EU gives Germany final warning over 'regulatory holiday' for D Telekom

(BRUSSELS) - The European Commission on Wednesday issued a final warning before taking the German government to court over a "regulatory holiday" granted to Deutsche Telekom to build a high-speed Internet network.

Commission spokesman Martin Selmayr said the European Union's competition watchdog had decided to give Berlin a month to repeal a new telecommunications law or face action before an EU court.

"If in this time the law ... is not changed and brought in line with (EU) community law then the Commission will in June decide to go to court," he told journalists.

The European Union's executive arm says that the new law, which went into effect in February, effectively exempts from competition a fast Internet access network that Deutsche Telekom is building.

Deutsche Telekom, about 32 percent of which is owned by the German state, enjoys a broad share of the national telephone market, controlling the access of 9,400,000 lines in Germany out of a total of 12,900,000 lines.

However, there is considerable scope for the former state monopoly to strengthen its hand in the Internet access market with Germany having a broadband penetration rate well below other leading EU countries.

The Commission estimates that only 16 percent of the German population has access to broadband Internet access compared with nearly 30 percent in Denmark and The Netherlands.