American Chamber of Commerce in Germany (AmCham Germany)
Germany's new Telco Act will hurt Foreign investors (will be distributed simultaneously in the United States)
Berlin (ots) - This week will decide whether Germany is ready for the Broadband world: Politicians and officials will apply the finishing touches to the new Telecommunications Act. Negotiations between Germany's upper and lower houses have entered their last phase, and key points requested by Deutsche Telekom's competition are being abandoned by key politicians. Telekom has evidently succeeded in winning over the German Government for its cause, to prevent provisions that would be uncomfortable for the local champion.
Early in April, for example, Deutsche Telekom's chairman of the board, Kai-Uwe Ricke, met with the CDU led Prime Minister of Hesse, Roland Koch. Insiders report that after Mr. Ricke threatened to transfer thousands of jobs out Darmstadt in Hessen, he received assurances that Mr. Koch would support Deutsche Telekom's political interests in the final negotiations to the telecommunications law. This effectively leaves the CDU divided facing a pro-Deutsche Telekom Social Democratic Party (SPD), under the leadership of Chancellor Gerhard Schröder.
"This is simply one more example of Germany's stone age thinking. Instead of seeking to encourage competition and grow the market for all players, Germany's leaders are protecting their national champion. This will only hasten the exodus of foreign investment to Germany, that has already begun," said James Ryan Anderson, Manager Government Relations from the American Chamber of Commerce in Berlin.
Competition still hasn't given up hope for winning support for its key points, although the prospects look dim at the moment. Most importantly, the competition seeks the right to buy telecommunications services from the Deutsche Telekom and then after adding value added products to resale these to the general public. This "resale" clause is the only way to increase the number of services and products on the market, competitors content. 90 % of all Germans connecting to the internet using a fast speed internet connections, or Digital Subscriber Lines (DSL) are customers of the Deutsche Telekom.
"If Germany wants to grow its telecommunications industry and generate new jobs, they can only look to more competition," commented Mr. Anderson. Deutsche Telekom's competitors also demand the legal right to initiate a market abuse case against unfair practices. "If the monopolist can use their market power to shut out the competition, then these competitors must have a way to fight back. A legal right to challenge abusive competition is only fair," said Mr. Anderson. Germany is renown for a tightly woven marketplace, with companies being large stakeholders in one another as to effectively guard the German market from foreigners. With the continuing opening of European markets and greater globalisation, Germany's political leadership has turned to outright protection of its national champions in saving jobs. At the same time, the level of U.S. direct foreign investment to Germany as a percentage of direct foreign investment in Europe has been decreasing over the last few years. With 3,000 members, AmCham Germany is the largest bilateral economic organization in Europe. AmCham Germany's goals include strengthening German-American economic relations and promoting Germany as an investment location. The chamber also serves as a link to investors in the United States.
ots Original Text: American Chamber of Commerce in Germany Internet : http://www.presseportal.de
Contact person:
James Ryan Anderson Manager Government Relations Charlottenstr. 42 10117 Berlin Germany (t) +49 (0)30 288 78 92 4 (f) +49 (0)30 288 78 92 9 (e) jranderson@amcham.de
Original content of: American Chamber of Commerce in Germany (AmCham Germany), transmitted by news aktuell