US cries foul over German telecoms market

The US is set to lodge a complaint this week about the state of the German telecoms market.

At a regular meeting of senior US and EU trade officials, the US will claim that in the last few months, the German telecoms regulator has eased up on the incumbent, Deutsche Telekom. The implication is that since Gerhard Schroeder's left-of-centre Social Democratic Party came to power, Europe's largest telco - which employs tens of thousands of unionised staff - has been given an easier time.

A spokesman for Telekom dismissed the claims. "In our opinion, this is one of the most liberalised markets in the world. There has been no recent change in the regulatory framework, and when it comes to talking about liberalised markets, the Americans shouldn't just talk about Europe, but look closer to home," he said.

In many parts of the US, there is a monopoly on local telecoms services, a situation that has started to change in Germany since deregulation began at the beginning of 1998.

Reports in yesterday's Wall Street Journal quoted US Federal Communications Commission (FCC) chairman, William Kennard saying new entrants to the German market have complained since Schroeder's government took office. In particular, Kennard claimed that Zurich-based Carrier 1 AG said the market is biased in favour of Telekom.

However, the Telekom spokesman said that since the election, no new regulatory appointments have been made, and claimed chief telecoms watchdog, Klaus-Dieter Scheurle remains committed to promoting competition.