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Germany in the slow lane

Where deregulation of industry is concerned, Germany is definitely not a part of fast-track Europe.The German government's announcement yesterday that it would liberalise the country's telecoms industry by the target date of 1998 was a welcome indication of Bonn's resolve, but did little more than confirm what the European Union had already agreed.

Under its Green Paper on telecoms deregulation, member countries must open their markets to competition by January 1, 1998, but the Commission had been hoping governments would move more quickly. Germany has decided, instead, to take all the time allowed to it, passing the required legislation in mid-1996 and granting the first licences to competitors in 1997.

All the same, by allowing an unlimited number of suitably qualified providers in the fast-growing and fast-changing telecoms market, the German government has shown that it supports not only liberalised service provision but full competition in infrastructure. That has gone down well in Brussels.

The Commission argues quite sensibly that there is no point in moving from state monopoly to private monopoly by allowing large companies to dominate infrastructure and obliging service providers to pay to have access to the network. In order for liberalisation to bring benefits to consumers, competition needs to be encouraged across the board.

The Commission does have some levers to pull, for example in its current review of the proposed joint venture between Deutsche Telekom and France Telecom to provide telephone network services under the name Atlas. Brussels is seeking assurances that huge players will not dominate the liberalised market, and is prepared to use its powersto achieve its goals. Unofficially, of course, the Commission may use the review as a bargaining chip to extract quicker and broader commitments to real competition. That approach may help ensure that the consumer truly does benefit.