstein   

bnetza-1mMatthias Kurth resisted the political power of Deutsche Telekom and cut unbundling rates from kurth10,50 Euro to 10,20 Euro. DT had asked for an increase to 12.50, but an economic model from WIK determined that DT's costs had actually gone down, not up. Germany is seeing some success from unbundling. Vodafone Arcor has over 3M lines and DT not long ago had to drop prices. The result is that Germany is no longer a laggard.

Matthias Kurth via Google Translate, lightly edited "The moderate reduction in the price TAL is the result of a very careful and transparent approval process. In carrying out the statutory audit program it has been shown that since the last decision. One-year civil engineering and copper prices, wbnetzahich are decisive in the calculation of the investment value of the TAL increased. This is outweighed by countervailing effects. The weighted interest rate of capital after tax, at 7.19 percent is slightly lower than previously , with an ROE of just under 15 percent before taxes is used."  Corporate taxes and other financial costs are also down.

Lowering unbundling rates on the now-obsolete copper is a great way to encourage telcos to invest in fiber. Ed Richards has this wrong, offering British Telecom an increase in copper rates that discourages them from a fiber investment. This is particularly unfortunate because BT has a near monopoly across half the U.K.