The political sector and regulatory authorities influence the development and availability of the network infrastructure, technologies and services. Not only does this directly impact the competitiveness of telecommunications companies, it also impacts business in general, which relies on having a fast network infrastructure as well as state-of-the-art telecommunications services. In addition to economic factors, networks and services are of considerable importance for maintaining a sense of community in society. That is why we engage in active, ongoing dialog with interested stakeholders from politics and the general public.
Many governments, parliaments, authorities and non-governmental organizations worldwide consider Deutsche Telekom to be a valued dialog partner when it comes to ICT and innovation. As a company seated in Germany, we are in particularly high demand with institutions located in Germany. We have also set up offices in Brussels to ensure constant dialog with the institutions of the European Union as well as associations and other community organizations. We engage in active dialog with similar institutions in countries in which Deutsche Telekom is active, particularly in the European markets and in the United States.
Our partners from parliaments, governments, and non-profit organizations need to uphold their independence and integrity. This principle is codified in Deutsche Telekom's Guiding Principles. For example, they prohibit donations to political institutions in Germany as well as non-transparent attempts to exercise influence. Instead, these guidelines recommend basing our political communication on facts, expertise, credibility, and integrity. In the interest of credibility, Deutsche Telekom is also registered in the public Transparency Register for lobbyists in Brussels, where all required information is documented. This is the basis for recipients to experience information provided by Deutsche Telekom as authentic and trustworthy, so that it can be assimilated in opinion-building processes in the political arena and society.
Deutsche Telekom' lobbying activities are based on ethical principles and legal regulations. Every Group employee is required to comply with Group policies. These policies form the basis for open, transparent lobbying that is in compliance with the law. These regulations also apply to the representation of our interests within the scope of collaboration in associations and any relevant committees.
Investment incentive needed for broadband networks
Fast broadband networks have become a central infrastructure feature as well as a factor for site selection and success in all business sectors. Germany needs a high-performance, reliable and secure broadband infrastructure, ideally with nationwide coverage. Deutsche Telekom has been making considerable contributions for years by investing heavily in the infrastructure for fixed-network and mobile Internet. For years the company has been investing billions of euros in broadband in Germany and has been more involved than any other company in closing gaps in broadband coverage, particularly in rural areas.
Building out nation-wide, next-generation access networks (NGA) requires joint efforts of politics and business. In view of the ambitious broadband goals at both the national and European level, the main purpose of telecommunications and regulatory policies needs to be improving planning reliability and, in particular, the financial power of companies willing to invest in the market as well as maximizing the potential for economically viable network build-out by the private sector using all technologies available. In areas where broadband roll-out is not economically feasible, it is up to the public sector to develop technology and provider-independent development programs to help finance these efforts. Forward-thinking regulatory policies need to actively support investment in modern broadband networks and prevent unnecessary financial burdens and red tape for the network operators investing in networks. The successful liberalization of the telecommunications market has created self-sustaining, functional infrastructure competition in Germany. We need to continue to strengthen the investment capacity and competitiveness of the German and European telecommunications industries in response to global competition.
As the result of many years of regulatory policy that has focused exclusively on price reduction, the industry is lacking the funds needed to realize the investment being demanded by the political sphere. Regulated charges need to reflect cost and price trends and create effective incentives to invest in new networks. Regulated companies need price flexibility, particularly for NGA networks that are set up under competitive conditions. This is the only way to guarantee competitiveness and full capacity utilization and, therefore, economic efficiency.
Updating regulatory policies continues to be an important task. In view of the fact that the competitive landscape, the technologies and demand are all highly dynamic, market regulation needs to be reviewed, modified and, in some cases, reduced. Regulatory intervention need to be based on proven market failure to keep them from unnecessarily limiting innovative rate plans and products. Open access needs to be embraced as a basic principle so that competition and the ability to choose are guaranteed for consumers in connection with all network build-out projects.
Regulatory policy needs to be rebalanced along the entire digital value chain. In view of the fact that the Internet and telecommunications market are converging rapidly and in light of the growing market power of a few global Internet players, sector-specific regulation of telecommunications is creating more and more of an imbalance. The same laws and regulations that apply to telecommunications companies also need to apply to Internet companies providing the same services. The objective here needs to be creating equal competitive conditions and enabling fair distribution of the financial burden involved in broadband roll-out. It is also high time that the European legal framework for telecommunications, which has been in place since 2002, be revised in detail to address the pressing issues that the sector currently faces.
Protecting the open Internet
The topic of net neutrality continues to draw political attention. EU Commissioner Neelie Kroes, who is responsible for the European ICT sector, presented a draft regulation to harmonize the legal framework to the EU Parliament in September 2013. This "EU telecoms package/digital single market package" also aims to harmonize regulation on net neutrality throughout the EU. Rules on traffic management, transparency and allowing or prohibiting online commercial product and service differentiation are planned.
Deutsche Telekom remains committed to preserving an open Internet. Content and services will continue to be available online in accordance with the best effort principle, meaning they will be available to the extent permitted by the available resources. Deutsche Telekom will continue to expand and optimize its infrastructure so that we are able to cope with rapidly increasing amounts of data traffic and constantly upgrade our network. This is the only way for us to meet our customers' increasing demands and live up to the requirements of online content and application providers who also want to provide their services in high quality in the future. However, telecommunication networks cannot be operated without an effective network management system.
That is why Deutsche Telekom is developing business models based on the "best effort" Internet principle that online businesses can use to offer innovative services that pose specific demands on transmission quality and quality of service. This will include managing the rapidly growing volumes of different types of data streams in the net. Content will in no way be controlled. Deutsche Telekom supports the freedom of the Internet and does not influence user or provider content in any way. Deutsche Telekom will continue to take a non-discriminatory approach to marketing services with different quality-of-service levels in competition with other network operators. This gives consumers greater choice and guarantees a high quality level.
One of Deutsche Telekom's aims is to become the most highly regarded service company in the industry. That is why we again gave high priority to consumer-related topics in 2014. We further strengthened internal functions dealing with consumer relations in order to improve exchange between Deutsche Telekom's product and service development areas and our external stakeholders from politics and civil society.
Central topics in legislation and in stakeholder dialog as well as efforts to create voluntary regulations for the industry beyond legal provisions included:
- Maintaining consumer data privacy, for example in the online advertising business,
- Improving comprehensive, cross-technology protection of young people at national and EU levels, in particular by continuing to advance a comprehensive, Group-wide minimum standard within the EU and continuing to engage in dialog with organizations involved in the protection of minors both nationally and at EU level,
- Improving customer service standards and customer protection in the telecommunications sector, for example when switching providers for fixed-network and mobile services, and
- Encouraging improved transparency toward our customers and in collaboration with the entire industry.
Deutsche Telekom once again made progress in 2014 in regard to switching fixed-network providers - both internally as well as in collaboration with other telecommunications providers in Germany. The goal is to make it easier for both fixed-network and mobile consumers to switch providers without any service interruptions. In all these areas, Deutsche Telekom stands for a constructive and solution-oriented approach that is geared to both the consumers' interests and the interests of our company.
In order to provide better transparency to customers, Deutsche Telekom took the initiative in 2014 and revised its rates in Germany (see the new Magenta 1 portfolio). Deutsche Telekom thus took an important step in improving transparency and simplifying its products and communication, giving customers a clearer picture of what they can expect from their fixed-network and mobile rate plans.