Annual Report 2015 Stimulating competition. Expanding networks. Protecting the consumer. 00 | BUNDESNETZAGENTUR | JAHRESBERICHT 2012

1 Editorial

2 Ministers’ messages

4 President's message

8 Energy 10 Market watch 14 Security of supply and grid expansion 30 Consumer protection and advice 32 Rulings, activities and proceedings 42 International cooperation

44 Telecommunications 46 Market watch 62 Consumer protection and advice 72 Rulings, activities and proceedings 86 International cooperation

90 Post 92 Market watch 100 Consumer protection and advice 104 Rulings, activities and proceedings 108 International cooperation

110 Rail 112 Market watch 116 Rulings, activities and proceedings 122 International cooperation

124 The Bundesnetzagentur's core tasks and organisation

132 List of abbreviations

136 Contacting the Bundesnetzagentur

137 Imprint EDITORIAL | 1

The Bundesnetzagentur looks back in this annual report on another year's activities directed towards developing infrastructures, promoting competition and protecting the consumer. Modern infrastructures are the lifeblood of our society – they provide the basis for our country's prosperity. We want it to stay that way. And that means encouraging competition in the energy, telecommunications, postal and railway sectors even further. In this context the Bundesnetzagentur ensures accessibility to networks on fair terms, which is key to effective competition. Competition is not an end in itself: a good variety of choice and innovative services benefit consumers too. Given the competition in the markets, consumer protection issues are a frequent focus of our work. The report in front of you presents a clear picture of the Bundesnetzagentur's challenging and diverse range of tasks. 2 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

A message from Sigmar Gabriel, our goal of fast grid expansion. The project promoters Federal Minister for Economic Affairs and the national and regional authorities are all called and Energy upon to achieve cost-effective network expansion in line with the requirements and in good time.

Networks are also a fundamental requirement of Growth and a high standard of living need the founda- highly efficient telecommunications markets and thus tion of a viable and highly efficient infrastructure to be of successful digitisation. That is why we are driving secure in the long term. That is why the federal forward the expansion of high-speed broadband government is working hard at improving framework networks. And it is why the Bundesnetzagentur has a conditions for the investments needed to speed up crucial role to play in the development of both fixed infrastructure expansion – one of our top priorities. line and mobile communications networks, as seen with the spectrum auctions and LTE expansion. With This is particularly true for the further rollout of the its intelligent internetworking strategy the federal energy transition. Today renewable energy already government is putting the spotlight on its interdiscipli- accounts for around one third of our electricity supply, nary approach with regard to digitisation. and its portion will continue to increase in the future. The electricity market needs to balance electricity The German postal market ultimately underpins the generation and consumption even with the growing dynamic development of e commerce, playing a proportion of wind and solar energy. To achieve this, leading role in Europe. We intend to maintain and the market has two functions to perform. One is to strengthen this standing with the support of the make sure that sufficient capacity is readily available, Bundesnetzagentur. and the other is to synchronise use of this capacity so that the right amount of electricity is available at the Both the energy transition and broadband expansion right time. We are working to create this modern are societal responsibilities which are key to our electricity market which guarantees a secure and competitiveness and which require attention at all cost-effective electricity supply even with the increa- political levels as well as a high degree of private sing amount of renewable energy. commitment. Having enterprises make the invest- ments necessary for the future sustainability of the The networks are crucial for the success of the energy networks must therefore continue to be our goal as this transition. Ensuring a secure electricity supply involves will enable us to push ahead with expanding the not only optimising and strengthening our existing infrastructure. networks but also building several thousand kilo- metres of new power lines. The federal government has paved the way for faster network expansion with the acceptance of the people. The new rules for power line construction that came into force at the end of 2015 significantly broadened the scope for underground cabling in both direct and alternating current projects. Now we need to keep up the pace if we want to attain Sigmar Gabriel Federal Minister for Economic Affairs and Energy MINISTERS' MESSAGES | 3

A message from Alexander Dobrindt, - The Bundesnetzagentur works to make sure that the Member of the German Bundestag, provision of rail services runs smoothly and to Federal Minister of Transport and guarantee fair competition for all the players in the Digital Infrastructure market.

- We are the first country in Europe to have auctioned We can see from the life cycle of active progressive the Digital Dividend II spectrum at 700 MHz – with societies that every couple of decades innovations all the proceeds going towards rolling out broadband decide which country remains prosperous and which and connecting rural areas. The Bundesnetzagentur country stagnates. The viability of a society is mea- enabled the auction to take place, carried out the sured by its ability to foster and accommodate inno- award proceedings and – with its coverage obligations vation. Nations that democratise innovations stay at – established the right framework for the national the top because technological progress can only lead to high-speed network. growth, prosperity and employment if it is made accessible to everyone. - We are making the leap to the gigabit society and are equipping our infrastructure for the bandwidths of This requires modern infrastructures. In the past this the future. Innovations like telemedicine, "Industrie meant electricity networks for electrification, roads 4.0" and automated and connected driving need and railways for mobility, and telephone lines and real-time internet connections with minimum radio for telecommunications. Today it means super- latency. Together with the Bundesnetzagentur we are fast broadband. driving forward the international standardisation of next-generation mobile technology. That is why we have launched an initiative for the future to strengthen our infrastructure – and make it This shows just how the Bundesnetzagentur is taking fit for the future growth in traffic, for globalisation and responsibility for our infrastructure and is helping for digitisation. The starting point for our initiative is Germany to remain an active progressive society. our investment ramp-up: we are increasing our funding for infrastructure by 40% to an annual €14bn I would like to thank the Bundesnetzagentur for the in the period up to 2018. This is an absolute record and excellent cooperation. means more money than ever before.

The Bundesnetzagentur is making a vital contribution and is supporting us in organising, coordinating and implementing our initiative, with three main points of focus: Alexander Dobrindt,

- We have negotiated a new performance and financing Member of the German Bundestag, Federal Minister of agreement with Deutsche Bahn: over the next few Transport and Digital Infrastructure years €28bn will be spent on modernising our rail network. 4 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

The President and Vice Presidents of the Bundesnetzagentur (from left to right): Dr Wilhelm Eschweiler, Jochen Homann and Peter Franke PRESIDENT'S MESSAGE | 5

»The term "infrastructure" covers all the elements that are vital for our economy and society to function – for instance transport, energy and telecommunications networks.«

The Bundesnetzagentur has had another eventful and Since May 2015 work has been in progress to convert exciting year. The Bundesnetzagentur's activities in the German gas supplies. The goal is for all areas still energy, telecommunications, postal and railway sectors supplied with low calorific L gas to be converted to H have focused not only on ensuring fair competitive gas, which has a higher calorific value, by 2029. The conditions for undertakings but also on safeguarding switch is necessary because the sources of L gas in the interests of the consumers. Germany and the Netherlands are exhausted. H gas supplies mainly come from Norway, Russia and Great A central issue in 2015 was again the energy transition. Britain. The large gas network operators included a The aim to shut down all nuclear power plants by 2022 planned timetable for the network areas concerned in can only be accomplished if an increasingly large the Gas Network Development Plan 2015. proportion of the electricity demand is met by renewable energy. To be able to transport this energy, Regulation in the telecommunications sector was expansion of the electricity grid at all network levels is marked by the fourth mobile broadband spectrum urgently needed. Alongside this, new paths are being auction held by the Bundesnetzagentur in June 2015. taken to make renewable energy competitive with the The auction was a response to the urgent need for new auctions for ground-mounted PV installations. frequencies to accommodate rapidly growing data Together with a secure supply of electricity, affordable volumes. Wireless data connectivity plays a special role electricity prices are of primary importance to the as it will allow smaller towns and rural areas to be consumers. provided with high-speed internet, making them more attractive as a business location. The federal government has charted a new path with the legislation passed at the end of the year giving After 16 days of bidding in Mainz the three participa- priority to underground cables. The large DC power ting network operators Vodafone, Telekom and lines, which transport the electricity generated in the Telefónica successfully acquired frequencies totalling north to the consumption centres in the south, are now 270 MHz. The spectrum in the 700 MHz, 900 MHz, primarily to run underground instead of overhead. As 1500 MHz and 1800 MHz bands was auctioned for far as possible the underground cables are to run in a some €5bn. A significant portion of the proceeds is to straight line to reduce costs and any intervention in the be used for network expansion. natural surroundings and landscape. At the same time this will lessen the impact on those citizens affected by The Bundesnetzagentur's activities in connection with network expansion, with the aim of increasing the the rollout of vectoring also aim to promote faster population's acceptance of the measures needed to internet access and secure competition. expand the electricity grid.

6 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

»The federal government has charted a new path with the legislation passed at the end of the year giving priority to underground electricity power lines. This will lessen the impact on those citizens affected by grid expansion.«

In 2015 Telekom submitted an application for the offers advice and active support and at the same time deployment of vectoring near its main distribution monitors the availability of basic postal services. frames. The Bundesnetzagentur's competent ruling chamber considered Telekom's application very The Bundesnetzagentur also approved Deutsche Post's carefully in transparent proceedings and in light of the new letter prices as from 1 January 2016, using new aims. A decision is expected in 2016. statutory (price cap) calculation methods. The most important change was the increase in the postage rates Another important topic in 2015 was increasing for standard and maxi letters. This is to enable digitisation, which is also influencing the business Deutsche Post to respond to the decline in postal models of established telecommunications companies volumes caused by electronic communications. The more and more. Over-the-top (OTT) providers such as new stamp prices will remain unchanged for three Amazon, Google and WhatsApp are increasingly years. competing with conventional telecommunications products. In this context the Bundesnetzagentur is Progressive digitisation is also shaping the impact on focusing on developing a regulatory framework which the provision of basic postal services. Given the strikes a balance between the obligations of OTT dynamic developments in the market, viable concepts service providers and conventional telecommunica- for the future design of the postal universal service tions service providers. should be developed. A key factor here is to strengthen consumer protection. The digitisation process once again marked the postal market in 2015. Positive changes were seen in particu- The Bundesnetzagentur once again worked in 2015 to lar in the parcels market. Guaranteed delivery periods, increase competition in the railway sector, monitoring pre-arranged delivery times and nationwide services the sector to ensure that all undertakings are able to were just some of the responses to the growth in online use the railway system on fair terms and at reasonable retail sales. Developments in the letters market were prices. generally stable. The share held by competitors in the rail freight By contrast, problems with letter or parcel deliveries transport segment continued to grow and now stands increased significantly – numerous complaints about at around one third. The share of the regional passen- delivery were received by the Bundesnetzagentur. The ger transport segment held by competitors also Bundesnetzagentur's postal consumer advice team developed positively. Deutsche Bahn AG undertakings PRESIDENT'S MESSAGE | 7

continue to handle most of the traffic in the long- These and many more topics will remain on the distance transport segment. However, several enter- Bundesnetzagentur's agenda beyond the year 2015. But prises have announced that they will be entering the one thing is certain: we shall continue working for market in this segment in 2016. competition and the availability of all the necessary infrastructure for everyone across the country. The shuttle train service to and from Sylt was another issue addressed by the Bundesnetzagentur in 2015. For the first time one of Deutsche Bahn AG's competitors – RDC Deutschland GmbH – sought to establish its own car train service to the island of Sylt and acquire the infrastructure capacity required for its planned service. In 2015 the Bundesnetzagentur was involved in Jochen Homann the allocation of this railway capacity in the course of numerous network access proceedings. As a result of President, Bundesnetzagentur these proceedings RDC will be able to use the line and offer a car train service to Sylt.

»Over-the-top (OTT) providers such as Amazon, Google and WhatsApp are increasingly competing with conventional telecommunications products.« ENERGY

Diverse measures to achieve a single goal — the Energiewende The Bundesnetzagentur is playing an active part in mapping the energy market's new course. Forward-looking planning and regulatory reviews are the instruments we use to act.

Contents

Market watch 10 Security of supply and network expansion 14 Consumer protection and advice 30 Rulings, activities and proceedings 32 International cooperation 42 The course of the Energiewende continues to be the driving force behind the electricity and gas markets in Germany in its fifth year of implementation. The plan is to shut down all of the nuclear power plants in Germany by 2022 and generate the majority of electricity from renewable energy sources by then. To reach these targets, more installations generating electricity from renewable sources must be construc- ted at locations best suited for this purpose. Addition- ally, electricity grid expansion must be pushed forward on all network levels.

In line with the above, the regulatory framework conditions are further being adapted to the energy sector's ongoing transformation. In addition to extensively safeguarding security of supply in the years affected by conversion, new procedures are being introduced with the new auctions to determine the level of financial support for ground-mounted photovoltaic installations. Of course, ensuring that electricity and gas remain affordable for consumers is an important indicator of success here. 10 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Changes in conventional and renewable Market watch energy generation In 2014, there was another In 2014, the year under review, power generation was characterised by further growth in capacity from increase in options for con- renewables. Altogether, growth in renewables capacity amounted to 6.5 GW. Onshore wind and solar energy sumers choosing an elec- recorded the highest growth with increases of 4.0 GW tricity supplier. On average, and 1.9 GW respectively. The total installed generating capacity thus rose to 196.2 GW. This comprises 106.2 consumers could choose GW from non-renewables and 90.0 GW from renew- between 106 suppliers in ables. each network area. The trend Net electricity generation in Germany in 2014 amoun- ted to 581.3 TWh, representing a decrease of 12.2 TWh towards greater choice of compared to the previous year. One particular reason for the decrease is the relatively mild winter. The supplier also strengthened volume of electricity generated using non-renewable for customers in the gas sources decreased by 4.6% compared to the previous year. The largest decreases were recorded in natural gas sector. In nearly 74% of the and hard coal power plant generation. In contrast to past years, the volume of electricity generated using network areas there was a brown coal fell for the first time in 2014.

choice of more than 50 active The net volume of electricity produced from renewable gas suppliers. In over 22% of energy sources increased by 8.4 TWh to 154.8 TWh in 2014. This is an increase of 5.7% compared to the prior the network areas customers year. The largest increase was recorded in onshore wind electricity generation with a volume of 55.9 TWh. had a choice of more than At 60.2%, offshore wind showed the largest percentage 100 active suppliers. increase. This was due to the installed capacity being doubled in 2014.

Household customers and electricity supply The number of electricity suppliers from whom final customers can choose increased again. In 2014, final customers could choose between an average of 106 suppliers in each network area.

The number of household customers switching supplier has increased significantly since 2006. In 2014, a relative majority of 43.2% of household customers concluded a special contract with the local default supplier. The percentage of household customers with a standard default supply contract is 32.8%. Thus the percentage of default supply customers has fallen by 1.3% when compared with the prior year 24% of all household customers are now served by a company other than their local default supplier. MARKET WATCH | ENERGY | 11

Thus the strong position that default suppliers still also decreased slightly. Electricity prices for customers have in their respective service areas weakened further with a special contract with their default supplier and in the year under review. an annual consumption of 3,500 kWh averaged 28.96 ct/kWh and for those with a contract with a Following large increases in the past few years the supplier other than the local default supplier prices for household customers showed a slight 27.85 ct/kWh. In a European comparison only Den- decrease in the period under review. The average price mark had higher electricity prices than Germany. for household customers with a default contract and an Germany's high prices are caused by a heavy burden of annual consumption of 3,500 kWh fell by 1.4% to surcharges, taxes and levies. The total share of the 30.08 ct/kWh. Prices for the two other customer groups state-controlled price components amounts to about 74%. The competitive component of the electricity price found in "energy procurement, supply, other costs 12 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Change in household customer prices per contract category with an annual consumption of 3,500 kWh (volume-weighted average) in ct/kWh 30,1 29,0 27,9

19,9 20,9 18,9

1. April 1. April 1. April 1. April 1. April 1. April 1. April 1. April 1. April 1. April 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

default supply contract special contract with the default supplier contract with a supplier who is not the local default supplier.

and margin" now comprises only about 26% of the Household customers and gas supply average total price. There was a reduction of around 4% One indicator of a greater degree of choice for gas in the "energy procurement, supply, other costs and customers is the number of gas suppliers available per margin" component of the price, leading to a dampe- network area. In 2014, the year under review, the trend ning effect on total prices. The decrease could be towards greater choice of provider strengthened. In related in particular to the reduction in wholesale nearly 74% of the network areas there was a choice of prices. more than 50 active gas suppliers. In over 22% of the

Change in gas prices for household customers with an annual consumption of 23,269 kWh (volume-weighted average) in ct/kWh

7,11 6,14 6,68

6,25 6,41 6,12

1. April 1. April 1. April 1. April 1. April 1. April 1. April 1. April 1. April 1. April 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

default supply contract a special contract with the default supplier and for a contract with a supplier who is not the local default supplier. MARKET WATCH | ENERGY | 13

network areas customers even had a choice of more The slight downward trend in gas retail prices than 100 active suppliers. continued.

The trend of customers switching from their local The average price for household customers with a default supplier to a supplier operating in more than standard contract with the default supplier fell by 1.3% one region has strengthened. The share of household from 7.2 ct/kWh to 7.11 ct/kWh. The average price for customers supplied under a special contract with a household customers with a special contract with their supplier other than the local default supplier is now default supplier also fell by 1.3% from 6.77 ct/kWh to 18.8% after increasing by 5%. 6.68 ct/kWh. The average price for household custo- mers who have a contract with a supplier other than The number of household customers switching the local default supplier sank significantly by over 4% supplier when moving home increased by almost 10% from 6.39 ct/kWh to 6.12 ct/kWh. A comparison with in 2014. Overall, around 1m or 8.4% of all household the gas prices across Europe shows that household customers switched supplier. This is more or less the customers in Germany continue to pay average gas same as in previous years. prices.

Grid overloading: High costs resulting from interventions in plant schedules Renewable electricity feed in and delays in grid expansion present the electricity grid with challenges. Operators are increasingly forced to intervene in the schedules of power plants or restrict the feed-in of renewable energy to prevent overloading of the grid.

The gradual exit from nuclear power and RES genera- tion far from consumption affect flows in the electri- city grid. As a result, the transmission system opera- tors (TSOs) that are responsible for the security of supply and stability of the electricity grid are more frequently required to intervene in the schedules of power plants.

If a line is overloaded, the output fed in by the energy producer ahead of the congestion must be reduced – conversely, an energy producer on the other side of the congestion has to raise output. This intervention power plants. Moreover, the economic and technical measure taken by the network operators is called implementation of the process differs slightly. redispatching. Power plants receive compensation provided they are disadvantaged by such an interven- The Bundesnetzagentur monitors these measures and tion measure. The costs are incorporated in the keeps a record of them in its annual monitoring network charges, meaning that consumers help to report. Due to an increase in network and security bear the financial burden. It is estimated that the costs measures in 2015 the Bundesnetzagentur began to of these and other network and system security publish its findings on a quarterly basis. For the first measures will amount to at least €1bn for 2015. time, a detailed presentation of feed-in management volumes and estimated costs is possible for every Where generation from renewables, mine gas and federal state. Additionally, conclusions from the report combined heat and power are concerned, the same can be drawn on the seasonal fluctuations of all process is called feed-in management. The other name network and system security measures. clarifies, first, that restriction is only admissible if it is not possible to restrict feed-in from conventional 14 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Security of supply and grid The future shape of the electricity market expansion The degree of liberalisation of the European electricity markets and the growth in renewable energy sources The change in the power raise questions as to the future design of the electricity market. The main issue, given declining wholesale generation landscape and prices and the fluctuation in electricity generation delays in expanding the net- from renewable energy sources, is whether the electricity market will be able to guarantee sufficient work place heavy demands electricity at all times to meet demand in the future.

on the power grids. Recent The Bundesnetzagentur has been very involved in the years have seen a particularly discussion about the design of the electricity market, for instance, by playing an active role in discussions of large increase in the scope the Federal Ministry for Economic Affairs and Energy on the electricity market platform and by stating its of security measures for the position on the Green Paper "An electricity market for grid and the system. the energy transition".1 Some of the Bundesnetzagentur's suggestions on developing the electricity market have been included in the draft Electricity Market Act. Hence some key features of the capacity reserve reflect the standby capacity strategy that was developed by the Bundesnetzagentur and introduced into the discussion. As an example, while the capacity required is procured through competitive bidding, it is also kept on standby outside the electricity market and only used once the transmission system operators have concluded all market transactions. This standby capacity is first made use of by the transport system operators to maintain security of supply once all available capacity on the market has been transacted and exhausted, that is to say, in the absence of any market clearing. This allows all market transactions to be carried out without hindrance and without distorting market price signals. The Bundesnetzagentur's suggestions have also been incorporated in the revised reserve capacity arrangements. The latter are necessary to continue alleviating network congestion successfully.

A commitment to permitting prices on the electricity market to be freely set has been anchored in the Electricity Market Act in line with the Bundesnetz- agentur's recommendation. As such, the free setting of prices is a pre-condition for scarcity-induced prices to occur, which in turn are a requirement for capital investment in power plant capacity. If the electricity market is to ensure security of supply, then scarcity- induced prices must be made possible.

1 http://www.bmwi.de/BMWi/Redaktion/PDF/Stellungnahmen/ Stellungnahmen- Gruenbuch/150228-bundesnetzagentur, property=pdf,bereich=bmwi2012,sprache =de,rwb=true.pdf SECURITY OF SUPPLY AND GRID EXPANSION | ENERGY | 15

The Bundesnetzagentur has designed an independent Establishing requirements market simulation to support the expert discussion on In a first step to establish requirements, the transmis- the future organisation of the electricity market. This sion system operators (TSOs) predict changes and market simulation makes it possible to generate data growth in electricity consumption and generation in and information that can help answer the questions the future by outlining a number of possible scenarios. posed above. Constant enhancement and maintenance The findings are put together in what is known as a of the simulation model ensure its suitability to cope "scenario framework", which the TSOs forward to the with the complex issues of security of supply and Bundesnetzagentur. The latter then verifies the future developments in the market. This model not findings, makes them available for public consultation only permits the Bundesnetzagentur to make its own and, after taking account of the comments received, evaluation of market outcomes but also permits approves them. independent appraisers to evaluate the simulation outcomes. The actual network development plan (NDP) is then drawn up on the basis of the framework scenario. The Moreover, preparatory work has started on the NDP contains all the measures necessary for secure introduction of a market master data register and a and reliable network operation in light of the changes national information platform. A systematic, expected in power generation and consumption. It also user-friendly compilation of electricity market data adheres to the "NOVA" principle by which network will increase transparency in the market by making optimisation potential must first of all be exhausted the latest electricity market data public. before grid reinforcement (Verstärkung) and only after that can grid expansion (Ausbau) be considered. The The drafts of the Electricity Market Act and the NDP only lists the network points of origin and Capacity Reserve Ordinance allow for an extensive destination between which the power has to be range of tasks for the Bundesnetzagentur in both transported. Specific power line routes will first take procuring and determining the extent of reserve shape during the subsequent planning approval capacity. The Bundesnetzagentur will assume respon- procedure. sibility for these tasks in 2016. More information on the Bundesnetzagentur's additional tasks arising out of the Since 2013, the Bundesnetzagentur has also consulted Electricity Market Act can be found in the chapter on and approved an offshore network development "Strategic Plan" starting on page 124 (German Version). plan (O-NDP) on the basis of the scenario framework. The O-NDP determines demand for grid connection Expansion in the transmission system lines and the time sequence to be followed in connect- ing each offshore wind farm cluster to the grid on the Expansion of the electricity grid is a key element of the mainland. Energiewende and a core infrastructure project. The electricity that is generated in northern Germany on On 27 February 2015 the Bundesnetzagentur published land and at sea from renewable energy sources has to its provisional due diligence findings on the Draft be transported to the main consumption areas in the Network Development Plan for 2024 and the Draft south. The current electricity grid was not designed for Offshore Network Development Plan for 2024, which this. The transmission system needs to be expanded to were submitted by the TSOs. Governmental bodies, integrate renewable energy sources and to maintain professional associations and the general public were system and supply security. The aim is to prepare the given an opportunity to comment on these drafts until network landscape for the switch to renewable energy 15 May 2015. As part of the consultation, four informa- sources quickly where possible while at the same time tion events were held in Munich, Erfurt, Stuttgart and reaching any necessary decisions together with society Hanover. as a whole. The Grid Expansion Acceleration Act (NABEG), the Energy Act (EnWG) and the Planning Moreover, even at this early stage the Bundesnetzagen- Approval Responsibilities Ordinance have assigned an tur started examining any possible impact of the grid extensive range of new tasks to the Bundesnetzagentur expansion on the public and on the environment. The all of which involve the expansion of Germany's findings from this strategic environmental assessment extra-high voltage networks. have been published in an environmental report.

16 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Some 34,211 responses were received during the In addition, the Bundesnetzagentur approved only public participation. However some letters were signed three of the seven proposed grid connection lines in jointly signed by several people thus the total number the Offshore Network Development Plan for 2024 as of those participating in the consultation was actually the speed of growth of offshore wind power plants much higher at 39,093. The issues referred to in all the must be reduced by law. Those grid connection lines responses were recorded and evaluated, and the that have been approved are two 900 MW systems in arguments put forward were also taken into account in the North Sea and one system in the Baltic Sea with the decision making. Many of the responses referred to two times 250 MW. specific projects, in particular to the south-east direct current path, the SuedLink, the Ultranet and the In future the Bundesnetzagentur will require the TSOs Raitersaich to Altheim project (measures M350 and to give one overall alternative plan plus one specific M54). alternative for each appropriate individual measure or bundle of measures and will require the TSOs to The Bundesnetzagentur took part in all the Bavarian provide a comprehensive account of the technical energy dialogue meetings on issues relating to network network-related grounds for the final choice of the expansion in spring 2015. The technical findings were measures proposed. included in full in the confirmation of the Network Development Plan 2024. The Bundesnetzagentur submitted the approved Network Development Plan for 2024 to the federal Based on the "Principles for a successful implementa- government as a draft for the Federal Requirements tion of the energy transition" of the coalition govern- Plan. The projects contained in the Federal Require- ment of 1 July 2015, the Bundesnetzagentur also ments Plan are urgently needed to ensure energy examined a high-voltage direct current (HVDC) supply and therefore are to be given priority. The Act to connection between Wolmirstedt in Saxony-Anhalt amend the provisions of the right to construct power and Isar/Landshut as an alternative to the HVDC lines2 entered into force on 31 December 2015, leading connection applied for by the TSOs between Wolmirst- to newly approved measures being incorporated into edt and Gundremmingen in Bavaria (south-east direct the Federal Requirements Plan and unapproved current path). It can be seen that the alternative measures being deleted. Contrary to the confirmed connection effectively corrects the line overloads. As Network Development Plan for 2024, the legislature shifting the grid connection point to Isar/Landshut decided against including Project P44 from Altenfeld causes increased network loads in south-east Bavaria, it via Schalkau to Grafenrheinfeld in the Federal Require- will also be necessary to reinforce the mains AC grid ments Plan. Isar was fixed as the Bavarian grid supply between Oberbachern and Ottenhofen. connection point for the HVDC line originating in Wolmirstedt and the ensuing necessary grid reinforce- During its examinations the Bundesnetzagentur ment between Oberbachern and Ottenhofen was assumed a slower rollout of power generation by included in the Federal Requirements Plan. offshore wind farms as well as peak shaving of wind feed-in on land. This approach is in line with the As scheduled, the next round of network development requirements that arose out of the public consultation. planning started in the year under review. On 30 Octo- Both factors lead to lower demand for grid expansion. ber 2015 the TSOs published their first drafts of the Despite this, the number of measures and their total Network Development Plan for 2025 and of the kilometre length still increased when compared with Offshore Network Development Plan for 2025. They are previous network development plans due to the based on the 2025 scenario framework, which was ongoing expansion in renewable energy sources. approved by the Bundesnetzagentur on 19 December 2014. On 4 September 2015 the Bundesnetzagentur approved the Network Development Plan for 2024 with 63 of the In view of an amendment to the Energy Act, which original 92 measures proposed by the TSOs. This changed the previous annual network development results in about 3,050 km of existing lines that will be planning to every two years, no new scenario frame- reinforced or optimised and around 2,650 km of new work was initiated in the year under review lines.

2 Federal Law Gazette I, page 2,490 ff

SECUSECURITYRITY OF SU POFPL YSUPPLY AND GR ANDID EX GRIDPANS IEXPANSIONON| ENERG Y | ENERGY | 17 | 17

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Kilometre overview

NDP 2024 NDP 2024 NDP 2023 BBPlG 2015 BBPlG 2013 TSO application confirmed confirmed

AC new power lines 650 km 648 km 600 km 550 km 650 km

DC corridors 2,300 km 1,750 km 1,600 km 1,750 km 1,600

km DC new power lines 250 km 250 km 250 km 250 km 250 km Interconnectors

AC network 3,700 km 2,750 km 2,500 km 2,800 km 2,000 km reinforcement

AC/DC conversion 300 km 300 km 300 km 300 km 300 km

Total 7,200 km 5,698 km 5,250 km 5,650 km 4,800 km

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18 | | BUNDESNETZAGENTURBUNDESNETZAGENTUR | | ANNUAL ANNUAL REPORT 2015

Overview of the estimated network expansion costs

Total Start network Additional network (NDP)

2. Draft NDP 2024 (TSOs) €23bn €5bn €18bn (excl. cabling)

confirmed NDP 2024 (BNetzA) €18bn €5bn €13bn (excl. cabling)

1. Draft NDP 2025 (TSOs) €24-35bn €5bn €19-30bn (depending on share of cabling)

the TSOs and the environmental report, the Bundes- On 24 September 2014, the Bundesnetzagentur held a environmental report, the Bundesnetzagentur then On 24 September 2014, the Bundesnetzagentur held a netzagentur then holds official and public participa- public scoping conference in Torgelow, after which it holds official and public participation proceedings. public scoping conference in Torgelow, after which it tion proceedings. Objections received are dealt with at defined the scope of assessment. This was based on the Objections received are dealt with at a hearing. defined the scope of assessment. This was based on the a hearing. application documents, however also taking account of application documents, however also taking account of the scoping conference findings and the information The federal sectoral planning ends with the decision of the scoping conference findings and the information The federal sectoral planning ends with the decision of subsequently received on the spatial and environmen- the Bundesnetzagentur on a specific route corridor subsequently received on the spatial and environmental the Bundesnetzagentur on a specific route corridor tal sustainability of the proposed route corridor and after it has weighed up all the arguments put forward. sustainability of the proposed route corridor and after it has weighed up all the arguments put forward. information on any possible alternatives. The scope of The aim is for a technically and environmentally information on any possible alternatives. The scope of The aim is for a technically and environmentally assessment was published on 18 November 2014 and feasible corridor that impacts people and the environ- assessment was published on 18 November 2014 and feasible corridor that impacts people and the environ- can be accessed at the Bundesnetzagentur website ment as little as possible. The route corridors deter- can be accessed at the Bundesnetzagentur website ment as little as possible. The route corridors deter- www.netzausbau.de/vorhaben11. At the end of July mined in the federal sectoral planning are binding for www.netzausbau.de/vorhaben11. At the end of July 2015 mined in the federal sectoral planning are binding for 2015 the project promoter submitted documents for the subsequent planning approval and are included in the project promoter submitted documents for the the subsequent planning approval and are included in the planning evaluation and the strategic environmen- the Federal Grid Plan for information purposes. planning evaluation and the strategic environmental the Federal Grid Plan for information purposes. tal assessment of the route corridor under section 8 assessment of the route corridor under ection 8 NABEG. NABEG. Application for federal sectoral planning for project Application for federal sectoral planning for project no no 11 BBPIG (Bertikow – Pasewalk) Application for federal sectoral planning for project no 2 11 BBPIG (Bertikow – Pasewalk) Application for federal sectoral planning for project no 2 In August 2014 the transmission system operator BBPIG (Ultranet) In August 2014 the transmission system operator BBPIG (Ultranet) 50Hertz submitted an application for federal sectoral The project promoters Amprion and TransnetBW have 50Hertz submitted an application for federal sectoral The project promoters Amprion and TransnetBW have planning for a power line from Bertikow to Pasewalk submitted an application for federal sectoral planning to planning for a power line from Bertikow to Pasewalk submitted an application for federal sectoral planning (no. 11 of the Federal Requirements Plan Act), which the Bundesnetzagentur for all five sections of project no (no. 11 of the Federal Requirements Plan Act), which to the Bundesnetzagentur for all five sections of project started the first formal proceedings. 2 BBPlG from Osterath to Philippsburg. started the first formal proceedings. no 2 BBPlG from Osterath to Philippsburg.

SECURITY OF SUPPLY AND GRID EXPANSION | ENERGY | 19

The application for section A between Riedstadt in (see the section on "underground cables"). Previously Hessen and Mannheim-Wallstadt in Baden- the project promoters' planning was based on primari- Wuerttemberg was submitted on 2 December 2014. ly using overhead power lines and underground cables A scoping conference was held on 24 February 2015 in only being used in exceptional cases. Weinheim and on 3 March 2015 in Bingen. It was necessary to hold two conferences to consider the Following the "Principles for a successful implemen- choice between Bürstadt and Weißenthurm. The tation of the energy transition" of 1 July 2015 issued by Bundesnetzagentur has used the findings of the the party chairmen of the government coalition and scoping conferences to define the scope of further based on statutory regulation, TenneT stated that assessments. It published its defined scope of assess- giving priority to underground cables would entail a ment on 25 June 2015, at the same time specifying the reorientation in planning possible route corridors. No details required in the documents to be submitted by application has yet been submitted for project no 3, the project promoter. which also forms part of the "SuedLink“ and lies between the grid connection points Brunsbüttel in The project promoter TransnetBW submitted a further Schleswig-Holstein and Großgartach in Baden- application for federal sectoral planning for section B Württemberg. However, the political agreement of the project between Mannheim-Wallstadt and contains the aim for "SuedLink" to have both projects Philippsburg to the Bundesnetzagentur on 29 Decem- following a joint main route as far as possible. In this ber 2014. The Bundesnetzagentur held a scoping respect the project promoters have already announced conference in Hockenheim on 14. April 2015 on the their intention of submitting the newly drawn up proposed route corridor and the alternatives for this application for project no 4 BBPIG and the application section, and on this basis published the defined scope for project no 3 to the Bundesnetz-agentur at the same of assessment for this section on 3 September 2015. time in the hope of speeding up the process.

At the beginning of October 2015 Amprion submitted an application for federal sectoral planning for section C from Osterath to Rommerskirchen. A scoping conference for section C was held on 11 and 12 January 2016 in Neuss.

On 29 October 2015 Amprion submitted an application for federal sectoral planning for section D of the project between Weißenthurm and Riedstadt. A scoping conference took place on 23 and 24 February 2016 in Mainz. Amprion further submitted an application to the Bundesnetzagentur for federal sector planning for section E from Rommerskirchen to Weißenthurm on 18 December 2015, which is currently being checked for completeness.

Application for federal sectoral planning for projects nos 3 and 4 BBPIG ("SuedLink") On 12 December 2014 the project promoter TenneT submitted an application for federal sectoral planning for project no 4 (BBPIG) from Wilster in Schleswig- Holstein to Grafenrheinfeld in Bavaria. The Bundes- netzagentur checked the application in terms of content and legal conformity and informed the project promoter on 9 February 2015 that the documents were found to require revision. At the end of December 2015 the legislature introduced a priority requirement for underground cables for DC power lines

20 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Underground cables In addition to regulations on underground cabling, the The law that entered into force on 31 December 2015, law contains the federal requirements plan, updated on which amends the laws governing power grid expan- the basis of the confirmed network development plan, sion, gives priority to underground cables for which stipulates with binding effect the points of DC power. origin and destination of the extra-high voltage lines that are necessary to meet energy supply requirements. In future, DC power lines are to be installed using underground cables in preference to overhead power The Bundesnetzagentur welcomes the priority given to lines. Previously priority had been given to overhead underground cable for DC power lines, especially as power lines and underground cables were the excep- this opens up the possibility of reaching a consensus on tion. Nevertheless, overhead power lines can still be a solution with the citizens concerned. Overall, it must considered in exceptional cases for nature conserva- be assumed that there will be fundamental new tion, for use in existing routes and at the request of any planning premises for the sectoral planning proce- municipalities affected insofar as no general exclusion dures, for which the Bundesnetzagentur will be applies to overhead lines due to their proximity to responsible. The previous planning of the network housing. operators will have to be completely revised. To this end the Bundesnetzagentur drafted a position paper With respect to extra-high voltage AC power lines, early in the legislative procedure that defines the new priority will continue to be given to overhead power statutory requirements with respect to legal and lines on technical grounds. Additional pilot projects for methodical aspects and provides a technical frame- underground cables in this area should permit further work for planning DC power lines with priority knowledge to be acquired in underground transmis- underground cabling as provided for by law. sion cabling and should help drive its technical development.

Underground cable priority for DC projects At the end of 2015 the legislature introduced a basic principle giving priority to underground cables for high voltage direct current transmission (HVDC projects). In future those projects designated with an "E" in the Federal Requirements Plan will be implemented using under- ground cables in preference to overhead power lines.

If existing routes are used, overhead lines can only be made use of if no further significant impact on the environment is expected. According to the new legislation, a requirement for straight lines has become particularly important. This requirement states that the route corridor should follow a straightline as far as possible between the point of origin and the termina- tion point of the project for the later installation and deployment of underground transmission cables. A Up to now underground cables have been the excep- route corridor is a strip of land 500m to 1000m wide, tion – masts and power lines above ground had had which the actual future power lines will run along. priority. According to the new legislation, any such Apart from economic aspects, this would also reduce overhead power lines can only be installed in excep- the impact on nature and the countryside. Moreover, tional cases for nature protection, for use in existing this would also ease the impact on those citizens affec- routes and, for instance, at the request of any munici- ted by the grid expansion. palities affected – but only if this occurs at a legally stipulated distance from housing. SECURITY OF SUPPLY AND GRID EXPANSION | ENERGY | 21

Monitoring – Documentation of progress made The TSO Amprion is currently preparing tests under Attention was already being focused on expediting grid operating conditions for the first 380 kV underground expansion at the extra-high voltage level upon the Grid cable pilot project in Raesfeld. Expansion Acceleration Act (EnLAG) entering into force in 2009. To remain aware of the status of the EnLAG projects, the Bundesnetzagentur has implemented an EnLAG The current version of the law contains 23 projects that monitoring process. For this purpose the four German require urgent implementation in order to meet energy TSOs, TenneT, 50Hertz, Amprion and TransnetBW, requirements. Project no 24 under the EnLAG is no forward quarterly reports on the planning and longer deemed necessary for energy requirements in construction progress of the projects in their control the Network Development Plan for 2024 due to alter- areas. The progress status of any of the construction native operational solutions put forward by the projects can be viewed at the Bundesnetzagentur's transmission system network operators. website at www.netzausbau.de/enlag.

The power lines to be installed have a total length of Alongside the EnLAG project monitoring, the Bundes- 1,816km; the regional planning and planning approval netzagentur also publishes the procedural status of procedures for these power lines are the responsibility expansion projects under the Federal Requirements of the individual federal state authorities. Of the 614 Plan Act on its website at www.netzausbau.de/bbplg. kilometres of route that have now been constructed, More detailed information about specific projects is factoring in those in the fourth quarterly report of also available. 2015, about 150km were completed in 2015. The TSOs expect around 55% of the power line routes under the EnLAG to be completed by 2017. So far, none of the underground cable pilot lines have been put into operation. 22 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Participation and dialogue films on plan approval and on the scenario framework. To increase transparency and gain public acceptance The animated films were recognised at the European for increasing the number of power lines, the Bundes- Best Practice Award of the Renewables Grid Initiative netzagentur not only offers the opportunities for as being worthy of note and were amongst the best participation that are prescribed by law but also cases from the 2015 "Good Practice of the Year" arranges informal events and information opportuni- competition. ties that are tailored to the specific stakeholders. In addition, the general public can obtain information Technical dialogue on "Underground cables and from our public advice service. This is staffed by overhead power lines - opportunities and risks" employees from the network expansion department On 24 June 2015 the Bundesnetzagentur discussed the who are available to provide information over the opportunities and risks of underground cable and telephone or will answer post and email enquiries. overhead lines with experts in the field and with an interested public. Information was also shared on the Expansion in the electricity distribution system latest state-of-the-art technology and on health and Alongside the TSOs it is primarily the distribution environmental issues. net-work operators (DSOs) who face the most challen- ges from the strong growth in renewable energy Science and research dialogue sources. More than 98% of renewable energy genera- On 17 and 18 September 2015 the second science and tion plants are still connected at a voltage level below research dialogue took place in Bonn. As in previous that of the extra high voltage network. This is con- years, the event provided a platform for an academic firmed by the results of the Bundesnetzagentur's exchange on the grid expansion with the aim of survey of the annual network expansion and network encouraging the relevant research findings being put status reports from the DSOs. An analysis and compa- into practice. The event's main focus were the chal- rison of the distribu-tion network structure with the lenges associated with expanding the grid and these transmission networks show that the former is much were addressed in two ways: as papers presented by more extensive and complex than the transmission selected authors and in discussions between panels of networks as regards network length and the number of experts. connections. Evaluations also point to the important role of the distribution network in integrating renew- Technical dialogue on converters able power generation plants although the load placed The technical dialogue on 17 November 2015 in on the individual distribution networks fluctuates Cologne dealt with legal consent issues, technical enormously. More than 70% of the renewable genera- aspects and the search for an appropriate site for a ting capacity is connected to just 20 of the 813 distribu- converter. tion network operators. Details of the investments planned over the next 10 years give reason to believe Information events for network development plan that the network operators concerned will meet their consultation and for the environmental report network expansion obligations and their investment in The Bundesnetzagentur's consultation on the Network the network will be at an appropriate level. Development Plan for 2014 and on the environmental report included four information events. The aim of With respect to the deployment of intelligent operating these events was to promote open dialogue on the equipment, growth rates can be seen in the number of network expansion required and its expected impact controllable distribution transformers and innovative on the environment. measures such as reactive power feeding. This means that the move towards intelligent distribution network The netzausbau.de website, which provides back- operations is in full flow. ground details and the latest information on current developments in grid expansion, was completely A comparison of the installed renewable generating overhauled in November regarding its technical capacity per federal state with the average length of functionality and content. The page now has a better, interruption (SAIDI – System Average Interruption more cohesive information layout and the additional Duration Index) per federal state shows that there is no photos and graphics improve clarity. A wide range of obvious connection between the two. This refutes the publications, plus short films on YouTube and presen- theory that the quality of supply in Germany has tations on Slideshare, round off the information on worsened due to the increased number of renewable offer. In 2015 the animated film series "The grid energy installation. expansion in five steps" was completed alongside the SECURITY OF SUPPLY AND GRID EXPANSION | ENERGY | 23

More information on interruptions to the electricity introduced strict requirements on permit granting supply can be found at www.bundesnetzagentur.de/ procedures so as to speed them up, yet at the same time SAIDI-electricity. taking account of the strict environment regulations and of EU legislation. In Germany the Bundesnetz- The Bundesnetzagentur has continued to implement agentur has been designated the competent authority the aim of the 27 November 2013 coalition agreement and has taken on responsibility for coordinating the in setting up a system of capping the renewable energy decision in a comprehensive way in accordance with the installation feed-in peaks in order to reduce the costs of "collaborative scheme". The state and federal author- network expansion. Together with the Federal Mini- ities' previous responsibility for conducting permit stry for Economic Affairs and Energy, the Bundesnetz- granting procedures for PCIs remains unchanged. The agentur has developed a policy system to simulate the Bundesnetzagentur acts as a "one-stop shop" authority capping of up to 3% in the network flow plan of the and thus as the central point of contact for the compe- energy volume that is generated annually by each wind tent state and federal authorities in Germany, those of power and photovoltaic installation. Renewable the other EU Member States and for the European installations will only be disconnected once all other Commission. This makes the coordination of PCI possibilities have been exhaused in normal network permit granting procedures more efficient. In addition operations. This allows optimum aggregate network the Bundesnetzagentur published a PCI Manual of expansion to be achieved without scaling back Procedures on the internet in May 2014. The list of PCIs renewable electricity too much. This system has been is updated every two years. The Bundesnetzagentur implemented in the latest draft Electricity Market Act. publishes up-to-date information on its website. This gives the public an opportunity to obtain information Network expansion in a European context about the importance of network expansion and the In 2013 the European Union created a new legislative latest developments within a European context. framework to expand cross-border energy projects at the European level. Implementation of the TEN-E Regulation requirements (EU 347/2013) The Regulation of the European Parliament and of the In 2014 the Bundesnetzagentur decided on three Council of 17 April 2013 on guidelines for trans- German project developers' applications for cross- European energy infrastructure (TEN-E Regulation) border cost allocation for PCIs in the gas sector under has been directly applicable since June 2013. In the TEN-E Regulation. As a result, the investment costs addition to a functioning internal energy market, the were allocated in line with the application. In the Regulation aims to achieve the EU's energy policy electricity sector the Bundesnetzagentur has only dealt targets and to contribute to security of supply. so far with one application for cost allocation for PCI Amongst others, it sets out the process for selecting 4.5.1 LIT POL LINK. The cost-benefit analysis submit- projects of common interest (PCI). The second Union ted by the applicant was not transparent and therefore List of PCIs was published as an attachment to the a cost participation was not considered appropriate. As TEN-E Regulation on 18 November 2015. This second the regulatory authorities who were involved from list contains 19 PCIs in the electricity sector plus one Lithuania, Poland, Finland, Germany, Latvia, Sweden pumped storage unit in the gas sector and two in the and Norway could not agree on a cross-border cost oil sector. A new addition in the electricity sector is the allocation, the Agency for the Cooperation of Energy designation of 11 German projects as e-highways. In Regulators (ACER) took over the procedure in Decem- total, approximately 195 PCIs from all over the EU were ber 2014 and issued a decision in April 2015. The project included in the Union List of PCIs. The TEN-E Regula- costs were allocated in full to Lithuania with the tion establishes the measures and tools that can be Lithuanian network operator, Litgrid AB, placed under used to speed up the permit granting process. Moreo- an obligation to finance the investment costs from the ver it establishes the regulatory framework that offers Lithuanian network charges. investment incentives and financially supports energy infrastructure projects. The Bundesnetzagentur The assumption of costs by foreign parties was refused. actively contributed to the PCI selection process and Thus ACER was of the same view as the Bundesnetz- worked closely with European institutions and other agentur in key aspects of its decision. This was decisive regulatory bodies on further areas where the TEN-E in ensuring that the German network users were not Regulation is application. negatively affected by the decision.

The timely execution of a PCI is a joint, European priority. For this reason the TEN-E Regulation has 24 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Network and system reliability examines the relevant input parameters from the load, Redispatch, feed-in management and generation, trade and network areas for Germany and emergency measures neighbouring countries and, following any necessary The change in the power generation landscape and adjustments, releases these to the TSOs for further delays in expanding the grid place enormous demands calculations. Once the demand requirements have been on the power grids. In particular, the extent to which identified, the results are checked by the Bundesnetz- measures have been introduced to ensure security of agentur, are defined as binding and are published in a supply has greatly increased in recent years. An report on the demand identified. important part of the Bundesnetzagentur's work is analysing the measures employed by the network The relevant report from the Bundesnetzagentur on operators and checking them for plausibility. These identifying the reserve power plant capacity demand measures are split into two distinct groups: redispatch for the 2015/2016 winter, as well as that of 2016/2017 and feed-in management measures. The first redis- and 2019/2020, was published on 4 May 2015. A reserve patch measures are triggered if sections of the circuit requirement of a minimum amount of 6,700 MW to a have to be protected against congestion. Redispatching maximum of 7,800 MW has been identified by the includes any interventions in generating capacity that Bundesnestzagentur for the 2015/2016 winter. The are necessary to protect those sections of the lines reserve requirement for the 2016/2017 winter falls affected. Feed-in management intervention occurs if within a 6,600 MW to 7,700 MW range. The reserve network capacity is inadequate. This second measure requirement for the 2019/2020 winter is 1,600 MW on can temporarily scale back the feed-in priority that is the assumption that a congestion management given to electricity from renewable energy sources, procedure will be introduced at the German-Austrian mine gas, and combined heat and power plants (CHP). border. This measure only comes into effect when the grid capacity is no longer adequate. The reserve capacity comprises national and inter- The previous annual data collection on measures national reserve power plants that are deployed as became insufficient given the dramatic increase in needed by the TSOs to ensure system reliability for an network and security interventions. In response, the increase in input capacity. The national reserve power Bundesnetzagentur set up several data submission plants used for reserve capacity are power plants procedures allowing it to collect data at shorter intended for closure that may not be shut-down as they intervals and decided to publish its findings on a are systemically relevant for the grid. The increase in quarterly basis. For the first time a detailed presen- input capacity from these power plants removes tation of feed-in management and estimated costs is congestion in the extra-high voltage lines when wind possible for every federal state. Additionally, the report power feed-in from northern and eastern Germany is allows conclusions to be drawn on the seasonal high. fluctuations of all network and system security measures. The quarterly reports can be downloaded Following the closure notifications received by the from the Bundesnetzagentur's website at www. Bundesnetzagentur as of 18 January 2016, of those bundesnetzagentur.de/systemstudie. power generation units notified for final shut-down so far 11 power generation units of 2,727 MW in total have Reserve capacity, system-relevant power stations and been designated as systemically relevant by the TSOs expression of interest procedures and approved as such by the Bundesnetzagentur. By If the power plant capacity available on the market is this means the Bundesnetzagentur prevents the insufficient to correct the network congestion, the closure of systemically relevant plants in order to TSOs are instructed to procure the missing redispatch maintain system reliability. These plants then become capacity from the reserve capacity. For this purpose the an integral part of the reserve capacity as of the date of TSOs examine the reserve capacity requirement every the intended final closure. In addition, six power plants year taking the requirements previously defined by the with total output of 1,788 MW, whose operators have Bundesnetzagentur into consideration. In this connec- notified a provisional shut-down, have been designated tion, the critical situations at the border for network as systemically relevant by the TSOs. These power operation are defined by the TSOs in agreement with plants will become an integral part of the reserve the Bundesnetzagentur. These involve specific weather capacity as of the date of the notified provisional and consumption situations, such as full load scenari- closure and will also be available to the TSOs exclu- os, namely high consumption and strong winds, which sively for reliable system management. place particularly high demands on the safe operation of the transmission networks. The Bundesnetzagentur SECURITY OF SUPPLY AND GRID EXPANSION | ENERGY | 25

Foreign power plants for reserve capacity are examined in recent years and will increase even more in the by means of several expression of interest processes. coming years according to calculations of the Bundes- The starting point for any such process is the require- netzagentur and the German transmission system ment identified in each demand identification report operators. This will exceed the trading capacity that or the range of reserve capacity required for the period can be transported safely over the two power lines examined. In addition to the total demand spread connecting the countries. Even with the completion of identified, the potential reserve capacity already network expansion in 2024, trade will significantly available from national power plants and the situation exceed the grid's transport capacity. at foreign power plants are decisive for the specific demand requirement. The more relief from congestion The prevailing EU legislation provides for the amount that can be provided by the power plants put forward of trade to be facilitated that can be safely transported for the examination process, the less total power has to along two cross-border power lines. To ensure this be contracted within the demand spread identified. long-term, a process has already been initiated to examine the bidding zone configuration in the In the call for expressions of interest this year (IBV) Commission Regulation establishing a guideline on 1,107 MW was secured from abroad in addition to the capacity allocation and congestion management. capacity already contracted for the 2015/2016 winter. Naturally, the Bundesnetzagentur will ensure that any Reserve capacity for winter 2015/2016 totalled capacity allocation at the German-Austrian border is 7,515 MW. Of this, 2,995 MW are contracted domesti- legally compliant with European statutory require- cally and 4,520 MW internationally. The international ments. More specifically, this means that no internal power plants are located in Austria, Italy, Switzerland congestion can be pushed to the border. and France. For next winter, 2016/2017, an initial 3,925 MW have been contracted internationally. A further The Bundesnetzagentur does not view possible domestic 3,488 MW takes the total reserve capacity for alternative grid stabilisation measures, such as winter 2016/2017 to 7,413 MW. The Bundesnetzagentur redispatch, to be sufficient as permanent measures to supported the TSOs during the contract negotiations guarantee long-term security of supply in the region. It and confirmed the offer combinations that had been is therefore holding talks with the regulatory authori- previously agreed with them. ties and network operators directly concerned, including those of Poland, the Czech Republic and Reserve capacity is most often used in winter months Austria. The talks aim to integrate the German- when high wind infeed combines with a high con- Austrian border into a joint Central European flow- sumption load. The reserve capacity has been increa- based market coupling and to draw up other short- singly called upon since the beginning of November term solutions such as improved redispatch coopera- 2015. The reason for this is the efficiency factor applied tion. These are expected to take place between to the TSOs' weekly operations plan, which gives Germany and Austria initially. To allow German priority to power plants that are better at correcting transmission network operators to have recourse to any shortages. This can result in foreign power plants, suitable power plants for redispatch in the future, the especially those in Austria, being deployed before redispatching amounts are to be reduced and at the domestic power plants. same time the TSOs will be given more leeway. The precise details and the breakdown of the costs incurred The preliminary contingency capacity costs for this are currently being discussed between the Bundesnetz- reserve capacity amount to approximately €190m for agentur and E-Control, the Austrian regulatory winter 2015/2016 and about €192m for winter authority, as well as with each transmission system 2016/2017. These figures do not include the bill for the operator. actual reserve capacity deployed because these costs are dependent upon deployment and the final figure is Read more about this market coupling in "Market only available once winter is over. coupling" from page 43 onwards.

Electricity transport between Germany and Austria At the moment Germany and Austria form one price zone in the electricity market. This means there is uniform pricing in the two countries and electricity can flow unrestrictedly between the two countries according to availability and demand. The amount of electricity flowing from Germany to Austria has risen 26 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Gas network expansion and one project proposed by Gasunie Deutschland Gas network development plan (GUD) was modified. The gas network development plan contains measures for the appropriate enhancement, transmission gains In the meantime the TSOs have carried out the and expansion of the gas supply network for the next recommended modifications and have published a ten years. Security of supply must be as equally modified Gas Network Development Plan for 2015. The guaranteed as a secure and reliable network operation. binding measures include a 810km pipeline extension The annual duty to prepare a network development and a compressor expansion of 393 MW in the next ten plan is prescribed by law. The plan is mainly concerned years. Investments for all of the 84 projects will with expansion issues arising out of the connection of amount to €3.3bn. These include 204 MW compressor gas power stations – in light of the interface to the expansion and 294km additional pipelines to a value of electricity market – and gas storage facilities. Further- €1.6bn that are related to the market area conversion at more, both the connections between the German gas the transmission pipeline level. transmission system and those of neighbouring European countries, as well as the capacity require- Scenario Framework for the Gas NDP 2016 ment in the downstream networks, are examined. Following the implementation of the recommended modifications, the TSOs started work on modelling and On 1 April 2015 the TSOs submitted the Gas Network drawing up the Gas NDP 2016. It is based on the gas Development Plan for 2015 to the Bundesnetzagentur. scenario framework approved by the Bundesnetz- The latest plan essentially continues with the projects agentur on 11 December 2015. given binding effect by the Bundesnetzagentur in the 2014 plan. It also considers 37 new expansion measures Meeting the capacity requirement of the distribution to be necessary in the period up to 2025, of which a network operators is essential in ensuring security of large number – 27 of the new measures – are connected supply. Uninterrupted supply to the DSOs is once again with the market area conversion process and the required in the 2016 scenario framework confirmation resulting additional demand for H gas. and should be taken into strong consideration in the Gas NDP 2016. The mandatory calculation model Read more about this market area conversion in versions must be based on growing capacity require- "Market area conversion" from page 28 onwards. ments over the following five years. This approach must be continued for a further five years until 2026. From a security of supply perspective, market area conversion plays a vital role in the draft plan submit- ted. The outcome is a specific proposal for the gradual transformation of these sectors that goes beyond 2025 to cover the period until 2030. The draft plan contains two distinct models that differ in only one aspect in their scope and cost of the expansion. This difference arises from taking inequal amounts into account when calculating the capacity requirements for the down- stream DSOs. The gas TSOs' proposed network plan selected from these two models resulted in a pipeline extension totalling 810km and a compressor expansion of 405 MW. Investments over the next ten years for all the 86 projects will amount to €3.5bn.

The Bundesnetzagentur's consultation on the plan ran from 14 April to 5 June 2015. Following evaluation of the responses, the Bundesnetzagentur issued a request for modification to the TSOs on 1 September 2015.

The proposed measures were confirmed in principle in the request. However, two unspecific projects relating to market area conversion and proposed by Open Grid Europe (OGE) and by Thyssengas, were not confirmed SECURITY OF SUPPLY AND GRID EXPANSION | ENERGY | 27

Graph showing the results of the Gas Network Development Plan for 2014 and 2015

011-01

007-01 223-01 009-01

125-01 323-01 110-06 324-01 325-01 339-01 121-01 326-01 300-02 301-01 332-01 119-01 220-01 333-01 334-01 222-02 221-01 336-01 224-02 101-01 329-01 072-03 083-06 111-01 330-01 306-01 045-04 228-02 337-01 038-01 338-01 040-05 225-02 302-01 230-01 313-01 205-02 335-01 204-02 067-02 327-01 320-01 227-02 203-02 049-04 322-01

226-02 328-01 321-01 331-01 208-01 026-06 209-01 309-01 314-01 308-01 304-01 311-01 206-01 312-01 307-01 024-04b 207-01 069-01abcd 024-04a 112-01 024-04c 116-01 036-04 028-04 113-01 201-01 303-01 117-01 115-01 062-01 030-02

118-01 310-01 305-01

The question of where the H-gas (high calorific gas) scenario framework 2016 to determine the costs and required in future originates plays an important role in benefits of the required gas network expansion. Taking the 2016 scenario framework. H-gas is intended to the scenario framework as a basis, the TSOs submitted compensate for falling domestic production and lower a draft Gas NDP to the Bundesnetzagentur on 1 April import volumes of L-gas (low-calorific gas). The scale of 2016. the expansion necessary to ensure the gas network's continual robustness is to be determined in the Gas All documents relating to the Gas NDP 2015 and the NDP 2016 based on two different forecasts on the Gas 2016 scenario framework, as well as extensive lists distribution of H-gas sources.. of all the storage facilities, network points and power plants can be found at the TSOs' website www. Moreover, it is intended to create an improved connec- netzentwicklungsplangas.de. tion to existing gas storage facilities. To this end, the Bundesnetzagentur requests the TSOs in the

28 | | BUNDESNETZAGENTURBUNDESNETZAGENTUR | | ANNUAL ANNUAL REPORT 2015

Overview of the gas network development plan expansion measures

Gas NDP 2012 Gas NDP 2013 Gas NDP 2014 Gas NDP 2015

Additional 640 km 522 km 748 km 810 km Additional 357 MW 344 MW 343 MW 393 MW Number of measures 32 27 51 84 total* Total costs €2.2bn €2.2bn €2.8bn €3.3bn *The Gas NDP measures include gas pressure regulating and metering stations, reverse flow compressors and switching plants as part of the market area conversion, which have not been explicitly listed in this table.

More information on on gas gas network network development, development, on on the the someThe gas five TSOs to six included million agas planned appliances. timetable On the for gas the request for modificationsmodifications toto thethe Gas Gas NDP NDP 2015, 2015, thethe network operatorareas to be side, converted five TSOs by will 2030 be in affected the Gas as well assessment of the consultation outcomeoutcome and and on on the the asNetwork numerous Development DSOs. Plan for 2015. Conversion of the 2016 scenario scenario frameworkframework cancan be found at www. first, as yet small areas started in 2015. Larger network www.bundesnetzagentur.de/bundesnetzagentur.de/gasnetzentwicklung. gas network (in areas, such as Bremen, will follow from 2017 onwards. development.German) The website of the German association of gas transmis-

Market area conversion In 2015, SchneverdingenSchneverdingen inin LowerLower Saxony,Saxony, waswas thethe firstfirst of many networknetwork areasareas toto bebe converted fromfrom L L-gas-gas to to HH-gas.-gas. OnOn 1 1 OctoberOctober 2015 2015 the local municipalmunicipal utility utility

company successfullysuccessfully implemented implemented the the conversion conversion for for about 6,000 connected customers. ThisThis hadhad been been

preceded by a year ofof careful planning by by the the network network operator involved. Building upon the experience operator involved. Building upon the experience gained, plans forfor thethe marketmarket area area conversionconversion fromfrom L -

gasL-gas to toH- H-gasgas have have been been pushed pushed ahead. ahead.

German LL-gas-gas outputs outputs are are declining declining and and L L-gas-gas imports imports from TheThe NetherlandsNetherlands will will also also decline decline from from 2020 2020 onwards. This makes it necessary to carry outout aa comprehensive changeovechangeoverr inin thethe L L-gas-gas network network areas. areas. At present the supply of LL-gas-gas from TheThe NetherlandsNetherlands to to Germany isis scheduledscheduled toto end end in in 2029. 2029. Hence itit isis planned to carry outout aa gradual,gradual, extremely extremely well well-- H-Gas coordinated changeover inin the the L L-gas-gas network network areas areas in in Gaspool L-Gas regions NCG L-Gas regions Not Germany. ByBy 2030,2030, an eestimatedstimated 4.3m4.3m consumers,consumers, assigned Gaspool / NCG L-Gas regions traders andand industrial enterprises,enterprises, primarilyprimarily in in northern andand westernwestern GermanyGermany will will be be re re-fitted-fitted with with some five to six million gas appliances. On the gas H-Gas Gaspool L-Gas Gebiete Overview number of NCG L-Gas Gebiete network operator side, five TSOs will be affected as measures keine Zuordnung well as numerous DSOs. total confirmedGaspool / NCG L-Gas Gebiete not confirmed

NDP Gas 2015 86 84* 3*

Übersicht Maßnahmenzahl

gesamt bestätigt nicht bestätigt

NEP Gas 2015 86 84* 3* *Two measures have not been confirmed, one measure only following modifications.

* Zwei Maßnahmen wurden nicht bestätigt, eine der Maßnahmen nur unter Anpassungen. SECURITY OF SUPPLY AND GRID EXPANSION | ENERGY | 29 SECURITY OF SUPPLY AND GRID EXPANSION| ENERGY | 29

Tsionhe gsystemas TSO soperators included (FNBa plann Gas)ed providestimetable an fo roverview the IInternetnternet ppagesages oonn ttypesypes ooff ccontract,ontract, t thehe br breakdowneakdown o off nofe tthewo rbindinglyk areas to agreed be con vdateserted for by conversion 2030 in the that Gas are ggasas andand eelectricitylectricity pprices,rices, aandnd ppowerower bbillsills eenjoyednjoyed aa Naccurateetwork toDe thevelo monthpment forPla nthe fo rnext 201 five5. Co years.nversion of the llargearge numbernumber ooff vivisitorssitors ttoo yyearear eendnd 22015015 andand anan irst, as yet small areas started in 2015. Larger network eespeciallyspecially hhighigh nnumberumber a alsolso vi visitedsited t thehe F FAQsAQs p pageage o onn aInrea recents, suc yearsh as B therem Bundesnetzagenturen, will follow from 2has01 7worked onwar ds. tthehe mmarketarket aarearea cconversion.onversion. IInn ffact,act, t therehere w wasas aa � Tprimarilyhe websi tone o thef th einterpretation German assoc andiatio formn of g ofas the tra nsmis- ssevenfoldevenfold iincreasencrease iinn uuse,se, eespeciallyspecially ooncence tthehe c conver-onver- sregulatoryion system framework operators (asFN wellB Ga ass) onpro dialoguevides an withoverv theiew ssionion ooff ggasas qqualityuality ffromrom L L-gas-gas t too H H-gas-gas g gotot u underwaynderway i nin oregulatoryf the bindi authoritiesngly agreed of da thetes federalfor con vstates,ersion network that are tthehe rruralural ddistrictistrict ooff S Soltauoltau i nin L Lowerower S Saxonyaxony i nin s ummsummerer aoperators,ccurate to conversion the month servicefor the nproviders,ext ive ye associationsars. 202015.15. TheThe BundesnetzagenturBundesnetzagentur hhasas pputut ttogetherogether tthehe Iandn re othercent y marketears the players. Bundes Thisnetza dialoguegentur h acovereds worke d mmostost iimportantmportant q questionsuestions a andnd a answersnswers o onn t thishis t topicopic � pvariousrimaril aspectsy on the such inter aspr costs,etatio nthe an technicald form of torganisatihe - aandnd hhasas ddrawnrawn uupp aann uup-to-datep-to-date br brochureochure g givingiving a a b briefrief roneg ofula thetor yconversion framewor kand as wdevelopmentsell as on dialo ongu ethe wi converth the - ovoverview,erview, wwhichhich ccanan bbee oorderedrdered ffromrom ththee eenergynergy c on- rsionegu lserviceatory a utproviders'horities o market.f the federal states, network sconsumerumer adv iadvisorsor or p orre spresss of i coffice,e, or c aorn canbe d beow down-loanloaded - operators, conversion service providers, associations fdedrom from the i ntheter internet.net. � and other market players. This dialogue covered various aspects such as costs, the technical organisation TToo provideprovide informationinformation fforor ththoseose g gasas cconsumersonsumers of the conversion and developments on the conversion aaffected,ffected, tthehe BBundesnetzagenturundesnetzagentur h hasas p publishedublished a a l ilistst o off service providers' market. FFAQsAQs oonn tthehe mmarketarket aarearea cconversiononversion aass wwellell aass a flyerlyer wwithith tthehe mmostost iimportantmportant i ninformation.formation. � www.bundesnetzagentur.de/marktraumumstellung www.bundesnetzagentur.de/marktraumumstellung

CConversiononversion ffromrom LL-gas-gas ttoo HH-gas-gas OOnene ooff tthehe bbiggestiggest iinfrastructurenfrastructure pprojectsrojects fforor GGermanerman ggasas ssupplyupply hhasas bbeeneen rrunningunning ssinceince MMayay 20152015:: ByBy 2030 largelarge partsparts ofof thethe naturalnatural gasgas networknetwork wwillill hhaveave bbeeneen convertedconverted oneone byby one.one. ThisThis mmeanseans thatthat thethe lowlow calorificcalorific L- ggasas wwillill bbee rreplacedeplaced wwithith HH- ggas,as, wwhichhich hhasas aa hhigherigher ccaloricaloric vvalue.alue.

NNaturalatural ggasas wwillill bbee uusedsed iinn ttwowo d differentifferent c chemicalhemical wwillill bbee bbuiltuilt aandnd ccompressorompressor sstationstations eenlarged.nlarged. O Overallverall ccompositionsompositions iinn GGermany.ermany. A Ass t hthee t rtransportationansportation o fof L fiveive ttoo ssixix mmillionillion p piecesieces o off e equipmentquipment w willill b bee ad adapted.apted. Lgas-ga froms from sources source ins i Germanyn German yand and The Th eNetherlands Netherlands � dedeclines,clines, rregionsegions tthathat aarere ccurrentlyurrently s suppliedupplied w withith L L- ggasas TThehe llargearge ggasas nnetworketwork ooperatorsperators publishedpublished a plannedplanned mumustst bbee sswitchedwitched ovoverer ttoo H- ggas,as, wwhichhich iiss mmainlyainly ttimetableimetable fforor tthehe nnetworketwork aareasreas cconcernedoncerned iinn tthehe G Gasas ssuppliedupplied fromfrom NNorway,orway, RRussiaussia aandnd GGreatreat BBritain.ritain. T Thehe NNetworketwork DDevelopmentevelopment PPlanlan 20 2015.15. CConversiononversion ooff tthehe cconversiononversion pprimarilyrimarily aaffectsffects w westest a andnd n north-westorth-west first,irst, aass yyetet ssmallmall aareasreas sstartedtarted iinn 22015.015. LargerLarger networknetwork GGermany,ermany, sspecificallypeci ically t hthee f efederalderal s statestates o off L Lowerower aareas,reas, suchsuch aass Bremen,Bremen, wwillill ffollowollow ffromrom 2 2017017 oonwards.nwards. � SSaxony,axony, BBremen,remen, NNorthorth R Rhine-Westphalia,hine-Westphalia, R Rhineland-hineland- TThehe grgraphaph bbelowelow sshowshows thethe nnumberumber ooff cconsumeronsumer � PPfalz,falz, SSaxony-Anhaltaxony-Anhalt a andnd H Hessen.essen. In In th theseese a rareaseas t hthee g agass aappliancesppliances tthathat wwillill hhaveave ttoo bbee cconvertedonverted i inn t thehe n nextext f ew qqualityuality wwillill b bee cconvertedonverted i inn l alargerge p partsarts o off t thehe n network.etwork. yfewear yearss in th ine atherea areass desi gdesignatednated for c foronv conversionersion by 2 by03 0. TToo ensureensure safetysafety aandnd qquality,uality, nnewew ggasas ppipelinesipelines 2030.

Number of consumer appliances to be converted per year in the areas designated for conversion by 2030

487000 443000 434000 404000 326000 349510 8000 14119 15000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Source: "The Draft Gas Network Development Plan for 2016" of the gas TSOs, published on 1 April 2016. 30 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Energy consumer advice service Consumer protection In 2015, the energy consumer advice service received a and advice total of 10,368 queries and complaints. Most of the queries and complaints (5,644) related to electricity. 920 The Bundesnetzagentur queries related to gas supply. In addition to this, the Bundesnetzagentur's energy consumer advice service keeps consumers informed, received 3,804 queries about comprehensive issues and provides clear explanations general legal and economic questions relating to the energy sector that only partially fall within the of their rights as household Bundesnetzagentur's remit.

customers as well as their Consumers can contact the Bundesnetzagentur's right to apply for dispute consumer advice service by letter, fax, email or by phone. Since October 2015, the Bundesnetzagentur resolution. expanded its consumer advice service telephone hotline: The service is now available to handle consu- mer queries – Mondays to Thursdays from 9am to 3pm and Fridays from 9am to 12pm.

As was the case in the past, questions regarding contracts and billing and complaints about the quality of service offered by suppliers was at the top of the list. The bulk of these queries and complaints concerned the same few companies. In particular, consumer complaints related to missing or delayed energy billing and delays in the payment or the settlement of balances and bonuses.

Supervisory proceedings against immergrün-Energie GmbH were discontinued in June 2015. The Bundes- netzagentur had initiated the proceedings in late November 2014 to investigate suspected breaches of the supplier obligations laid down in section 40 of the German Energy Act. The proceedings were discontin- ued because the number of complaints about delays in interim or final billing had fallen considerably.

The energy consumer advice service is only able to provide consumers with general information on the applicable law, their special rights as household consumers and dispute resolution proceedings, however. It cannot support or represent customers in the process of asserting their individual rights against an energy utility.

CONSUMER PROTECTION AND ADVICE | ENERGIE | 31

If complaining consumers are unable to achieve agreement within four weeks with an energy utility, meter operator or metering service provider, they have the option of turning to the energy dispute resolution panel – Schlichtungsstelle Energie e.V. – for redress as an alternative to taking their case to court.

Information online The Bundesnetzagentur noticed strong public interest for subjects relating to energy and its tasks. In Germany alone, webpages in the energy section of the Bundesnetzagentur's website were visited over a million times. Per month over 15,000 different users were registered. The number of various downloads went up to over 1,000 a month. Data protection is at the heart of the Bundesnetzagentur's work, this is why individuals who visit the website are not tracked.

The Bundesnetzagentur offers comprehensive infor- mation for consumers on its website. The ever growing energy encyclopedia provides explanations for terms such as electricity labelling, smart meter and EEG surcharge (in German). There is also a FAQ section on the topics of supplier switching, energy prices, bills and network connection.

Gas and electricity suppliers As of 2005, every supplier that supplies household customers with electricity and/or gas has to provide notification of its activity as a supplier to the Bundes- netzagentur as required by section 5 of the Energy Act. The list of suppliers that is updated on a monthly basis is available to the public on the website of the Bundes- netzagentur. In 2015, the total number of gas and electricity suppliers registered increased at a constant pace. This list also includes suppliers that voluntarily provided notification, even though they were already active on the market before 2005. 32 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

objective, transparent and non-discriminatory Rulings, activities and pro- procedure. ceedings The Bundesnetzagentur published its determination The allocation and transfer with the rules for allocating offshore connection capacity on 13 August 2014. The determination lays of offshore connection capa- down : city and the new framework • the requirements to be met by operators applying for conditions for the allocation capacity allocation on existing transmission links or those under construction. and use of transport capacity • the rules for auctioning connection capacity in the in the gas transmission sys- event of a shortage. tems are important examples On the basis of this determination, the Bundesnetz- agentur allocated a total of 1,511.6 MW to seven of the Bundesnetzagentur's offshore wind farms in the North Sea and the Baltic Sea broad range of duties. in the first quarter of 2015 through the first procedure for allocating connection capacity. After completion of Other examples of the the first procedure, 211.1 MW below the legal limit of 7.7 GW of connection capacity was still available for Bundesnetzagentur's work new links in the North and Baltic Seas, taking into account all of the unconditional grid connection in shaping framework condi- commitments already in place. The Bundesnetzagentur tions are the implementation launched a second procedure for the allocation of the remaining 211.1 MW of connection capacity on 25 of more recent tasks such as March 2015. Demand for connection capacity exceeded the capacity offered in the second procedure. This lead those of the Market Transpa- to an auction being carried out by the Bundesnetz- rency Unit and the auctions agentur on 3 November 2015 among all of the appli- cants that qualified. In the auction, five offshore wind for ground-mounted photo- farms were able to buy the right to allocation of the remaining 211.1 MW of connection capacity. This voltaic installations. procedure ensured a quick and legally certain alloca- tion of the remaining offshore connection capacity, meaning that the entire volume of 7.7 GW could be used.

On 23 March 2015, the Bundesnetzagentur concluded a procedure to transfer capacity. Through the transfer of 400 MW of capacity from the BorWin2 transmission Allocation and transfer of offshore connection capacity link in cluster 6 to the BorWin3 transmission link in The amendments to the Energy Act (EnWG) which took cluster 8, all of the unconditional grid connection effect on 1 August 2014 brought about fundamental commitments made under the old legal framework can changes in the regulations for connecting offshore be met without needing to construct a new trans- wind installations to the grid. The maximum connec- mission link. This saves the network user up to €250m tion capacity that can be allocated up to 31 December in costs annually. 2020 for links connecting installations in the North Sea and the Baltic Sea is 6.5 GW. Starting from 2021, the KARLA Gas 1.1. maximum is raised by 800 MW per year. According to On 14 August 2015, Ruling Chamber 7 issued a the transitional arrangement provided for in the Act, determination under the ref. BK7-15-001 on the the Bundesnetzagentur, as the regulatory authority, adjustment of capacity arrangements in the gas sector can allocate up to 7.7 GW of capacity until 1 January ("KARLA Gas 1.1."). Subject of the proceedings were the 2018, however. Capacity is allocated following an framework conditions for the allocation and use of transport capacity in the gas transmission systems. RULINGS, ACTIVITIES AND PROCEEDINGS | ENERGIE | 33

The European Network Code on Capacity Allocation • Determining reservation quotas for the provision of Mechanisms (CAM) and its entry into force on short-term capacity at interconnection points 1 November 2015 triggered the determination. The between two market areas. CAM network code sets out new regulations that will • The revocation of the ban on renomination for apply in many areas. This determination was funda- day-ahead capacity. mentally addressed to gas transmission system • Information and reporting obligations on the TSOs operators. in the case of a change of platform.

The determination's major aim was to avoid duplica- The determination is another component for the tion and rule out any possible inconsistencies between pan-European harmonisation of the legal framework currently applicable national regulations and future concerning access to capacity and for the cross border European regulations and to thus provide legal clarity cooperation of European gas transmission system for all market participants in as timely a manner as operators. possible. Moreover, the CAM network code sets out official approval requirements for the national GaBi Gas 2.0 regulatory authorities and provides them with some On 19 December 2014 Ruling Chamber 7 adopted a leeway for decision-making, all of which is integrated decision on the redesign of the gas balancing regime in the decision adopted by the Ruling Chamber. ("GaBi Gas 2.0") under reference BK7-14-020. The determination fundamentally addressed all gas The main focuses of the draft under consideration are, transmission system operators, distribution system among others: operators and both market area managers. First and foremost, the European specifications from the • Updating the the gas standard capacity contract. network code on gas balancing were implemented by

More competition: Auctions set the level of support for ground-mounted photovoltaic installations With the revision of the Renewable Energy Sources Act (EEG) in 2014, the German Govern- ment determined that the support for ground-mounted solar PV installations would in the future be determined through auctions. Support for electricity generated from such installa- tions is to be determined competitively and in a cost-effective manner.

Today, energy from renewables makes a significant contribution to our energy supply. To ensure that supporting renewable energy generation is as cost effective as possible and to provide for better planning of the expansion of renewables, the EEG sets out that the level of support for ground-mounted PV installa- tions is to be determined in a pilot auction. The goal of the pilot auction is to set the price of electricity from renewables at a level that ensures the economic operation of the given installation. At the same time, the administrative procedure involved is to be tested. Operators of installations can submit bids for a In 2015, the Bundesnetzagentur successfully held specific volume of capacity expansion at a price that three auction rounds for ground-mounted PV installa- they themselves set. The most favourable bids will be tions with a total capacity of 500 MW. Throughout the accepted. This model is also to replace the feed-in rounds, the average value of the bids went down to tariffs that are currently set out in legislation for the 8.00 ct/kWh. On average, 150 bids were submitted per other renewable energy sources. In addition to auction. The large demand and decreasing price are improved planning for capacity increases and foste- evidence that the new auction model is a success. ring competition, the diverse number of active players operating installations should be kept high.

34 | BUNDESNETZAGENTUR | ANNUAL REPORT

34 | BUNDESNETZAGENTUR | ANNUAL REPORT

34 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015 implemented by 1 October 2015 with this Following the Bundesnetzagentur's ruling laying down determination. It replaces the previous the criteria for determining individual network deimtpelremmiennattedion tbhya t, 1to aOc grtoeabte re xte2n0t,1 5w asw irtehp eatlheids cFhoallrogwesin ign thDeec Bemunbdeers 2n0e1tz3a, gceonntutrra'cst rsu olnin ign ldaiyivindgu adlloyw n adet therism daintaet.io n. It replaces the previous athgre ecredit ecrhiaarg foers de not elormnginerin rge qinudirivie adppuarl onveatwl. Aorsk o f 1 October 2015 with this determination. It replaces the Following the Bundesnetzagentur's ruling laying down determination that, to a great extent, was repealed 1ch Jarngueasr iyn 20 De1c4e mthbeeyr a 2r0e 1e3ff,e ccotnivter apcrtos viond edind thiviedy uhaallvye previous determination that, to a great extent, was the criteria for determining individual network Tath teh deis datertme. ination was issued after comprehensive bagreeene ndo cthi aiergde tso n toh elo cnogmepr erteeqnuti re gaupplartorvya la. utAsh ofr ity. repealed at this date. charges in December 2013, contracts on individually public consultation. It includes a new methodology for T1 hJaenseu anroyt i20ic1a4tio thnes ya pparely e iffne accticvoer dapronviced wedit thh tehye h ave agreed charges� no longer require approval. As of cTahlecu delateinrgm iimnabtaiolann wcea csh issargueds, acfhtaenr gceosm tpor tehhee enxsiisvtein g dbueerant nioont isieetd i nto e athceh cgoivmepne ctoentr raecgt.u Mlaotosrt yo fa utthhe ority. The determination was issued after comprehensive 1 January �2014 they are effective provided they have wpuitbhlinc -cdaonys uolbtlaitgioatnio. Ints i nacnldu destrse an gnthewen minegt hinofdoorlmogaytio fonr nTohteisiec antoiotinisc asutiobmnsi ttapped liyn i 2n01 ac4co wrdaeren clooe wkietdh atht ein public consultation. It includes a new methodology for been notified� to the competent regulatory authority. ocabllcigualatiotinngs .i mFubrathlaenrc per cohgrargesess w, cihlla anlsgoe sb teo m thaede e xwisittihn g 20du1ra5t.io Tnh esye tw iner eea acssh geissveend cgronadtruaacllt.y M, porsiot orift tishede calculating imbalance charges, changes to the existing These� notifications� apply in accordance with the rweigtahrind- tdao thy oeb sltiagnatdiaorndsi asantdio sntr oefn bgathlaennciinngg iennfoerrgmya tion anccotoi ricdaintiog ntos siunbamnciittaedl im inp a2c01t, a4n wd ecrhee lcookekde d at in within-day obligations and strengthening information duration set in each given contract. Most of the pobrolidguactiotsn asn. dF uwritthhe irt pprroimgraersys pwriollc aulrseom been mt tahdero uwgihth t he r20et1ro5s. pTehcetyiv weleyr efo arss coemsspeldia grncaed wuaitllhy ,t hperio Erleitcitsredici ty obligations. Further progress will also be made with notifications� � submitted in 2014 were looked at in 2015. erexgcharadn gtoe .th Ate tshtea nsdamared itsimateio, nth oef nbeawla nbcailnagn ceinegrg syys tem Naccetowrodrinkg C thoa rgineasn Orciadl iinmapnaccet (, Satnrod mchNeEcVke).d T he actual regard to the standardisation of balancing energy They were assessed gradually, prioritised according to ipnrcolduudectss s aenpda rwaitteh n iet utprriamliatyry c pharorgcuesr efmore sntta nthdraorudg lho athde creotnrsoumspepcttioivne lday ftoar w coitmh preligaanrcde two itthe t hsueb Emleictttedric ity products and with it primary procurement through the financial impact,� and checked retrospectively for pexrochialen gaen.d A itn ttheerv saalm-mee ttiemred, t hcues ntoemw ebrasl ancdi nagn system nNoettiwicoartkio Cnhsa argre sc hOrecdkineadn acnne (uSatrollym bNy EthVe) .c Tohmep aecttuenatl exchange. At the same time, the new balancing system compliance with the Electricity Network Charges incelundetivse s mepeacrhaatne insmeut forar ltihtye cdhaailrgy eass sfeosrs smtaenndta orfd load rcuolninsumg chpatiomnb edar ttoa dewittehr rmeignaer dw thoe the rs ubbenmcihttmeda rks includes� separate neutrality charges for standard load Ordinance� (StromNEV). The actual consumption data apccroumuile alantded in dteiffrvearle-nmceetse. red customers and an wnoetriei cmaetiot. ns are checked annually by the competent iprofilencentiv ande m einterval-meteredchanism for the d customersaily assess manden tan of rwithuling regard chamb toer theto de submittedtermine w notificationshether bench arema checkedrks incentive� mechanism for the daily assessment of annually� by the competent ruling chamber to deter- Aaccmumuong olattheder dthiffinegres,n tchees .de termination sets out wInderiev imdueatl. network accumulated differences. minecharge whethers - total nubenchmarksmber of were met. additional incentives for traders to actively balance out n otifications in 2014 Among other things, the determination sets out Individual network Reduction their balancing groups using lexibility instruments Among other things, the determination sets out Lc ehgaargel bsa -s itso t a l nu m Nboetir fiocf ations according to sadduchit aiosn baool inkceden sttivoeras gfeo rc atrpaadecitrys. to actively balance out n otifications in 2014 noti ication � Reduction thadditionaleir balan cincentivesing groups for us itradersng lexi btoil iactivelyty instrum balanceents out L egal basis Notifications according to their balancing groups using flexibility instruments Section 19(2) � Isnducihv iadus baloo nektedwo srtko rcahgaerg ceasp acity. noti ication � irst sentence Fsuchinal casu sbookedtomers storageare enti capacity.tled to agree an individual 1,929 approx €111m SSetcrtoiomnN 1E9V( 2) � nIndetiwviodurka cl hnaergtweo wrki tchh athrgeeirs immediate upstream � irst sentence FIndividualinal custo mnetworkers are chargesentitled to agree an individual Section 19(2) 1,929 approx €111m network operator if, on the basis of existing or StromNEV second sentence

pnFinalreedtwioc customersrtekd c hcoanrgseum w arepitthio entitledtnh edair tiam o mtor edt agreeecihatnei canuapl soindividualtr eacomnt ractu al � 304 approx €295m StercotmionN E1V9 (2) cnnetworkoentwdiotiorkn ochargesp, tehreaitro rwithp eaif, ko ntheirlo tahde cbimmediateoanstirsi boutf eioxins upstreamt iisn ge xopre cted to second sentence dpnetworkivrederigcete cd ooperator cnosnidesumrabp if,ltyio onfnro da themt tah basisoer s tiemu cofhln texistingaicnael oours c aoornnn tpredicruaacltu a-l 304 approx €295m StromNEV pctedoeandk consumption iltoioands o, ft haelli ro ffp eatdataakke l oaorat d ttechnicalh ceo snatmribeut n oreiot wncontractual oisr ke xopre cted to Individual network charges tdconditions,rivanesrfgoer cmoants iotheiriden lrea vpeakbelyl. Tfr hloadoem i nt hdcontributioneiv sidimuuall tcahnaergo isues expecteda agrnneeuda lm atoy Total number of npdivergeoeat kb elo lae dconsiderablyss o tfh aalln o 2ff0t%ak o efrom fa tth teh thepe usba simultaneouslmiseh edne tnweotwrko or krannual charge . notifications uInpd tivoi daundal inectludwoinrkg charges Total number of tpeakransf loadorma oftio alln lofftakeevel. Th ate i nthediv sameidual networkcharge a grore ed may 2015 not be less than 20% of the published network charge. notifications transformation level. The individual charge agreed up to and including may not be less than 20% of the published network 2015 Reduction Legal basis Noti ications according to charge. nRedotiuictaiotionn � 1 SLeecgtiaol nb 19as(i2s) Noti 4737icatio n s approaccx €312ordinmg t o � Moreover, final consumers are entitled to an individual first sentence noti ication 1 network charge with their immediate upstream StercotimonN E19V (2) � 4737 approx €312m � network operator if their own consumption of Sfiersctti soenn 19ten(2c)e 375 approx €344m electricity drawn from the public supply network at seStrcoomndN sEeVn tence StromNEV one supply point reaches at least 7,000 hours and, Section 19(2) Moreover, inal consumers are entitled to an individual second sentence 375 approx €344m additionally, exceeds 10 gigawatt hours. In this case, StromNEV network charge with their immediate upstream 1 the individual� charge is to reflect the final consumer's The strong increase compared to the previous years is, among other factors, nMeotrweoovrke ro,p ienralt ocor nifs thumeierr os warne c eonntsitumledp ttoio ann o ifn dividual due to the expiry of around 2000 approvals of reduced individual network actual contribution to lowering or avoiding an increase charges granted in 2012 in accordance with section 19(2) irst sentence of enleetcwtroirckit yc hdarrgawen w firtohm th tehier pimubmliedc siautppe ulyp snterteawmor k at t1hTeh eS tsrtormonNgE iVnc. rease compared to the previous years is, among other factors, in the costs� at the respective network or transforma- � onnetew sourppk olyp peoirantot rr eaif thcheeisr aotw lean csot n7s,0um00p htioounr os,f and, d ue to the expiry of around 2000 approvals of reduced individual network tion level to which the final consumer is connected. Up cAbuseharges gr acasesnted in 2012concerning in accordan cavoidede with secti onetworkn 19(2) irst chargessentence of addelecittrioicnitayll dyr, aewxcne efrdosm 1 0th gei gpauwbalittc shuoppurlsy. Inne thwios rcka saet , the StromNEV. until the end of 2013, such individual network charges Operators of distributed generation plants� are entitled tohnee isnudppivildyu paoil cnhta rrgeaec hise tso a rte lealesct 7th,0e0 0in haol ucorsn,s aumnde, r's required approval from the competent regulatory A buseto c aas chargees conc efromrnin gthe av ooperatorided net wofo therk c hdistributionarges additionally, exceeds 10 gigawatt hours. In this case, aauthority.ctual contribution to lowering or avoiding an increase O peranetworktors of d iintostrib whichuted g etheynera feedtion electricity.plants are e Thentit lchargeed to a the individual charge is to re�lect the �inal consumer's in the costs at the respective network or cAhbaurgsemuste c farsoem scorrespond ctohne coeprenrinagt oto arv otheofi dth enetworked dniesttwribo rutchargek iochna nrg eavoidedetws ork i nbyto tarcatnusaflo cromnatrtiiobutn lioevne tlo t olo wwheircihn gth oer ainvaoli dcoinngs uman ienrcr ise ase � � wOpheicrhafeeding ttohresy o ffe deinids telectricityerliebcuttredici tgye. atnTeh therea tcioh upstreamanrg pela muntss a tnetwork rceo errnetsitpled oorn d to t oa in the costs at the respective network or connected. Up until the end of 2013, such individual tchhea rgnetransformationet wfrormk tchhea rgopee aravo level.toider odf tbhye f deiesdtrinibgut inio enle ncetrtiwciotyrk a itn tthoe transformation level to which the �inal consumer is network charges required approval from the uwphsitcrhea thme yn efetwedo rekle octrr tircaitnys. fTohrme cahtioargn ele muvels. t correspond to comnnpeectteednt. rUepg ulnattiol rtyh ea utenhdo orift 2y.013 , such individual � the neWithtwor keconomic charge a voimportanceided by fee increasingding in ele cfortri cnetworkity at the network charges required approval from the upstrWeaoperators,imth neectowno customersmrki co rim trpaonrst fandaonrcme operatorsa itniocrnea lesvine lofg. f oplants,r netw thisork competent regulatory authority. regulation causes an increasing number of problems Wthatith haveecon obeenmic ibroughtmportan upce ininc variousreasing applicationsfor network for RULINGS, ACTIVITIES AND PROCEEDINGS | ENERGIE | 35

investigation of abuse. The competent ruling chamber results from the fact that the physical offtake load, that of the Bundesnetzagentur took various decisions on increases strongly when reserve capacity is drawn avoided network charges that are classified according upon, is not taken account of in the calculation of the to subject in the following: avoided network charges.

• No avoided network charges for feeding in electricity In an abuse case, the Bundesnetzagentur therefore in extra high voltage networks decided that the maximum offtake power may not be • Operators of generating installations that are reduced by the given amount of reserve capacity. To directly or indirectly connected to the extra high determine the power avoided with regard to the voltage network are not entitled to payment of calculation of charges for distributed feed-in, only the avoided network charges from operators to whose difference, measured in kilowatts, between the networks the installations are connected. Generating simultaneous annual peak load of all offtake at the installations that feed electricity into the extra high network and transformation levels and the maximum voltage network, either directly or via transforma- offtake load at the upstream network and transforma- tion, are not considered to be distributed generation tion levels is relevant. plants. • Relevant network or transformation level for the Abuse cases concerning pooling calculation of the charges for distributed feed-in. Two applications were submitted to the Bundesnetz- • The calculation of the charges for distributed feed-in agentur in 2015 to open abuse proceedings in is done based on the network charges payable for the accordance with section 31 EnWG with regard to the upstream network or transformation level above the application of section 17(2a) StromNEV. In both pro- actual connection situation. This is especially ceedings the parties argued over whether the condi- relevant when the network operator concerned tions for summarised billing of offtake points (known operates the same network or transformation level as as "pooling") are fulfilled if the offtake points are not the upstream network operator (so called "pan- connected at the same network node but are connected caking") while distributed feed-in is simultaneously to each other via a connection on the customer side. taking place on this level. In an abuse case, the Bundesnetzagentur decided that the "upstream" In an abuse case, the Bundesnetzagentur decided that network or transformation levels are to be under- the conditions for pooling are met with regard to stood as comprehending all networks. According to circumstances in the connection as described in that this decision, two network operators that are case. According to this decision, a connection within upstream or downstream from one another on the the meaning of section 17(2a) StromNEV is deemed to same voltage level do not constitute different also exist if only an inductive connection is present network levels within the meaning of section 18 which enables a large portion of the offtake to be StromNEV. shifted. The Bundesnetzagentur thus did not follow a • No consideration of reserve capacity in the calcula- strict technical interpretation of the concept of a tion of charges for distributed feed-in. "galvanic connection" since it is inconsistent with the provisions of EnWG and StromNEV. Some network operators offer so-called reserve capacity. This is not a service provided to the network Expansion factor for electricity operator but rather an accommodation vis-à-vis the In accordance with section 10 of the Incentive Regula- network user to prevent a physical peak load from tion Ordinance (ARegV), network operators can apply influencing the amount billed. It enables final consu- to the regulatory authority (by 30 June of each year) for mers to protect themselves from being billed with the an adjustment of their revenue cap based on an general charge in cases of short-term use of increased expansion factor if there is a lasting change in their capacity. The contracting parties presume that peak supply services and if the operator's total costs, after loads outside of the annual peak load occur in a deduction of the cost components that cannot be controlled manner. The network user defines the controlled on a long-term basis, rise by at least 0.5%. amount of reserve capacity to be ordered, which must be paid for regardless of the amount of it that is Expansion factor for gas actually drawn upon. In 2015, the distribution system operators were able to once again apply for an expansion factor for their There have been a few cases in which the consideration investments in this area if there is a lasting change in of reserve capacity in calculating the power avoided led their supply services. This factor ensures that costs to a higher amount of avoided network charges. This resulting from a lasting change in the operator's supply 36 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

services during the regulatory period are taken into In the future, the Bundesnetzagentur anticipates account when determining the revenue cap. A lasting considerably more work in redefining the annual change in supply services is deemed to have occurred if revenue cap as per section 26(2) ARegV. the parameters cited in section 10(2) sentence 2 of the Incentive Regulation Ordinance (ARegV) change on a Transfer of gas networks long-term basis and to a significant extent. In 2015, a In 2015, a total of 33 applications concerning network total of 85 applications for approval of an expansion transfers, mergers and splits in the gas sector were factor were made. submitted under section 26(2) ARegV to the Bundes- netzagentur. The operators should state in their By 30 June 2015, a total of 109 applications for an applications which percentage of the revenues is to be adjustment of the revenue cap were submitted for the assigned to the part of the network being transferred 2016 year in the electricity sector. and which percentage is to be assigned to the remain- ing part. The Bundesnetzagentur and the regulatory Proceedings under section 26(2) ARegV authorities of the federal states (when they are invol- Transfer of electricity networks ved) are to ensure in particular that the total of the As per section 26(2) ARegV, when part of an energy revenue's parts after the split does not exceed the supply network is transferred to another operator and revenue cap that was already set. On 6 October 2015, a when networks are split, the revenue caps are to be set ruling adopted by the Federal Court of Justice con- anew upon application by the operators concerned in firmed that, in the event of a partial network transfer, accordance with section 32(1) para 1 ARegV. Seven the Bundesnetzagentur rightly denied the recipient applications were submitted to the Bundesnetzagentur operator's claim for obtaining information from the in 2015 in the electricity sector to redefine the annual donor operator under section 26(2) ARegV. revenue cap in accordance with section 26(2) ARegV. With regard to section 26(2) ARegV, the Federal Court On 6 October 2015, the Federal Court of Justice rejected of Justice used this decision to put in concrete terms an appeal in an abuse case. The matter in dispute in what the Bundesnetzagentur's duties are in its reviews. this case was whether an entitlement to information A joint application by the network operators concerned arises from section 26(2) ARegV that can be executed does not release the Bundesnetzagentur from the through an abuse case in accordance with section 31(1) obligation to independently determine the appropriate EnWG. The Federal Court of Justice decided that allocation of the revenue cap. According to the Court, section 26(2) ARegV does not provide an entitlement to the network operators concerned are not allowed to information. set the division of revenue in such a binding way as to leave the regulatory authority to simply "rubber stamp" Additionally, the Federal Court of Justice decided that, it. in accordance with section 54(2) fifth sentence EnWG, the regulatory authority that is responsible for Passing on costs horizontally redefining the revenue caps in accordance with section Gas transports between market area-wide transmis- 26(2) ARegV is the same that set the revenue cap to be sion system operators are currently not charged for. split in the first place. Only the regulatory authority This means that costs are not allocated to the inter- that originally set the revenue cap has the key data that connection points between the network operators even is required for the splitting process. though they are incurred there. This, following the two-contract model, distorts pricing and provides the Moreover, the competent regulatory authority is wrong price signals. This can create disincentives obliged as per section 26(2) ARegV to split the revenue within the German capacity market. cap. According to the Court, the originally set revenue Over the last few years, the competent ruling chamber cap generally loses its basis if significant portions of the noticed that increasing use is being made of the free of network are transferred. This ensues from section 26(2) charge exchange of energy between transmission first sentence in conjunction with section 32(1) para 1 system operators and a danger that wrong price signals ARegV. Consequently, the Court said that an applica- in the network charges will arise from this therefore tion submitted by one of the network operators con- exists. This is why the Chamber opened determination cerned is enough for revenue cap splitting to be proceedings to adequately address the problem. The implemented. Under section 26(2) second sentence and chamber is expected to issue its determination in 2016. section 3 ARegV, the redefining of revenue caps may take place in such a way that the subnetworks concer- ned are each allocated a share of the set revenue cap. RULINGS, ACTIVITIES AND PROCEEDINGS | ENERGIE | 37

Pricing of entry and exit capacity ("BEATE") The bidders must submit bids that are based on a In 2014, the competent ruling chamber opened defined value to be applied in cents per kilowatt hour determination proceedings with a view to properly (bid value) and that are based on the installation's determining network charges by stipulating require- capacity, which must be provided in kilowatts (bid ments for converting annual capacity charges into volume): The lowest value bids will be accepted first charges for sub-annual capacity rights and to properly until the volume of electricity set for the given round determining network charges. The aim of this determi- of bidding has been exhausted. Successful bidders must nation, in addition to the requirements for calculating submit an application claiming entitlement to financi- charges for sub-annual capacity rights also includes al support once the installation has been built and has laying down the requirements for calculating charges started operating. for interruptible capacity and for entry and exit capacity at gas storage facilities. In 2014, several The Bundesnetzagentur provided expert advice prior hearings had already been held with representatives of to the adoption of the FFAV (Ground-mounted PV the gas sector on the potential content of the determi- Auction Ordinance). It was important not to set the nation. Market participants were given several requirements to be met by an applicant for participa- opportunities to make comments. The determination tion in the proceedings too high to prevent potential was issued in March 2015. bidders from being discouraged and, at the same time, to reach a high implementation rate for the planned Efficiency benchmarking among gas transmission projects. Certain material and financial requirements system operators (TSOs) and distribution system were therefore determined, whereby the financial operators (DSOs) for the third regulatory period requirements decrease as project construction (in legal In spring 2016, the competent ruling chamber will terms) advances. determine the requirements for data collection for efficiency benchmarking for the TSOs and DSOs for Furthermore, forms were created. They serve the the third regulatory period (2018 - 2022). purpose of facilitating administrative procedures, making it easier to review information concerning a To carry out efficiency benchmarking in accordance bid. Moreover, the completion and submission of the with section 22(3) first, second and third sentences, the forms, which is mandatory for bidders, serves the TSOs provided the necessary load, structure and sales bidders' own interest, as all of the information required data for the 2015 business year including historic for the bid is taken from the forms. figures to the Bundesnetzagentur electronically by 1 April 2016. In total, three rounds of auctions were held in 2015. The DSOs are to transfer their data to the Bundesnetz- Each round begins with an announcement in which agentur by 1 August 2016. the deadline for submitting bids, the volume that can be bid for and the forms to be filled out and submitted Cost examination to determine the base level for are all named. Bids are opened and reviewed once the operators of gas supply networks deadline for bids has passed. In the process, attention is By 1 July 2016, all gas network operators are obliged to also paid to whether the required forms had been used submit data for the cost examination to the Bundes- and whether all of the required documents had been netzagentur to establish the base level for setting attached to the application. All bidders are obliged to revenue caps. 2015 is the base year here. In derogation meet both above-mentioned requirements upon the of this, network operators taking part in a simplified submission of a bid; corrections thereafter are not procedure are obliged to submit cost data by 1 Septem- possible. ber 2016. All requirements for the submission of a bid must be Auctions for ground-mounted photovoltaic systems met upon submission. Upon review, bids are ranked The Bundesnetzagentur has been tasked with carrying and awards are granted – starting with the bid with the out the new auction procedures for determining the lowest value, until the set volume of the bid has been level of financial support for ground-mounted exhausted. photovoltaic installations since 2015. Instead of being set by law, the level of financial support for these ground-mounted PV systems is now to be determined competitively through auctions. 38 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

The pay-as-bid price rule applied for the first round in Market Transparency Unit and REMIT tasks April, whereby bids are accepted at the pay as bid price Together with ACER, the Bundesnetzagentur's Market stated in the actual bid. Bid volumes of 150 MW were Transparency Unit (MTU) monitors trading in whole- auctioned. 170 bids with a volume of 715 MW were sale energy products to detect and prevent trading submitted on this date. based on inside information and market manipulation. 28 bids with an average value of 9.17 ct/kWh were accepted. The 150 MW set for the second round of With the registration of market participants in early bidding in August were once again oversubscribed with March 2015, the Bundesnetzagentur created a base for bids amounting to 558 MW. The process of determin- data reporting to ACER. Market participants that have ing the price is done through a uniform price auction, to report transaction and trade data to ACER are meaning that all successful bids had a price set at required to first register with the national regulatory 8.49 ct/kWh. This value was once again underbid in the authority. In 2015, the Bundesnetzagentur registered a third round in December: The uniform price auction total of 1,331 market participants using CEREMP3 with ended with a price set at 8 ct/kWh. The 127 bids each market participant receiving an ACER registration received amounted to 562 MW, while 200 MW was set code. for the auction. The diverse structure of the bidders was also reflected in the successful bids. Even if the The Bundesnetzagentur thus supported data reporting majority of the bids were submitted by limited liability for standard contracts that was launched, according to companies, it was still possible for some of the bids that schedule, on 7 October 2015. Non-standard contracts were submitted by cooperatives and private persons to are to be reported from 7 April 2016. In the meantime, be accepted. Geographically, contracts were awarded the Bundesnetzagentur established the necessary for projects in all large surface federal states. Most of technical requirements on the IT side to be able to the successful bids, however, concerned projects in receive relevant data for the German market area from Brandenburg, Bavaria and Mecklenburg-Western ACER. The future monitoring activity relating to the Pomerania. The first applications for entitlement to wholesale energy market is to be based on this data. financial support were filed in December 2015. In 2015, the Bundesnetzagentur obtained seven Guidelines for self-suppliers notifications of suspicious behaviour according to With the introduction of the Renewable Energy Article 15 REMIT. All cases related to a possible breach Sources Act (EEG) 2014 revision, an EEG surcharge of the prohibition of market manipulation. Investiga- must now essentially be paid for any type of electricity tions are still underway with regard to six cases. One of consumption. Therefore, even self-suppliers are now the breaches in question is a suspected illegal blocking required to pay an EEG surcharge for electricity they of cross-border transmission capacity without the produce and consume themselves. There are a few intention of actually using it. This behaviour can exceptions for certain cases of self-supply. impact several market areas. This is why the case is Several queries were submitted to the Bundesnetzagen- being investigated together with the European tur concerning this issue. The Bundesnetzagentur regulatory authorities concerned. Two further cases draftedguidelines to streamline these questions and also concern not just the German market area, but also answer them as comprehensively as possible. This draft the European market area. For this reason, data from sets out how the Bundesnetzagentur interprets the new several European market areas must be collected and regulations of the 2014 EEG in the area of self-supply. evaluated for the purpose of investigation. The cases To increase the stakeholders' legal certainty, the were transferred to ACER, which is coordinating the fundamental legal principles of these new regulations investigation with the Bundesnetzagentur and the alongside answers to several questions relating to their other relevant regulatory authorities. With regard to practical application are laid out in the guidelines. The three notifications from December 2015, the Bundes- guidelines were presented to interested parties and the netzagentur is still checking whether they are actually public who also had the opportunity to comment on cases of suspected breaches. A case brought forward in them over the course of a consultation. During a 2014 was closed after being investigated in 2015. workshop, participants of the consultation were once Manipulation of wholesale gas products could not be again given the opportunity to state their views and ascertained in this case. discuss matters individually with competent Bundes- netzagentur staff. The guidelines are to be finalised and published in 2016.

3 Centralised European Register for Market Participants (CEREMP) RULINGS, ACTIVITIES AND PROCEEDINGS | ENERGIE | 39

Evaluation report on the application of Germany's Here again, the use of interruptible loads was not Interruptible Loads Ordinance (AbLaV) essential to eliminate the network congestion. The Bundesnetzagentur's report presented to the Federal Ministry for Economic Affairs and Energy Evaluation report on individual network charges described and examined the use of interruptible loads The Bundesnetzagentur drew up an evaluation report in the period from January 2013 to March 2015. The as required by law on the effects on the operation of key question here was whether and how far voluntary electricity supply networks of individual network agreements – relating to interruptible loads – with charges for high consumption customers. The report transmission system operators on the basis of the looked at how far measures that serve to balance Ordinance were suitable and essential as a means to electricity consumption with supply should be taken remove threats or disruptions to the security and into account when calculating the reduction in reliability of the electricity supply system. The report network charges, and at the scope for action. It also was published as a Bundestag printed paper4. The looked at the procedure and rules established in the Bundesnetzagentur came to the conclusion that in the German Electricity Network Charges Ordinance period under review interruptible loads were suitable (StromNEV). The following conclusions were drawn: but not essential as a means to remove threats or Some aspects of the current regime need to be revised disruptions to the security and reliability of the in light of the energy transition. In particular, only electricity supply system. It was recommended that those final consumers whose offtake patterns have a more appropriate ways be developed to identify positive effect on the electricity supply networks potential for flexibility. should benefit from a reduction in charges. The changes in the power generation landscape and the The report looked at how the loads from all the six high demands on the electricity networks mean that framework agreements with interruptible load the flexibility of all market players is becoming providers were used and whether other options to increasingly important. The report's conclusions will resolve the problem had been available at the time to feed into subsequent discussions on the future scheme the transmission system operators. With one excep- for individual network charges. tion, all of the loads contracted were used at least once. In around 60.3% of the cases (35 requests) the loads Evaluating incentive regulation were used to maintain system balance, which is similar Since 2009 the revenue that gas and electricity network to using positive tertiary reserve. In the remaining operators are allowed to generate has been determined 39.7% or so of the cases (23 requests) the loads were by Germany's Incentive Regulation Ordinance used as part of longer redispatching measures. The (ARegV). The Bundesnetzagentur was required by law cases showed that interruptible loads are suitable for in 2014 to draw up an evaluation report on incentive use for system services. regulation. The evaluation focused on how network operators' investment behaviour had developed since In those instances where interruptible loads were used the regulatory scheme came into force and on possible to maintain system balance, the transmission system barriers to investment. It also looked at how the operators had already used relatively large amounts of Ordinance affected efficiency, innovation and quality balancing energy. The volumes of contracted balancing of supply and at the practicability of the Ordinance. In reserves together with the balances for the control January 2015 the Bundesnetzagentur presented its areas show, however, that the transmission system report to the Federal Ministry for Economic Affairs operators still had sufficient reserves available and that and Energy. The report represents the first step in the use of the loads was useful but not absolutely neces- process of devising and implementing changes to the sary. The use of interruptible loads was therefore not German incentive-based regime. The evaluation essential to maintain system balance. In those instan- showed that the basic concept of incentive regulation ces where interruptible loads were used as part of redis- has essentially proven itself. With its fixed budget, patching, it was not clear which other potential options efficiency benchmarking and additional expansion had been available to the transmission system opera- factor, the regulatory regime gives operators scope to tors. It was, however, clear that the requesting trans- fund necessary investments and apply efficient mission system operator in the area concerned had not solutions to save costs. taken any measures as referred to in section 13(2) of the German Energy Act (EnWG) to stabilise the system. This indicates that there was no special threat to the transmission network.

4 Printed paper 18/6096 of 22 September 2015 40 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

However, the report found that the present scheme is Further development of the electricity network not absolutely ideal and identified a number of possible charges scheme improvements to better reflect the challenges network In its evaluation report on incentive regulation the operators will face in the future. One proposal is to Bundesnetzagentur looked at how to shape the abolish the time delay associated with the expansion regulatory framework for recognising incurred costs. factor. The next step required is to look at how to set the prices charged by the network operators on the basis of the The main challenge in the coming years is grid approved costs. expansion. More than 97% of renewable installations are connected to the grid at distribution network level. A key factor here is the regional differences in network The future regulatory framework therefore needs to charges, which are due both to traditional factors such ensure that the funds required to expand the distribu- as the degree of network usage and population density tion network are available to the operators in good and to the integration of renewable energy and the time. At the same time, however, the framework needs "avoided" network charges for distributed generation. to provide incentives so that potential savings in Contrary to previous assumptions, volatile and network expansion are realised through the use of increasingly surplus distributed feed-in mean that no intelligent and innovative solutions and procedures are upstream network infrastructure costs are avoided. streamlined further. The rules for avoided network charges should therefore be abolished. This would be an important step in The Bundesnetzagentur, together with many of those reducing the differences in charges. Another possible involved in the evaluation process, is in favour of way to level out the differences is to set the same incorporating the proposed improvements into the charge for the whole of the transmission network level, current incentive regulation scheme and thus take although one general charge across all network levels account of the need of the operators and investors for would not be appropriate. continuity and stability. This does not rule out considering more fundamental alternatives in the long The Bundesnetzagentur also recommends taking a term as well. more cost-reflective approach to financing network costs by requiring people who generate their own However, the Bundesnetzagentur is not in favour of the electricity to make a fair contribution since they still investment cost difference model discussed as an use the general supply network to fall back on. alternative to incentive-based regulation. This model One further question to be looked at is how far variable would lead to excess returns and would make the network charges could help to synchronise electricity energy transition unnecessarily expensive, with supply and demand. The Bundesnetzagentur is against additional costs of up to €8bn – depending on the variable network charges, which are beneficial design – compared to the consistent capital expendi- primarily to the market and which could result in ture true-up model also discussed. significant synchronisation of consumption and load behaviour, in turn leading to new network congestion. In the present discussions the Bundesnetzagentur has reaffirmed its vision for a future incentive regulation By contrast, it welcomes the idea of consumers scheme, namely one which should create the right participating in the balancing market, which is incentives for necessary network expansion, ensure beneficial to the network. To promote flexible loads ongoing replacement, deliver potential savings being offered in the balancing market, the Bundesnetz- through innovative solutions, and enable congestion agentur is in favour of excluding peaks resulting from management. negative balancing reserves when calculating the annual peak load of a provider that is used for billing. As part of the evaluation process the Bundesnetzagen- tur also developed proposals to enhance transparency, The network charges scheme ensures that the costs are a topic that has gained relevance in public discussions shared between the users on a relatively cost-reflective in the course of 2015. basis – and hence the network charge has a positive effect on the energy transition. And that is how it The final report is available together with the accom- should stay. Above all, network charges should not be panying studies at www.bundesnetzagentur.de/ misused with the intention of influencing develop- ARegVBericht. The report provides the basis for the ments not connected with network usage. The Energie- ongoing discussions. wende must remain coupled with a fair distribution of the burden. RULINGS, ACTIVITIES AND PROCEEDINGS | ENERGIE | 41

RULINGS, ACTIVITIES, PROCEEDINGS | ENERGIE | 41

The evaluation report on incentive regulation can be Analysis of storage facilities found at www.bundesnetzagentur.de/ARegVBericht. The Bundesnetzagentur took an active part in 2015 in has a positive effect on the energy transition. And that discussions on the security of natural gas supply in is how it should stay. Above all, network charges should The IT security requirements catalogue can be found IT security requirements catalogue Germany. Natural gas storage facilities were a particu- not be misused with the intention of influencing at www. bundesnetzagentur.de/it- The protection of telecommunications and electronic lar focus at both national and European level. The developments not connected with network usage. The sicherheitskatalog-energie. data processing systems is becoming ever more discussions analysed storage levels above all for natural Energiewende must remain coupled with a fair important for the secure operation of the electricity gas storage facilities in Germany. distribution of the burden. Analysis of storage facilities and gas networks. The use of modern information and The Bundesnetzagentur took an active part in 2015 in communications technologies has a number of In some cases, supply contract prices for natural gas, in The evaluation report on incentive regulation can be discussions on the security of natural gas supply in advantages. Yet the growing dependence on these particular for Russian gas, are still linked to the price of found at www.bundesnetzagentur.de/ARegVBericht. Germany. Natural gas storage facilities were a systems, in particular for network control, is not oil, usually with a time lag of around six months. The particular focus at both national and European level. without risk to security of supply. large fall in the oil price at the end of 2014 meant that IT security requirements catalogue The discussions analysed storage levels above all for natural gas dealers expected gas from these supply The protection of telecommunications and electronic natural gas storage facilities in Germany. In August 2015 the Bundesnetzagentur therefore contracts to be cheaper in summer 2015 and so data processing systems is becoming ever more published a catalogue of IT security requirements emptied reservoirs in order to be able to fill them with important for the secure operation of the electricity and In some cases, supply contract prices for natural gas, in drawn up in consultation with the Federal Office for the cheaper gas in the summer. The fact that the oil gas networks. The use of modern information and particular for Russian gas, are still linked to the price of Information Security (BSI). The catalogue is the first of price remained low throughout the summer meant communications technologies has a number of oil, usually with a time lag of around six months. The its kind, laying down national IT security standards to that there was no incentive for the dealers to inject gas advantages. Yet the growing dependence on these large fall in the oil price at the end of 2014 meant that be implemented by all electricity and gas network into storage, with the result that the storage level at the systems, in particular for network control, is not natural gas dealers expected gas from these supply operators by the beginning of 2018 and requiring beginning of the winter and the withdrawal period without risk to security of supply. contracts to be cheaper in summer 2015 and so emptied certification. The Bundesnetzagentur is developing a stood at only just under 80%. Hardly any of the gas has reservoirs in order to be able to fill them with the certificate together with the German accreditation been withdrawn from storage during the winter period In August 2015 the Bundesnetzagentur therefore cheaper gas in the summer. The fact that the oil price body especially for this purpose. so far, however, because of the high liquidity and low published a catalogue of IT security requirements remained low throughout the summer meant that there prices in the trading markets. Gas prices in winter 2015 drawn up in consultation with the Federal Office for was no incentive for the dealers to inject gas into The core requirement is the establishment of an were more than €8/MWh lower than prices in the Information Security (BSI). The catalogue is the first of storage, with the result that the storage level at the information security management system (ISMS) with previous winter. This means that current storage levels its kind, laying down national IT security standards to beginning of the winter and the withdrawal period the purpose of ensuring that network operators' – unlike levels at the beginning of the winter – are be implemented by all electricity and gas network stood at only just under 80%. Hardly any of the gas has internal information security is seen not as a set of among the highest over the past five years, and thus operators by the beginning of 2018 and requiring been withdrawn from storage during the winter period individual measures but as a permanent process to be the level of availability of natural gas for the rest of certification. The Bundesnetzagentur is developing a so far, however, because of the high liquidity and low continuously monitored and improved. winter 2015/16 is very high. certificate together with the German accreditation prices in the trading markets. Gas prices in winter 2015

body especially for this purpose. were more than €8/MWh lower than prices in the previous winter. This means that current storage levels The IT security requirements catalogue can be found at The core requirement is the establishment of an – unlike levels at the beginning of the winter – are www. bundesnetzagentur.de/it-sicherheitskatalog- information security management system (ISMS) with among the highest over the past five years, and thus the energie. the purpose of ensuring that network operators' level of availability of natural gas for the rest of winter internal information security is seen not as a set of 2015/16 is very high. individual measures but as a permanent process to be continuously monitored and improved.

Storage levels: 2015/2016 compared to previous years Storage level (bn m³)

1 Apr 1 May 1 Jun 1 Jul 1 Aug 1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 1 Feb 1 Mar

Range of storage levels (previous five years) Storage levels (current year)

Source: GSE; own graph 42 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Gas network codes International cooperation The Bundesnetzagentur was involved in the work on Realisation of the internal the network code on harmonised transmission tariff structures for gas (TAR NC). The harmonisation of electricity market and secu- tariff structures for the use of the gas transmission networks is an important contribution to implement- rity of electricity supply in ing the third internal energy market package and Europe are the driving forces achieving the aim of the free movement of goods and services in the energy sector through promoting behind international cross-border (gas) trade.

cooperation. The network code includes rules on the application of uniform price methodologies to ensure transparent, cost-reflective and non-discriminatory transmission tariffs at interconnection points.

The use of specified multipliers aims to achieve cost-reflective pricing and promote short-term trade. The network code sets out detailed publication requirements (allowed revenue, regulatory account details, parameters used for pricing, etc) to enable network users to better understand how the tariffs for the different transmission services are set and forecast how they may change.

The network code is also to include rules on applying economic tests and pricing new capacities at new and existing interconnection points. The recommendation on the network code issued by ACER to the European Work within the Agency for the Cooperation of Energy Commission was supported by the Bundesnetzagentur Regulators but failed to obtain a majority vote from the Board of The Bundesnetzagentur plays an active role on the Regulators, hence the Commission is now responsible committees of the Agency for the Cooperation of for final work on the network code. The comitology Energy Regulators (ACER), promoting viable solutions procedure is due to begin in April 2016. at European level. In 2015 work was done on supplementing the current Electricity network codes network code on capacity allocation mechanisms in The Bundesnetzagentur was again actively involved in gas transmission systems with rules for a market-based 2015 in the work on the network codes and guidelines allocation procedure for incremental capacity at on demand connection, system operation, electricity interconnection points and for the creation of new balancing and forward capacity allocation. The capacity. The Bundesnetzagentur was actively involved network code on demand connection and the guideline as co-chair of the ACER CAM Task Force in developing, on forward capacity allocation received a positive vote reviewing and consulting on the proposal for amend- from the European Commission's comitology commit- ments to the Commission Regulation. In October 2015 tee in 2015 and will enter into force in 2016. The the proposal was sent to the Commission with the network code on electricity balancing and the guide- recommendation that the Regulation be adopted with line on system operation are expected to be approved the amendments. in comitology in 2016. In this context, the Bundesnetz- agentur will provide close support and advice to the The comitology procedure for the amendment is set to Federal Ministry for Economic Affairs and Energy. The take place in the first half of 2016 together with the guideline on capacity allocation and congestion procedure for the network code on harmonised management adopted at the end of 2014 entered into transmission tariff structures. The Bundesnetzagentur force on 14 August 2015 as the Commission Regulation will support and advise the Federal Ministry for Econo- establishing a guideline on capacity allocation and mic Affairs and Energy in these procedures. congestion management. INTERNATIONAL COOPERATION | ENERGIE | 43

Market coupling Flow-based capacity calculation is set to be introduced A key component of the European internal electricity in the Central Eastern European (CEE) region together market is market coupling. Market coupling enables all with coupling of the day-ahead electricity markets in available cross-border capacities to be taken into 2018. The Bundesnetzagentur supports all those account automatically when electricity volumes are involved in both projects in finding a way to enable the traded, without the need for market players to sepa- use of a common method as early as possible. rately acquire cross-border capacity. This in turn enables losses from miscalculating trade flows to be Council of European Energy Regulators avoided. Since 2005 the Bundesnetzagentur has been an active member of the independent Council of European At the beginning of 2015 coupling of the day-ahead Energy Regulators (CEER). Since ACER was established electricity markets in Europe was extended to include in 2011, CEER has concentrated on consumer protec- the northern borders of Italy and thus in total cover tion, regulatory aspects of retail markets, promoting 85% of European electricity consumption. Together renewable energy, and international cooperation. In with its Danish and Italian colleagues the Bundesnetz- addition, CEER supports ACER in many aspects of its agentur, as the regulatory authority with lead responsi- work. bility, supports the plans to progressively extend the market coupling project to cover further regions and Florence School of Regulation markets. Key joint decisions from all the European The Florence School of Regulation (FSR) and the regulatory authorities are anticipated in 2016 and Bundesnetzagentur held their seventh joint forum on beyond to gradually formalise the projects currently legal issues of energy regulation in Berlin in February established on a voluntary basis. 2015. The main issues of discussion were transmission system operator certification, the future role of Capacity allocation and congestion management distribution system operators, and projects of common guideline interest (PCIs) Alongside the coupling of the day-ahead electricity markets the Commission Regulation establishing a guideline on capacity allocation and congestion management provides the legal basis for coupling the intraday electricity markets and organising cross- border congestion management (redispatching). The first step in 2015 was to designate a nominated electricity market operator (NEMO). The Bundesnetz- agentur designated EPEX Spot as the NEMO for Germa- ny. The task of a NEMO is to perform market coupling and guarantee that the relevant criteria are met. NEMOs are designated for a term of four years.

Market coupling depends crucially on the allocation of cross-border capacity. In May 2015 the Central Western Europe (CWE) market coupling partners introduced the flow-based method for capacity calculation, replacing the available transfer capacity (ATC) based method. The flow-based method takes account of the whole grid instead of only cross-border transmission capacity. Better coordination between the transmis- sion system operators involved is also essential so that more capacity can be made available for cross-border trade. TELECOMMUNICATIONS

Digital networks in transition Fast and efficient internet access makes smaller towns and rural regions more attractive to companies. To accommodate growing data volumes in mobile networks, the Bundesnetz- agentur auctioned off additional frequencies in summer 2015. In the fixed network it is promoting the broadband rollout process through investment-friendly regulation.

Content

Market watch 46 Consumer protection and advice 62 Rulings, activities and proceedings 72 International cooperation 86 The Bundesnetzagentur laid the groundwork for improving the rollout of broadband in 2015. Growing data volumes in mobile and fixed networks are highlighting the importance of high-speed blanket broadband coverage for Germany. The spectrum auction in summer 2015 will contribute to significant investments in networks. The Bundesnetzagentur is also overseeing the process of introducing vectoring technology, with the aim of facilitating the broadband rollout process and safeguarding competition.

Digitisation is also influencing the business models of established telecommunications companies. Over-the- top (OTT) providers such as Amazon, Google and WhatsApp are increasingly finding themselves in competition with conventional telecommunications products. In this context, the Bundesnetzagentur is focusing on developing a regulatory framework which strikes a balance between the obligations of OTT service providers and conventional telecommunica- tions service providers. In doing so, it must ensure that all companies benefit from a reliable and consistent legal framework which provides a stable basis for long-term investment decisions.

In 2015 the Bundesnetzagentur’s Consumer Advice service once again received numerous enquiries regarding increasingly complex information and communication technologies, diversified business models and dubious practices. In total it received 178,000 enquiries and complaints relating to telecom- munications – and was able to provide assistance to many consumers. 46 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Market watch Telecommunications market as a whole Optical fibre connections External revenue According to the Bundesnetzagentur’s preliminary were available to more than calculations, external revenue in the telecommunica- tions market increased to around €57.2bn in 2015. This two million households in represents a year-on-year increase of €0.4bn (0.7%). 2015, but were only used Both alternative providers and Deutsche Telekom AG by just under 20% of this (DTAG) achieved revenue growth in 2015. With external revenue up €0.3bn to €32.1bn, alternative number. This ratio will only providers achieved a slight improvement in the improve with new services positive development of the previous year (compared with an increase of €0.2bn in 2014). For the first time requiring higher bandwidths. since 2005, DTAG’s external revenue (€25.1bn) excee- At the same infrastructures ded the level of the previous year by €0.1bn. need to be future-proofed As in the previous year, alternative providers accoun- ted for a market share of around 56% in 2015. now. A breakdown of revenue by conventional telecommu- nications networks1), HFC networks2) and mobile networks shows that there was a further reduction in revenue in conventional telecommunications markets in 2015. According to initial calculations, external revenue in 2015 fell by almost 6% compared with the previous year. Some 76% of this revenue was generated from retail business. This includes external revenue generated from services for private, commercial and public sector subscribers. Wholesale services for fixed-network and mobile operators and service providers outside of the DTAG group accounted for just under one fifth of external revenue. These services include wholesale products for voice traffic/telephony, broadband/internet and infrastructure services.

External revenue generated in HFC networks con- tinued to grow. In 2015 it increased by almost 7% on the previous year to €5.09bn. However, its market share was still around 9% less than that of conventional telecommunications networks (38%) and mobile services (47%). The lion’s share of this revenue (92%) was attributable to retail.

1 Conventional telecommunications networks are defined as networks based on copper or optical fibre cables.

2 HFC networks are defined as networks with a hybrid fibre coaxial (HFC) architec- ture. MARKET WATCH | TELECOMMUNICATIONS | 47

MARKET WATCH | TELECOMMUNICATIONS | 47

MARKET WATCH | TELECOMMUNICATIONS | 47

External revenue by segment

External revenue by segment 2013¹ 2014 2015² €bn % €bn % €bn %

⁾ ⁾ 2013¹ 2014 2015² External revenue in the telecommunications market 57.0 56.8 57.2 €bn % €bn % €bn %

⁾ ⁾ External revenue in conventional External revenue in the telecommunications market 5723.0.69 100 5623.8.19 57.221 .89 telecommunications networks 100³ 100³ External revenue in conventional Via retail 2318.69.47 100 78 23.1719. 97 77⁾ 21.8916 .68 ⁾ 76 telecommunications networks 100³ 100³ ⁾ ⁾ VViai ar ewtahiol lesale 18.474.69 78 20 17.974. 66 77 20 16.684 .70 76 21 Other external revenue 0.53 2 0.56 2 0.51 2 Via wholesale 4.69 20 4.66 20 4.70 21 ExOttehrenra el xrteevrennalu ree vine nuHFeC networks 0.534.48 2100 0.564. 77 2100 0.515 .09 1002

ExteVrinaa rle rteavile nue in HFC networks 4.484.12 100 92 4.774. 41 100 92 5.094 .70 100 92

VViai ar ewtahiol lesale 4.120.12 92 3 4.410. 09 92 2 4.700 .09 92 2 VOiat hwehro elextsearlne al revenue 0.120.24 3 5 0.090. 27 2 6 0.090 .30 2 6 EOxttehrenra el xrteevrnenalu ree vferonume mobile services 026.24.22 5100 0.2627. 12 6100 0.3026 .98 1006

ExteVrinaa rle rteavile (neuxec lfudroimng m teorbmilein sael revquiceips ment) 2618.22.81 100 72 26.1812. 48 100 71 26.9818 .56 100 69

VViai ar ewtahilo l(eesxaclleud ing terminal equipment) 18.813.07 72 12 18.483. 14 71 12 18.563 .02 69 11 VViai aw theormlesinaalel equipment 3.073.27 12 12 3.143. 44 12 13 3.024 .32 11 16 VOiat hteermr eixntaelr neaqul riepvmenuente 3.271.07 12 4 3.441. 06 13 4 4.321 .08 16 4 OOththeer re exxtteerrnnaall rreevvenue 1.072.60 4 1.062. 68 4 1.083 .23 4

O ther external revenue 2.60 2.68 3.23 Updated figures

Forecast figures Updated figures Totals may deviate from rounded cumulative figures. Forecast figures

Totals may deviate from rounded cumulative figures.

In 2015 external revenue from mobile services is Mobile network operators generated external revenue In 2015 external revenue from mobile services is Mobile network operators generated external revenue expected to amount to€26.98bn, which represents an of around €22.22bn in 2015, while service providers expectedIn 2015 e xtote ramountnal reve ntoue €26.98bn, from mobi whichle servi crepresentses is an Mobiofle aroundnetwork €22.22bn operators inge n2015,erated while exter servicenal reve nprovidersue increase of more than 3%. This is primarily due to the generated around €4.76bn. Service providers increaseexpected ofto moreamou nthant to€ 263%..98 Thisbn, w ish primarilyich represe duents a ton the of argeneratedound €22.22 aroundbn in 2 0€4.76bn.15, while Service service pprovidersroviders increased positive development of revenue from terminal increased their share from 16% in the previous year to positiveincrease developmentof more than 3 of%. revenueThis is pr fromimari lterminaly due to th e genetheirrated sharearoun dfrom €4.76 16%bn. Siner thevice previous providers year to almost equipment. almost 18% in 2015. equipment.positive development of revenue from terminal incre18%ased in th e2015.ir share from 16% in the previous year to equipment. almost 18% in 2015. External revenue in the telecommunications market €bn External revenue in the telecommunications market €bn 67.3 66.3 63.9 62.3 60.4 59.2 67.3 66.3 57.8 58.0 57.0 56.8 57.2 63.9 62.3 60.4 59.2 57.8 58.0 57.0 56.8 57.2

34.2 33.8 33.2 33.4 32.4 31.9 31.4 32.2 31.6 31.8 32.1

34.2 33.8 33.2 33.4 32.4 31.9 31.4 32.2 31.6 31.8 32.1 33.1 32.5 30.7 28.9 28.0 27.3 33.1 26.4 25.8 25.4 25.0 25.1 32.5 30.7 28.9 28.0 27.3 26.4 25.8 25.4 25.0 25.1

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015¹ 1) Fore cast figures To tal DTAG Compet itors 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015¹ ⁾ 1) Forecast figures Total DTAG Competitors ⁾

48 | BUNDESNETZAGENTUR | ANNUAL REPORT 4848 | | BUNDESNETZAGENTURBUNDESNETZAGENTUR | ANNUAL REPORT REPORT 2015

External revenue of mobile network operators and service providers External€bn revenue of mobile network operators and service providers €bn27.25 26.98 26.87 26.53 26.22 26.12 27.25 25.82 25.53 25.38 25.83 25.85 26.98 26.87 26.53 26.22 26.12 25.82 25.53 25.38 25.83 25.85

22.42 22.14 22.53 22.22 21.43 21.90 21.89 21.94 22.42 22.14 21.04 22.53 22.22 20.70 20.67 21.43 21.90 21.89 21.94 21.04 20.70 20.67

4.83 4.73 4.78 4.83 4.71 4.76 4.40 3.95 4.00 4.33 4.18 4.83 4.73 4.78 4.83 4.71 4.40 4.33 4.76 3.95 4.00 4.18

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015¹ 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015¹ 1) Forecast figures Mobile network operators Mobile service providers Total ⁾ 1) Forecast figures Mobile network operators Mobile service providers Total ⁾

InvestmentsInvestments in fixed assets Investments in fixed assets InvestmentsInvestments inin fixedfixed assetsassets in in the the telecommunications telecommunications ForFor the the first first time time since since 2010, 2010, investments investments in thein th cablee Investments in fixed assets in the telecommunications For the first time since 2010, investments in the marketmarket amountedamounted toto €8.1bn€8.1bn in in 2015, 2015, the the highest highest level level TVcable infrastructure TV infrastructure fell. Amounting fell. Amounting to €1.05bn to €1.05bn in 2015, in market amounted to €8.1bn in 2015, the highest level cable TV infrastructure fell. Amounting to €1.05bn in sincesince 2005.2005. This This corresponds corresponds to to an an increase increase of of €0.5bn €0.5bn they2015, were they down were slightly down onslightly the level on the of the level previous of the since 2005. This corresponds to an increase of €0.5bn 2015, they were down slightly on the level of the comparedcompared withwith 2014.2014. This This increase increase was was driven driven by by yearprevious (€1.10bn). year In (€1.10bn). 2015 they Inaccounted 2015 they for accounted 13% of all for comparedhigherhigher investmentsinvestments with 2014. byby This DTAG,DTAG, increase whichwhich was invested driven €3.9bn€3.9bn by in in investmentsprevious13% of all year investmentsin the(€1.10bn). telecommunications in In the 2015 telecommunications they market.accounted for higher20152015 compared compared investments with with by €3.4bn €3.4bn DTAG, in inwhich 2014. 2014. investedInvestments Investments €3.9bn made in 13%market. of all investments in the telecommunications 2015bymade alternative compared by alternative providers with providers€3.4bn remained in remained2014. constant Investments constant at €4.2bn at Companiesmarket. invested mainly in the rollout of optical madein€4.2bn 2015. by in alternative 2015. providers remained constant at fibre networks, the changeover to IP-based networks €4.2bn in 2015. and the rollout of LTE networks.

Investments in fixed assets in the telecommunications market Investments€bn in fixed assets in the telecommunications market €bn

8.1

7.6 8.1 7.1 7.2 7.6 7.2 6.5 7.1 6.4 6.6 6.3 6.5 6.1 5.9 6.4 6.6 5.8 6.1 6.3 5.8 5.9

4.2 4.2 3.9 3.8 3.8 3.6 3.7 4.2 4.2 3.4 3.9 3.3 3.8 3.8 3.2 3.1 3.6 3.7 3.4 3.3 3.2 3.1 3.9 3.3 3.3 3.4 3.9 3.3 3.3 2.9 2.8 3.0 2.8 2.9 3.4 2.7 3.0 2.4 2.7 2.9 2.8 2.8 2.9 2.4

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015¹ 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015¹ 1) Forecast figures Total DTAG Competitors (including cable TV providers) ⁾ 1) Forecast figures Total DTAG Competitors (including cable TV providers) ⁾ MARKET WATCH | TELECOMMUNICATIONS | 49 MARKET WATCH | TELECOMMUNICATIONS | 49

Employees in the telecommunications market Thousand

224.1

214.7 204.6

188.1 184.2 176.9 175.2 173.0 170.7 169.2 165.1

168.0 160.0 148.9 131.7 127.5 123.2 121.6 118.8 116.6 114.7 110.4

56.1 54.7 55.7 56.4 56.7 53.7 53.6 54.2 54.1 54.5 54.7

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015¹

1) Forecast figures DTAG Competitors Total ⁾

InCompanies the period invested from 1998 mainly to 2015in the a rollouttotal of of €128.3bn optical was telecommunicationsFixed network services of a better quality by investedfibre networks, in fixed the assets changeover in the telecommunications to IP-based networks fewerBroadband employees. connections This increase and bundledin productivity products is market.and the Ofrollout this ofamount, LTE networks. €67.5bn (around 53%) was particularlyThe total numbermarked in of the fixed-network telecommunications broadband sector invested by alternative providers and €60.8bn by andconnections strengthens rose the competitivenessagain in 2015 by of approximately the German 1.1m DTAG.In the period from 1998 to 2015 a total of €128.3bn was economy.year on year to around 30.7m. invested in fixed assets in the telecommunications Employeesmarket. Of this amount, €67.5bn (around 53%) was invested by alternative providers and €60.8bn by DTAG. Some 165,100 employees were employed by companies The majority (77%) of broadband connections continu- in the telecommunications market at the end of 2015, ed to be based on copper pairs (DSL). Together, all other Employees which is 4,100 or 2.4% less than at the end of 2014 technologies accounted for approximately 7.2m Some 165,100 employees were employed by (169,200). The number of employees employed by connections. Most of these were based on HFC companies in the telecommunications market at the alternative providers increased by 0.4% to 54,700 networks (6.6m), while around 0.4m were based on end of 2015, which is 4,100 or 2.4% less than at the comparedend of 2014 with (169,200). the previous The number year. Staff of employees numbers at fibre-to-the-building (FTTB) or fibre-to-the-home DTAGemployed fell byby 3.7%alternative year on providers year to 110,400increased at by the 0.4% end of 2015.to 54,700 compared with the previous year. Staff numbers at DTAG fell by 3.7% year on year to 110,400 Theseat the developmentsend of 2015. have been influenced by two factors. First, companies are being forced to realise efficiencyThese developments potential due have to been increasing influenced competition. by two Second,factors. recentFirst, companies years have are been being characterised forced to realise by technologicalefficiency potential advances, due to the increasing innovative competition. potential of whichSecond, is recentbest realised years have in a beencompetitive characterised investment. by The investmentstechnological made advances, have theenabled innovative the provision potential ofof more telecommunicationswhich is best realised servicesin a competitive of a better investment. quality by The fewerinvestments employees. made This have increase enabled inthe productivity provision of moreis particularly marked in the telecommunications sector and strengthens the competitiveness of the German economy.

50 | BUNDESNETZAGENTUR | ANNUAL REPORT

5050 | BBUNDESNETZAGENTURUNDESNETZAGENTUR | | ANNUAL ANNUA REPORTL REPOR 2015T Broadband connec ons in fixed networks m

Broadband connec ons in fixed networks m

1.2

0.6 1.2

0.3

0.6

0.3

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

BWA, fixed connec ons, FTTB/FTTH, HFC, power line communica on, satellite DSL

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Fixed network BWA, fixed connec ons, FTTBT/hFeTT mH,a HjoFrCi,t pyo (w7e7r% lin) eo cf obrmmoaudnbicaando nc,osnnateellciteio nDsS L Broadband connec ons and bundled products continued to be based on copper pairs (DSL). Together, TheThe remaining total nu 0.2mmbe ror soof connectionsixed-netw owererk bbroadbandroadband Theal lrelative other t egrowthchnolo gwasies highestaccount –e dalbeit for a pstartingproxim fromately wirelessconnect accessions r (BWA),ose ag afixedin in connections 2015 by aandppr poweroxima tely a relatively7.2m conn lowec tlevelions .– M foros tconnections of these we rwithe ba stransmis-ed on HFC lineFix ored satellite netw oconnections.rk sionTh ratese ma ofjor atity least (77 %100) o Mbit/s,f broad whichband c sawonn egrowthctions of 1.1m year on year to around 30.7m. networks (6.6m), while around 0.4m were based on aroundconti n44%ued compared to be base withd on 2014.coppe Byr p contrast,airs (DSL there). Tog ether, Broadband connec ons and bundled products ibre-to-the-building (FTTB) or ibre-to-the-home DemandThe to tforal high-speednumber o broadbandf ixed-ne connectionstwork broa dband wasal la omarkedther tec declinehnologi ines theacc onumberunted f oofr abroadbandpproxima tely (FTTH). increasedconnectio inns 2015. rose again in 2015 by approximately connections7.2m conn withectio ndatas. M ratesost o fof th lessese than were 10 b aMbit/s.sed on HFC

1.1m year on year to around 30.7m. networks (6.6m), while around 0.4m were based on ibre-to-the-building (FTTB) or ibre-to-the-home Distribu on of fixed-network broadband connec ons by s(pFeTeTdH ). m

13.2

Distribu on of fixed-network broadband connec ons by speed m

13.2

Over 144 kbit/s and 2 Mbit/s exactly Over 2 Mbit/s 10 Mbit/s up to 30 Mbit/s up to 100 Mbit/s and over

under 2 Mbit/s and under 30 Mbit/s 100 Mbit/s 10 Mbit/s

2014 2015 Over 144 kbit/s and 2 Mbit/s exactly Over 2 Mbit/s 10 Mbit/s up to 30 Mbit/s up to 100 Mbit/s and over under 2 Mbit/s and under 30 Mbit/s 100 Mbit/s 10 Mbit/s

2014 2015 MARKET WATCH | TELECOMMUNICATIONS | 51 MARKET WATCH | TELECOMMUNICATIONS | 51

Share of broadband connections in fixed networks %

59.4 .8

40.6 .2

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

DTAG (direct end customers) Competitors

The remaining 0.2m or so connections were broadband a maximum of three3) additional telecommunications Duewireless mainly access to the(BWA market), fixed shares connections gained and by power HFC servicesDSL (fixedconnections-network telephony, TV and mobile networkline or satellite operators, connections. DTAG’s competitors were able to services)The overalland are numberusually marketed of DSL connections to end customers has essentiallyin expand their share of the broadband market slightly. the formstagnated of a single since contract. 2011. While In fixed DTAG networks, once such again impro- Demand for high-speed broadband connections offersved are its now position considered slightly, the norm.with aroundFor new 12.6m DSL Withincreased regard in 2015.to retail business, DTAG’s competitors had customers,connections, it is there itsfore competitors becoming increasinglyrecorded slight year-on- achieved a market share of just under 59% of all difficultyear to losses. purchase Alternative the above providers-mentioned provided services approxi- broadbandThe relative connections growth was highest by the –end albeit of 2015.starting from separately.mately 10.9m connections (compared with around 11m a relatively low level – for connections with in 2014) which were marketed either directly or Thetransmission importance rates of of bundled at least 100 products Mbit/s, continued which saw to At theindirectly end of the to first their quarter own ofcustomers, 2015 DTAG giving and its them a growth of around 44% compared with 2014. By competitors provided approximately 29.5m bundled grow in 2015. In addition to broadband internet access, market share of around 46% at the end of 2015. contrast, there was a marked decline in the number products based on fixed-network services. The most such bundled products currently comprise a maximum of broadband connections with data rates of less than common type of bundled products are offers of three3) additional telecommunications services 10 Mbit/s. comprising two or three services, which account for (fixed-network telephony, TV and mobile services) and around 22.0m and around 7.1m connections, areDue usually mainly marketedto the market to endshares customers gained by in the form of a respectively. singleHFC network contract. operators, In fixed DTAG’s networks, competitors such offers were are able now consideredto expand their the sharenorm. of For the new broadband customers, market it isslightly. therefore DSL connections becoming increasingly difficult to purchase the The overall number of DSL connections has essentially above-mentionedWith regard to retail services business, separately. DTAG’s competitors had stagnated since 2011. While DTAG once again achieved a market share of just under 59% of all improved its position slightly, with around 12.6m Atbroadband the end ofconnections the first quarter by the end of 2015of 2015. DTAG and its DSL connections, its competitors recorded slight year- competitors provided approximately 29.5m bundled on-year losses. Alternative providers provided The importance of bundled products continued to grow approximately 10.9m connections (compared with products based on fixed-network services. The most in 2015. In addition to broadband internet access, such around 11m in 2014) which were marketed either common type of bundled products are offers compri- bundled products currently comprise directly or indirectly to their own customers, giving sing two or three services, which account for around them a market share of around 46% at the end of 2015. 22.0m and around 7.1m connections, respectively. 3 Contrary to earlier publications, a distinction is no longer made between mobile voice and mobile data services.

3 Contrary to earlier publications, a distinction is no longer made between mobile voice and mobile data services.

52 | BUNDESNETZAGENTUR | ANNUAL REPORT

5252 || BUNDESNETZAGENTURBUNDESNETZAGENTUR | | ANNUALANNUAL REPORT REPORT 2015

DSL connections m DSL connections

m

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Competitors2005 via2006 DTAG local 2007loops, wholesale2008 services2009 provided by2010 alternative 2011 carriers, self2012-provision 2013 2014 2015 Competitors via DTAG bitstream CompetitorsCompetitors via via DTAG DTAG resale local loops, wholesale services provided by alternative carriers, self-provision DTAGCompetitors (direct end via DTAGcustomers) bitstream TotalCompetitors via DTAG resale DTAG (direct end customers) Total

The number of VDSL connections continued to rise in It is currently expected that vectoring technology will The2015, number with both of VDSL DTAG connections and its competitors continued recording to rise in leadIt is to currently a further expected rise in the that importance vectoring andtechnology spread of will 2015,significantThe number with both increases of VDSLDTAG in connectionsand the its number competitors continued of VDSL recording connec to rise- in VDSL.leadIt is to currentlyIn a theory, further expected this rise technology in the that importance vectoring currently technologyand enables spread willof significanttions.2015, Of with a increasestotal both of DTAG approximately in theand number its competitors 4.8m of VDSL VDSL recording connec- transmissionVDSL.lead to In a theory, further rates this ofrise up technology in to the 100 importance Mbit/s currently based and enables on spread VDSL of connections.tions,significant some increases2.9m Of a totalwere in ofprovided the approximately number by DTAG of VDSL 4.8m and VDSLaround connections.transmissionVDSL. In theory, According rates this of uptechnology to to preliminary 100 Mbit/s currently estimates based enables on by connections,1.9mconnections. by competitors. some Of a total2.9m VDSL of were approximately therefore provided accounted by 4.8m DTAG VDSL for and a theVDSLtransmission Bundesnetzagentur, connections. rates According of uparound to 100 to 4% preliminary Mbit/s of existing based estVDSL onimates aroundshareconnections, of 1.9m around by some competitors.20% 2.9m of all were DSL VDSL providedconnections. theref byore DTAG and connectionsbyVDSL the Bundesnetzagentur,connections. were capable According of sucharound to data preliminary 4% rates of existing at the est endimates accounted around 1.9m for aby share competitors. of around VDSL 20% theref of all ore ofVDSL by2015. the connections Bundesnetzagentur, were capable around of such 4% dataof existing rates at the DSLaccounted connections. for a share of around 20% of all endVDSL of 2015.connections were capable of such data rates at the DSL connections. end of 2015.

Broadband connections via HFC networks m Broadband connections via HFC networks m 6.6

6.6

2009 2010 2011 2012 2013 2014 2015 2009 2010 2011 2012 2013 2014 2015

MARKETMARKET WATCH WATCH | TELECOMMUNICATIONS | TELECOMMUNICATIONS | 53 | 53

Broadband data volumes in fixed networks

11.5

2010 2011 2012 2013 2014 2015¹ 1) Forecast figures Total broadband volume in billion GB Average data volume per user and month in GB ⁾

At the wholesale level, the increasing significance of Satellite broadband connections AtVDSL the ledwholesale to a considerable level, the increasing rise in demand significance for DTAG’s of SatelliteSatellite broadband systems make connection it possibles to access the internet VDSL led wholesale to a considerable products. riseHere, in demand demand forfor bothDTAG’s Satellitefrom virtually systems any make location. it possible Just tounder access 28,000 the internet cus- VDSLbitstream wholesale and resale products. wholesale Here, productsdemand for increased both by fromtomers virtually were using any location. this technology Just under at the end of 2015. bitstream0.7m. and resale wholesale products increased by 28,000User numbers customers remain were low using due this to technologythe price advantage at the 0.7m. endand of higher 2015. speeds User numbers of cable-based remain alternatives. low due to the How- price Broadband connections via HFC networks advantageever, satellite and internet higher speeds connections of cable can-based make a BroadbandThe combination connectio of nsoptical via HFC fibre networks and coaxial cables, in alternacontributiontives. However, to ensuring satellite full broadband internet connections coverage in Theconjunction combination with of the optical DOCSIS fibre 3.0 and transmission coaxial cables, in canregions make where a contribution other technologies to ensuring are full not, broadband or not conjunctionstandard, enables with the broadband DOCSIS 3.0 services transmission with download standard, coveragesufficiently, in regions available. where other technologies are not, enablesspeeds of broadband up to 400 servicesMbit/s. At with the download end of 2015 speeds there of or not sufficiently, available. upwere to 6.6m400 Mbit/s. connections At the viaend HFC of 2015 networks, there were including 6.6m Broadband traffic volumes connections1.9 with delivering via HFC speeds networks, of over including 100 Mbit/s. 1.9 with In recent BroadbandAccording trafficto initial volumes estimates by the Bundesnetzagen- deliveringyears HFC speedsbroadband of over customer 100 Mbit/s. numbers In recent have years grown Accordingtur, the data to initialvolume estimates per fixed-network by the broadband HFCat a consistentbroadband rate customer of between numbers 700,000 have and grown 800,000 at a per Bundesnconnectionetzagentur, rose significantly the data volume once again per fixed in 2015-network to consistentyear. rate of between 700,000 and 800,000 per broadbandaround 11.5bn connection GB at the rose end significantly of the year. once The againaverage in year. 2015data volumeto around per 11.5bn broadband GB at connectionthe end of the was year. therefore The Broadband connections via FTTB/FTTH averageapproximately data volume 31 GB. per broadband connection was BroadbandThanks to theirconnections outstanding via FTTB/FTTH transmission properties, therefore approximately 31 GB. Thanksoptical fibresto their are outstanding considered transmission to be the ideal properties, transmis- The figures shown do not include traffic volumes from opticalsion medium fibres are for consideredtelecommunications. to be the ideal Limited by TheDTAG’s figures internet-based shown do not TV include service. traffic volumes from transmissiongeographical mediumavailability, for telecommunications. demand for both FTTB Limited and DTAG’s internet-based TV service. byFTTH geographical is still relatively availability, low, withdemand around for both 277,000 FTTB and Telephone connections FTTHcustomers is still accessing relatively the low, internet with around via FTTB and just TelephoneThe last few connections years have seen contrasting trends in voice 277,000under 137,000 customers doing accessing so via FTTH the internet at the end via of FTTB 2015. and Thecommunication last few years using have conventionalseen contrasting telephone trends in lines voice justWith under around 137,000 two million doing so connections via FTTH at available the end of to communication(analogue/ISDN) using on the conventional one hand andtelephone DSL and lines HFC 2015.customers, With aroundthe potential two million offered connections by this infrastructure available to (analogue/ISDN)networks on the onother. the one hand and DSL and HFC customers,is much greater. the potential offered by this infrastructure is networks on the other. much greater.

54 | BUNDESNETZAGENTUR | ANNUAL REPORT 5454 || BBUNDESNETZAGENTURUNDESNETZAGENTUR || ANNUALANNUAL REPORTREPORT 2015

TTootatal ln numumbbeerr o off tteelleepphhone connecctitioonnss mm

3737.9.9 3737.0 .0 37..55 3737.1.1 36.936.9

2828.4.4

26..44

2323.4. 4

19.9 19.9

15.5 15.5

11.2 11.2 8.4 14.7 6.6 8.4 6.314 .7 5.8 6.3 5.8 6.6 5.6 5.0 5.6 3.5 4.3 5.0 3.05.2 04..23 0.3 0.3 0.4 0.2 0.2 0.3 0.3 0.4

2011 2012 2013 2014 2015¹ 2011 2012 2013 2014 2015¹ 1) Forecast figures Total Analogue/ISDN (including public tele⁾phones) 1) Forecast figures Total Analogue/ISDN (including public telephones) VoIP via DSL VoIP via HFC ⁾

VooIIP via DFTSTLB/FTTH VoIP via HFC VoIP via FTTB/FTTH

WhileWhile demand demand forfor DSLDSL aandnd HHFCFC t telephoneelephone s serviceservices h hasas ByBy thethe endend ofof 22015015 thethe numbernumber ofof voivoicece llinesines iinn oopticalptical Wincreased,inhcilree adseemd ,therea thnde rfeo has rh aDs Sbeen bLe aen da a decline HdeFcCl itneel e inipn h thethoen euseu se rofovif ces has fibreiBbrye t networksnhet ewnodr kosf hadh2a0d1 alsoa5l stho erisenr insuenm ttoboe aapproximatelyrp opfr voioxicmea ltienleys 0 0.41m.i.n4 1om.pt i cal iconventionalnccornevaesnetdio, thnael telephonerte lhepash obneee lines.nli nae des. OpticalOclpintiec ainl fibreitbhree u t telephonyseele opfh ony AtAt i thebthre samesnaemtwe otime,tirmkes ,h tthehade nanumberulsmo breisre o noff ta oanaloguen alpopgruoex lii mlines,neast,e thl ythee 0 . 41m. � c(FTTB/FTTH)o(FnTTvenBt/ioFTTnaHl t) econtinues cleopnhtionnue sl toitnoe playps.l aOy p onlyotniclay la imarginalmbraer gtienleapl rhrole.oolne.y mostmAots t hcommonceo mmsamoen t ciconnectionmonne, ethcteio nnu tm ytypepbe rin ino 2f 2014,01an4al, of efellglul et oto l ian aroundreosu, nthde � � (ThereFTTTherBe /was wFTTas a Ha slight )s lcigohn ttoverall iovnueersa ltl decreaseo d peclaryea osne inl iyn ademand de mmaragnidn forafol rr voiceovoile.c e 9.5m9.m5mo s andat ncdo mmthethe numberonnum cobnner eoofcf tIISDNioSDnN t yb basicpaes iicn r rate2at01e l4linesin, efesl lf fell etlol ta toor o und � Tcommunicationchoemmure wansic aa tsiolignh connectionscto ovnneercatioll ndse c iinnre afixedixseed i n networks. edetwmoarknsd. for voice aroundar9o.5umnd a 5.9m.5n.9dm th. eTheT hneu tmtotalobtaelr nnumber oumf ISbDerN o ofbf aI ISDNSsDicN r ap tprimaryreim linareys rf aeratetlle to communication connections in ixed networks. linareos4u)n sdta 5g.n9amte. dT ahte a tpoptarol xniummabteelry o8f7 I,0S0D0N. primary rate � lines4) stagnated at approximately 87,000. conventional InIn fixed ixed networks,networks, thethe numbernumber ooff DDSLSL llinesines u usedsed f foror fixed-lineColinveesn4)t iost connectionsnaganl aixteed -alitn ae p arecpornn ograduallyxeimctioatnesly a being8re7 ,g0r0a 0dreplaced.u ally by � InV oiIxPe dro nset bwyo 31rk%s, tyheea rn oumn ybeaerr o tfo D aSnL e slitnimesa utesde d1 4fo.7rm in beCionngv reenptlioacneadl biyx IePd--blianse dc otennchencotiolognise sa,r we hgircahd nuoawlly VoIP� rose by 31% year on year to an estimated 14.7m in IP-based technologies,� which now account for around V2015.2o0IP1 5r This.o Tshe ib swas yw 31a smainly %m ayienalyr due doune yto teao changes crh taon agne se atsat i DTAG.DmTaAteGd. TThe1h4e.7 m in 58%accbeo iofunng connections.t r feoprl arcoeudn bdy 5 IThe8P%-b aototalsf ecdo n tnumberencehctnioonlos gof. iTe publichse, wtohtia clh now � � 2numbern0um15.b Tehr of iosf wHFC HaFsC m connectionscoaninnleyc dtiouen st o uused scehda n fforogre tstelephonye aletp DhToAnyG . The payphonesnumaccboeurn ot ff op(coin-ru balriocu pandnady p 5card-operated)h8o%ne osf ( ccooinnn-e acnt stoodiod cnasr. dT at-h earound total nincreasediumncrbeears eodf by HbyF approximately Capp cornonxeimctaiotenlsy 12%u12se%d to tfo 6.3m. r6 t.3emlep. hony 29,000opneumratb eatedr )the osft oo pendudb al ioftc a p2015.raoyupnhdo 2n9e,0s 0(0coi atn t-h aen edn cda orfd 2-015. increased by approximately 12% to 6.3m. . operated) stood at around 29,000 at the end of 2015.

2013 2014 2015¹

Total Total Total ⁾ Competitors’ share Competitors’ share Competitors’ share stock 2013 stock 2014 stock 201 5¹

m Total m % mTotal m % m Total m ⁾ % shar e Competitors’ share Competitors’ share Competitors’ stock stock stock Analogue lines 14.29 1.26 8.8 12.04 1.01 8.4 9.53 0.74 7.8 m m % m m % m m %

ISDN basic rate lines 9.06 2.88 31.8 7.72 2.50 32.4 5.89 1.89 32.1 Analogue lines 14.29 1.26 8.8 12.04 1.01 8.4 9.53 0.74 7.8 ISDN primary rate lines 0.087 0.03 34.5 0.087 0.03 34.5 0.087 0.03 34.5 ISDN basic rate lines 9.06 2.88 31.8 7.72 2.50 32.4 5.89 1.89 32.1 Public telephones 0.040 0.001 2.5 0.031 0.001 3.2 0. 029 0.001 3.4 ISDN primary rate lines 0.087 0.03 34.5 0.087 0.03 34.5 0.087 0.03 34.5

VoIP via HFC 4.95 4.95 100.0 5.62 5.62 100.0 6.27 6.27 100.0 Public telephones 0.040 0.001 2.5 0.031 0.001 3.2 0. 029 0.001 3.4 VoIP via FTTB/FTTH 0.252 0.240 95.2 0.321 0 .300 93.5 0.413 0.376 91.0 VoIP via HFC 4.95 4.95 100.0 5.62 5.62 100.0 6.27 6.27 100.0 VoIP via DSL 8.43 6.30 74.7 11.21 6.85 61.1 14.72 7.46 50.7 VoIP via FTTB/FTTH 0.252 0.240 95.2 0.321 0.300 93.5 0.413 0.376 91.0 Total connections 37.11 15.66 42.2 37.03 16.31 44.0 36.94 16.77 45.4

Vo IP via DSL 8.43 6.30 74.7 11.21 6.85 61.1 14.72 7.46 50.7 1) Forecast figures Total connections 37.11 15.66 42.2 37.034 Figures 1fo6r.3 IS1D N primary rate4 l4in.e0s are based 3o6n. 9es4ti mates. 16.77 45.4

1) Forecast figures 4 Figures for ISDN primary rate lines are based on estimates.

MARKETMARKET WATCH WATCH | | TELECOMMUNICATIONSTELECOMMUNICATIONS | 55| 55

Telephone connections from alternative subscriber network operators m

16.3 16.8 15.7 15.1 14.4

7.5 6.3 6.9 6.3 5.7 5.6 5.3 5.0 4.3 3.7 3.3 2.9 2.5 3.5 1.9 1.6 1.7 1.3 1.0 0.7 0.2 0.2 0.2 0.3 0.4

2011 2012 2013 2014 2015¹ 1) Forecast figures Total VoIP via DSL ⁾ VoIP via HFC ISDN basic and primary rate lines Analogue lines (including public telephones) VoIP via FTTB/FTTH

DTAG's competitors had an estimated 16.8m telephone Call minutes in fixed networks DTAG'slines at thecompetitors end of 2015. had Although an estimated this represents an Theor volume using the of callalternative minutes providers’5) within conventional own local loops. 16.8mincrease, telephone it is around lines 0.5m at the below end the of 2015.increase Although in the telephone networks and IP-based networks continued thisprevious represents year. While an increase, the number it is around of analogue 0.5m and below ISDN to Calldecrease. minutes According in fixed networksto the Bundesnetzagentur’s thebasic increase rate lines in providedthe previous by alternative year. While subscriber the number of estimates,The volume the totalof call volume minutes of 5)call within minutes conventional in fixed analoguenetwork operators and ISDN decreased basic rate further, lines provided their share by of networkstelephone amounted networks to andaround IP-based 141bn networks minutes. continued alternativeDSL lines for su VoIPbscriber and voicenetwork lines operators in HFC and decreased optical to decrease. According to the Bundesnetzagentur’s further,fibre networks their share continued of DSL to lines rise. for VoIP and voice Thisestimates, decrease the is likely total volumeto be due, of among call minutes other things,in fixed to lines in HFC and optical fibre networks continued to thene increasingtworks amounted shift in traffic to around volumes 141bn to mobileminutes. rise.Relative to the number of fixed-network telephone networks. Use of internet mobile communication connections provided by DTAG’s competitors, DSL services (over-the-top services) has also increased in lines for VoIP accounted for a share of around 45% in recent years. Relative to the number of fixed-network telephone This decrease is likely to be due, among other things, to 2015, which is significantly more than that of conven- connections provided by DTAG’s competitors, DSL lines the increasing shift in traffic volumes to mobile tional analogue and ISDN lines (approximately 15%). At Calls within German fixed networks amounted to an for VoIP accounted for a share of around 45% in 2015, networks. Use of internet mobile communication the same time, the share of DSL lines for VoIP was estimated 120bn minutes in 2015, while calls to which is significantly more than that of conventional services (over-the-top services) has also increased in significantly higher than that of voice lines in HFC national mobile networks accounted for around 9.8bn analogue and ISDN lines (approximately 15%). At the recent years. networks (around 38%). Voice lines in FTTB/FTTH minutes and calls to foreign fixed and mobile networks same time, the share of DSL lines for VoIP was networks accounted for a share of roughly 2%. Overall, for 10.7bn minutes. significantlyaround 85% of higher all competitors’ than that of lines voice were lines based in HF onC IP Calls within German fixed networks amounted to an networkstechnologies. (around Within 38%). just aVoice few years lines thein FTTB/FTTH importance of Accordingestimated to 120bninitial estimatesminutes in by 2015, the Bundesnetzagen while calls to - networksconventional accounted telephony for viaa share analogue of roughly and ISDN 2%. linesOverall, tur,national around mobile 70bn call networks minutes accounted had been handledfor around by 9.8bn aroundhas dwindled 85% of for all alternative competitors’ subscriber lines were network based on DTAG’sminutes competitors and calls byto foreignthe end fixedof 2015. and The mobile majority networks of IPoperators. technologies. Within just a few years the importance thesefor 10.7bncalls (52bn minutes. minutes) were made via IP-based of conventional telephony via analogue and ISDN lines networks. The volume of calls made via conventional hasThe dwindledtelephone for services alternative of alternative subscriber subscriber network analogueAccording or ISDN to initial lines estimates by the operators.network operators are primarily operated on the basis Bundesnetzagentur, around 70bn call minutes had of contracts on access to the DTAG local loop, or using been handled by DTAG’s competitors by the end of Thethe alternative telephone servicesproviders’ of own alternative local loops. subscriber 2015. The majority of these calls (52bn minutes) were 5 Calls within Germany, international calls, and calls to German mobile networks network operators are primarily operated on the basis made via IP-based networks. The volume of calls made of contracts on access to the DTAG local loop, via conventional analogue or ISDN lines

5 Calls within Germany, international calls, and calls to German mobile networks

5656 || BUNDESNETZAGENTURBUNDESNETZAGENTUR | | ANNUALANNUAL REPORT REPORT 2015

Outgoing call minutes in fixed networks bn

193 183 174 163 151 141

101 96 90 92 84 85 87 78 77 74 71 70

2010 2011 2012 2013 2014 2015¹ 1) Forecast figures DTAG Competitors Total⁾

Due, among other things, to DTAG’s ongoing switch to Based on initial forecasts, indirect call-by-call and IP-based(14bn) continued network technology, to fall. this trend was also preselectionBased on initial calls handled forecasts, by indirect alternative call -providersby-call and increasingly evident at DTAG. At the end of 2015 an accountedpreselection for a calls total handled of 4bn minutes, by alternative or around providers 6%, of estimatedDue, among 25% other of the things, 71bn to call DTAG’s minutes ongoing handled switch by to allaccounted calls handled for aby total competitors of 4bn minutes, at the end or aroundof 2015 6%, DTAGIP-based were network handled technology, via IP technology. this trend was also comparedof all calls with handled approximately by competitors 7% in theat the previous end of year.2015 increasingly evident at DTAG. At the end of 2015 an compared with approximately 7% in the previous Theestimated Bundesnetzagentur 25% of the 71bn estimates call minutes that just handled under by50% Despiteyear. a decrease in the number of lines with pre- ofDTAG all calls were – iehandled every second via IP technology. call minute within fixed selection in the DTAG network, preselection call networks – was being handled via IP technology by the volumesDespite continued a decrease to in exceed the number call-by-call. of lines There with were endThe of Bundesnetzagentur 2015. estimates that just under 50% 0.9mpreselection lines with in preselection the DTAG network, at the end preselection 2014. An call of all calls – ie every second call minute within fixed estimatedvolumes 0.7m continued DTAG tocustomers exceed call had-by an-call. alternative There were networks – was being handled via IP technology by the provider0.9m lines set as with their preselection default provider at the at end the 2014. end of An 2015. end of 2015. estimated 0.7m DTAG customers had an alternative Inprovider general it set should as their be noteddefault when provider interpreting at the end the of above-mentioned2015. call minutes that certain traffic volumes are not currently included in the

Bundesnetzagentur’s database. These primarily include In general it should be noted when interpreting the voice transmission by over-the-top providers which do above-mentioned call minutes that certain traffic not operate their own fixed-network lines or telecom- volumes are not currently included in the munications networks and which offer internet-based Bundesnetzagentur’s database. These primarily include services independent of network infrastructure (eg voice transmission by over-the-top providers which do DSL, HFC or optical fibre). not operate their own fixed-network lines or telecommunications networks and which offer internet- based services independent of network infrastructure (eg DSL, HFC or optical fibre). MARKET WATCH | TELECOMMUNICATIONS | 57 MARKET WATCH | TELECOMMUNICATIONS | 57

MARKET WATCH | TELECOMMUNICATIONS | 57

Call minutes via alternative providers bn Call minutes via alternative providers bn 92 87 92 84 15 87 78 11 84 74 15 9 78 7 70 745 11 9 704 7 5 40 36 32 24 20 144

40 36 32 24 20 14

49 52 43 47 37 40 49 52 43 47 37 40

2010 2011 2012 2013 2014 2015¹ 1) Forecast figures 2010 2011 Call-by-call/preselection2012 2013Analogue/ISDN 2014IP -based (VoIP) 2015¹ ⁾

1) Forecast figures Call-by-call/preselection Analogue/ISDN IP-based (VoIP) ⁾

Subscriber lines This decrease is due to a shift in demand for wholesale SubscriberThe number lines of local loops leased by DTAG’s servicesThis decrease to DTAG’s is due bitstream to a shift and in demand resale products for wholesale on Subscriber lines This decrease is due to a shift in demand for wholesale Thecompetitors number continuedof local loops to decrease leased by in DTAG’s 2015, falling competi by - theservices one hand to DTAG’s and the bitstream fact that andend resalecustomers products are on the The number of local loops leased by DTAG’s services to DTAG’s bitstream and resale products on torsapproximately continued 0.7mto decrease year on in year. 2015, In falling total, aroundby approxi 8.1m- increasinglyone hand and using the factthe servicesthat end of customers cable providers are increa on - competitors continued to decrease in 2015, falling by the one hand and the fact that end customers are matelylocal loops 0.7m were year being on year. leased In total, at the around end of 2015.8.1m local thesingly other. using Because the services cable providers of cable providers have their on own the approximately 0.7m year on year. In total, around 8.1m increasingly using the services of cable providers on infrastructures for subscriber lines, they do not localloops loops were werebeing being leased leased at the at end the of end 2015. of 2015. theother. other. Because Because cable cable providers providers have have their their own own infra - generally need to use DTAG’s subscriber loops. infrastructuresstructures for subscriberfor subscriber lines, lines, they they do notdo not generally generallyneed to use need DTAG’s to use subscriber DTAG’s subscriber loops. loops.

Volume of leased subscriber lines m Volume of leased subscriber lines m 9.5 9.7 9.5 9.1 9.3 8.4 8.8 9.5 9.7 9.5 9.1 9.3 8.1 8.4 8.8 8.1 6.4

6.4 4.7

3.3 4.7

3.3 2.0 1.7 1.4 1.3 2.0 0.7 1.7 0.4 1.3 1.4 0.2 0.7 0.4 0.2 -0.2 -0.2 -0.7 -05 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 -0.2 -0.2 -0.7 -05 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Change (in absolute terms) Total Change (in absolute terms) Total

5858 || BUNDESNETZAGENTURBUNDESNETZAGENTUR | | ANNUALANNUAL REPORT REPORT 2015

Traffic volumes and usage MobileMobile communications communications Traffic volumes and usage Mobile broadband Mobile broadband Mobile data volumes continued to rise sharply. In 2015 Subscribers Mobile data volumes continued to rise sharply. In 2015 Subscribers 591m GB of data were transmitted via mobile commu- At the end of 2015 there were 113.8m SIM cards 591m GB of data were transmitted via mobile At the end of 2015 there were 113.8m SIM cards nication networks (2014: 395m GB). activated by network operators.6A share of 6.6m communication networks (2014: 395m GB). activated by network operators6. A share of 6.6m SIM SIM cards were used for data communication cards were used for data communication between In order to use mobile data transmission services, the between devices (M2M) (end of 2014: 5.2m) In order to use mobile data transmission services, the devices (M2M) (end of 2014: 5.2m) number of SIM cards being employed in UMTS- and number of SIM cards being employed in UMTS- and LTE- LTE-enabled devices once again rose considerably to Statistically speaking, each inhabitant has around enabled devices once again rose considerably to 74.3m in Statistically speaking, each inhabitant has around 1.4 74.3m in 2015 compared with 52.6m in 2014. 1.4 SIM cards. However, the use of two or three devices 2015 compared with 52.6m in 2014. SIM cards. However, the use of two or three devices means that these devices are not in constant use. If means that these devices are not in constant use. If Text messaging only active SIM cards are taken into account, the actual only active SIM cards are taken into account, the actual AnotherText messaging decline in the use of the Short Message Service number is lower. SIM cards are defined as active if they Another decline in the use of the Short Message Service number is lower. SIM cards are defined as active if they (SMS) was observed in 2015. The number of text have been used for communication in the last three (SMS) was observed in 2015. The number of text have been used for communication in the last three messages sent fell to 16.6bn in 2015 compared with monthsmonths oror ifif anan invoiceinvoice hashas been been generated generated for for the the SIM 22.3bnmessages in 2014. sent Owing fell to to 16.6bn the growing in 2015 number compared of smart with cardSIM cardin this in period. this period. On this On basis,this basis, data collecteddata collected by the by phones,22.3bn text in 2014.messages Owing are toincreasingly the growing being number replaced of smart Bundesnetzagenturthe Bundesnetzagentur suggest suggest that therethat there were were 108.0m byphones, messaging text apps. messages are increasingly being replaced active108.0m SIM active cards SIM at thecards end at of the 2015 end (end of 2015 of 2014: (end of by messaging apps. 107.8m),2014: 107.8m), 22% of which 22% of were which attributable were attributable to service to Call minutes providersservice providers (2014: 21%) (2014: 21%) TheCall volume minutes of outgoing calls made by mobile subscri- bersThe in volume Germany of ouin tgoing2015 (115bn calls mademinutes) by mobile was higher AroundAround 630,000630,000 SIM SIM cards cards were were used used at at a fixeda fixed thansubscribers in recent inyears. Germany in 2015 (115bn minutes) was location.location. TheThe numbernumber ofof LTELTE SIM SIM cardscards in in active active use use higher than in recent years. hadhad increasedincreased to to more more than than 27m 27m by by the the end end of of 2015 2015 In previous years monthly revenue (excluding terminal (end(end of of 2014: 2014: 17m). 17m). equipmentIn previous and years VAT) monthly per registered revenue SIM (excluding card was aroundterminal €14. equipment The average and data VAT) volume per registered used per month SIM card AnAn increasingincreasing shareshare of of active active SIM SIM cardscards are are postpaid postpaid haswas increased around almost €14. The sixfold average since data 2011. volume used per cards.cards. At At the the end end of of 2015 2015 they the yaccounted accounted for for 60% 60% month has increased almost sixfold since 2011. comparedcompared with with 58% 58% at at the the end end of of 2014. 2014.

Subscribers and penetration in mobile communication networks

142% 143% 141% 139% 139% 132% 133% 131% 118%

104% 96%

114.1 115.2 113.8 107.2 108.3 108.8 113.2 112.6 97.2

79.3 85.7

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

* Number of SIM cards according to network Number of subscribers (m)* Penetration operators’ annual reports

6 There is no uniform definition of the number of SIM cards specified in the annual reports of network operators. Each company decides independently how to count SIM cards and when adjustments are required.

MARKETMARKET WATCH WATCH || TELECOMMUNICATIONS TELECOMMUNICATIONS | TELECOMMUNICATIONS || 5959 | 59

Mobile data volumes m GB

591

395

156

100

2008 2009 2010 2011 2012 2013 2014 2015

Number of regular UMTS and LTE users m

74.3

2008 2009 2010 2011 2012 2013 2014 2015

6060 || BUNDESNETZAGENTURBUNDESNETZAGENTUR | | ANNUAL ANNUAL REPORTREPORT 2015

60 | BUNDESNETZAGENTUR | ANNUAL REPORT

SMS sent bn

SMS sent 59.8 bn

59.8

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Infrastructure2005 and 2006network coverage2007 2008 2009 2010 2011 2012 2013 2014 2015 The LTE rollout continued at a brisk pace. At the end of Infrastructure and network coverage 2015 there were 38,800 LTE base stations TheInfrastructure LTE rollout and continued network coverageat a brisk pace. At the end of (2014: 28,700). DTAG had achieved LTE network The LTE rollout continued at a brisk pace. At the end of 2015coverage there in were relation 38,800 to the LTE population base stations of 90% (2014: by 28,700).the 2015 there were 38,800 LTE base stations DTAGend of had2015 achieved compared LTE with network 84% for coverage Vodafone in andrelation 75% (2014: 28,700). DTAG had achieved LTE network tofor the Telefónica population Germany. of 90% by the end of 2015 compared coverage in relation to the population of 90% by the with 84% for Vodafone and 75% for Telefónica end of 2015 compared with 84% for Vodafone and 75% Germany.Outgoing call minutes in mobile networks for Telefónica Germany. minutes (bn)

Outgoing call minutes in mobile networks

minutes (bn) 115 110 111 109 107 102 115 110 111 109 107 102

2010 2011 2012 2013 2014 2015

2010 2011 2012 2013 2014 2015

Key figures and competitors’ shares Key figures and competitors’ shares KeyTheThe following figuresfollowing tableand table providescompetitors’ provides an an overview overview shares of of selected selected key keyfigures figures and and competitors’ competitors’ shares shares in thein the telecommunica - Thetelecommunicationstions following market table for the provides market period anforfrom overview the 2013 period to of 2015. from selected 2013 to key2015.. figures and competitors’ shares in the telecommunications market for the period from 2013 to 2015. MARKET WATCH | TELECOMMUNICATIONS | 61 MARKET WATCH | TELECOMMUNICATIONS | 61

MARKET WATCH | TELECOMMUNICATIONS | 61

Revenue and services per SIM card per month 435

Revenue and services per SIM card per month 435 289

289 195

114 195 80 82 84 75 114 80 80 80 28 82 1284 754 1 44 80 16 80 28 12 €1341 .9 €1344. 8 €13.8 €1316. 5 €13 .7

€13.9 €13.8 €13.8 €13.5 €13.7 2011 2012 2013 2014 2015

2011 2012 2013 2014 2015 End customer revenue (excluding terminal devices) excluding VAT Telephony (minutes) SMS (number) Data (MB) End customer revenue (excluding terminal devices) excluding VAT Telephony (minutes) SMS (number) Data (MB)

Key figures

Key figures 1) Revenue (€bn) 57.2

11)) RInevveenuestmen (t€sbn (€bn) ) 578.21 1) 1) IEnmvepslotmyeeensts (€bn) 165,108.10 1) ETmotpallo fyixeeeds broadband connections (m) 165,3010.07 To-t aDlS fiLx ed broadband connections (m) 3023.75 - DHSFCL 236..56 - HFTTFCB /FTTH 60.64 0.4 - FTTOtheBr/ FTTH 0.2 2) 0.2 Br-o Oadthebarnd penetration rate (% of households) 77

2) 1) BTorotald fbixaednd tpeelephonenetratio nli neraste/a (cc% eosfs hou poisnetsho (mlds) ) 367.79

1)) ToAtanal flioguexed t/eISlephoneDN (inc lliunedinsg/a puccebslics tpoelephoneints (m)s ) 3615.95 1) 1) A- VnaolIogueP via/ IDSSDLN (including public telephones) 1514.57 1) 1) - VoIP via DHSFCL 146.73 1) 1) - VoIP via HFTTFCB /FTTH 60.34 1) DT- AVGo IlPea vsiaed FTT subBs/cFTTribeHr lines (m) 08..41

3) DMTobAGile leasubsedsc rsiberubssc r(iSbeIMr li cnaresd s(m in) m) 1138.81

3) 3)4) Mobobile psubenesctraribertions r(aSteIM (% car odf sin habin mit)an ts) 111338.89

3)4) Mobile penetration rate (% of inhabitants) 138.9

Competitors’ shares %

1) CReovmenupeeti tors’ shares % 56 1)) RInevveenustmen ts 562 1) IFnivxesdt mbroenatsdba nd connections 529 FDiSxeLd broadband connections 5496

1) DFiSxeLd telephone lines/access points 465 1) Fixed telephone lines/access points 45 1) Forecast figures 2) Number of households according to Eurostat 13) FAoccreocradsingt fi gtou rneest work operators’ annual reports 2) Number of households according to Eurostat 4) Number of inhabitants according to the Feder al Statistical Office (DESTATIS). 3) According to network operators’ annu al reports 4) Number of inhabitants according to the Federal Statistical Office (DESTATIS).

62 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015 62 | BUNDESNETZAGENTUR | ANNUAL REPORT

Consumer protection InIn 2015 2015 thethe Bundesnetzagentur’sBundesnetzagentur’s Consumer Consumer Advice Advice Consumer protection serviceservice received received aroundaround 74,000 74,000 enquiriesenquiries and and com- andand adviceadvice complaints.plaints. 61% 61% of all of enquiries all enquiries were were sent sent by e-mail by e-mail and and15% 15% by post by post or fax. or fax.Around Around one one quarter quarter were were resolved TheThe Bundesnetzagentur resolvedby telephone. by telephone.

receivedreceived aroundaround 178,000 TheThe mainmain subjects subjects of of enquiries enquiries and and complaints complaints were were consumer178,000 consumer enquiries enquiries and switchingswitching providers, providers, contracts, contracts, relocation relocation issues issues and and generalgeneral questionsquestions relating torelating the Bundesnetzagentur. to the complaintsand complaints in connection in Bundesnetzagentur.

withconnection telecommunications with in Main subjects of enquiries and complaints in connection with telecommunications 2015,telecommunications approximately 21,000in % 3 1 3 more2015, thanapproximately in 2014. Most 21,000 of 3 4 thesemore relatedthan in 2014.to problems Most of 6 ofthese switching related providers to problems and of 40 6 questionsswitching providersabout the andcontent

ofquestions contracts. about In 2015the content fines 9 totallingof contracts. €467,350 In 2015 were fines

imposedtotalling €467,350due to unsolicited were

25 marketingimposed due calls to andunsolicited cold Switching providers callersmarketing hiding calls their and identity.cold Contracts callers hiding their identity. Relocations General enquires and information relating to BNetzA Universal service Invoices IP migration Network access Number administration Other

When switching providers, statutory regulations General consumer enquiries and complaints guarantee consumers the right to uninterrupted service It is not always easy for consumers to keep abreast of When switching providers, statutory regulations and to retain their existing number. However, the Generalinnovative consumer products enquiries and services and complaints in the guarantee consumers the right to uninterrupted service process of switching providers does not always run Ittelecommunication is not always easys formarket. consumers The Bundesnetzagentur’s to keep abreast of and to retain their existing number. However, the smoothly, as evidenced by the high number of enquiries innovativeConsumer Advice products service and servicesis therefore in the an telecommuniimportant - process of switching providers does not always run regarding this issue. Most complaints and enquiries cationspoint of market. contact Thefor individual Bundesnetzagentur’s consumer enquiries Consumer and smoothly, as evidenced by the high number of enquiries related to timely service provision by the new provider, Advicecomplaints service relating is therefore to telecommunications. an important point It strives of regarding this issue. Most complaints and enquiries and the provision of information on the prerequisites contactto listen for to consumers’individual consumer concerns and enquiries to provide and related to timely service provision by the new provider, and procedure for switching providers and number complaintscompetent andrelating timely to support telecommunications. in asserting consumer It strives and the provision of information on the prerequisites porting. Particular difficulties arose when customers torights. listen The to consumers’Consumer Advice concerns service and also to provide seeks to and procedure for switching providers and number terminated the contract themselves rather than via the competentevaluate consumer and timely market support information in asserting and counteractconsumer porting. Particular difficulties arose when customers new provider, or when customers wanted to change rights.undesirable The Consumer market developments. Advice service Effective also seeks consumer to terminated the contract themselves rather than via the providers again due to delays in the switching process. evaluateprotection consumer ensures thatmarket consumers information achieve and an counteract equal new provider, or when customers wanted to change undesirablestanding in the market telecommunications developments. Effective market. consumer providers again due to delays in the switching process. protection ensures that consumers achieve an equal standing in the telecommunications market. CONSUMER PROTECTION AND ADVICE | TELECOMMUNICATIONS | 63

CONSUMER PROTECTION AND ADVICE | TELECOMMUNICATIONS | 63 To quickly assist those affected by service interrup- the contract may be terminated by the consumer tions, the Bundesnetzagentur’s Consumer Advice before the end of the contract term, subject to the service has set up an escalation point of contact for three-month notice period. switching providers. It contacts the relevant companies directlyTo quickly and assist resolves those anyaffected problems by service which have arisen. must“General be continued enquiries” under the include same conditionsall consumer at the enquiries interruptions, the Bundesnetzagentur’s Consumer new location. If the contractually agreed service cannot relating to the Bundesnetzagentur’s processes, Advice service has set up an escalation point of contact be provided after the relocation, the contract may be Of particular interest to consumers are answers to responsibilities and other issues within the for switching providers. It contacts the relevant terminated by the consumer before the end of the contractual issues, whereby the advice provided by the Bundesnetzagentur’s remit. One particularly conten- companies directly and resolves any problems which contract term, subject to the three-month notice Consumerhave arisen. Advice service is limited to issues pertaining period.tious issue at present is Deutsche Telekom’s planned to telecommunications law in accordance with the migration of the entire telephone network to IP LegalOf particular Services interest Act. Often to consumers the advice are providedanswers to by “Generaltelephony enquiries” (VoIP) include by 2018. all consumer Those seeking enquiries advice wanted companies,contractual issues, or a lack whe ofreby transparency the advice provided with regard by the to relatingto know to the whetherBundesnetzagentur’s this is permitted process byes, law, and what servicesConsumer or Advice order serviceconfirmation, is limited leads to issues to misunder- pertaining responsibilitiesadvantages and and other disadvantages issues within are the associated with VoIP. standingsto telecommunications when a contract law in is accordance concluded. with Many the Legalcomp - Bundesnetzagentur’sInformation about remit. network One particularly access was another laintsServices also Act. related Often theto the advice implementation provided by companies, of the content contentiousimportant issue topic. at present Common is Deutsche problems Telekom’s in this connection ofor contracts,a lack of transparency including priceswith regard and performance to services or data. plannedinclude migration the realisation of the entire of telephone agreed appointments network to with Consumers’order confirmation, primary leads grievances to misunderstandings were additional when a IP telephonytechnicians, (VoIP) port by 2018. rental Those and generalseeking advicenetwork expan- contract is concluded. Many complaints also related to wanted to know whether this is permitted by law, and unanticipated costs or major discrepancies between the sion. the implementation of the content of contracts, what advantages and disadvantages are associated transmission speeds promised in the contract and including prices and performance data. Consumers’ with VoIP. Information about network access was those actually provided. It is therefore important to Many consumers also contacted the Consumer Advice primary grievances were additional unanticipated costs another important topic. Common problems in this obtainor major as discrepancies much information between as the possible transmission before conclud- connectionservice include about thebilling realisation complaints. of agreed They queried ingspeeds a contract. promised This in the is whycontract the andBundesnetzagentur those actually appointmentsindividual with invoice technicians, items whereport rental they and were general unsure about plansprovided. to provide It is therefore a product important information to obtain sheet as much contain- networka fee-based expansion. contractual relationship. Most of these inginformation key contractual as possible information. before concluding a contract. queries related to subscription agreements concluded This is why the Bundesnetzagentur plans to provide a Manyby consumers consumers also on contacted the internet. the Consumer Further Advice enquiries Consumerproduct information complaints sheet in containing connection key with contractual the reloca - servicerelated about to billing call-by-call complaints. connections, They queried international tioninformation. process related to the failure to meet installation individualroaming invoice and items premium where SMS they services.were unsure about deadlines, long waiting times, and a lack of communi- a fee-.based contractual relationship. Most of these cationConsumer and complaints cooperation in connection on the part with of telecommunicathe relocation - queries related to subscription agreements concluded process related to the failure to meet installation by consumers on the internet. Further enquiries related tions providers. According to the provisions of section deadlines, long waiting times, and a lack of to call-by-call connections, international roaming and 46 of the of the German Telecommunications Act communication and cooperation on the part of premium SMS services. (TKG), the contract must be continued under the same telecommunications providers. According to the conditionsprovisions of at section the new 46 location. of the of the If the German contractually agreedTelecommunications service cannot Act be (TKG), provided the contract after the relocation,

Development of interference volumes by topic cluster from 2012 to 2015

6458 6591 Wire-based 6325 telecommunications networks, 6180 734 including DSL 919 1520 Short-range devices 1246 461 424 549 Flight radiotelephony 518 542 Private mobile radio 610 590 239 WLAN, WiMAX, Bluetooth, 312 205 cordless telephones 223 285 685 230 Authorities and organisations concerned with 695 234 public safety 599 225 461 463 492 456 Amateur radio traffic

486 459 481 531 Mobile communications 540 497 492 484

459 491 Other interference

Broadcasting

2012 2013 2014 2015

64 | BUNDESNETZAGENTUR | ANNUAL REPORT

Dispute resolution resolution proposal or the matter was resolved before 64 | TheBUNDESNETZAGENTUR Bundesnetzagentur’s | dispute ANNUAL resolution REPORT 2015 panel acts formal proceedings began. The percentage of as an intermediary within the scope of the TKG in proceedings in which the respondent chose not to take disputes between customers and telecommunications part in the dispute resolution proceedings, without providers. It aims to find a solution that is acceptable to offering a solution to the issue at hand, was 30%. both parties and thus avoid a legal dispute. Dispute Disputeresolution resolution provides a fast, unbureaucratic and cost- Dispute resolution cases in 2015 Theeffective Bundesnetzagentur’s alternative to civil dispute proceedings. resolution panel acts as an intermediary within the scope of the TKG in 2 disputes between customers and telecommunications The Bundesnetzagentur received a total of providers. It aims to find a solution that is acceptable to 1,104 requests for dispute resolution in 2015. There bothwere parties also 300 and other thus enquiries avoid a legal and dispute.requests Dispute for resolutionassistance. provides This represents a fast, unbureaucratic another year-on and-year cost- 28 effectiveincrease. alternative This very intensive to civil proceedings. use of the dispute 70 resolution panel is due to the 2012 amendment of the TheTKG, Bundesnetzagentur which expanded the received panel’s apowers, total of particularly 1,104 requestsin contract for lawdispute disputes resolution pertaining in 2015. to consumer There were also

300protection other enquiries rights laid and down requests in the for TKG. assistance. This made This it Amicable agreement

representspossible to another reduce theyear-on-year burden on increase. ordinary Thiscourts very in Respondent withdrew intensivemany contractual use of the disputes dispute between resolution companies panel is dueand to from proceedings Complainant withdrew theend 2012 customers amendment and reach of the an TKG, out-of which-court expanded settlement. the from proceedings/refused panel’s powers, particularly in contract law disputes to participate

pertainingIn 2015 the to dispute consumer resolution protection panel rights actively laid down in thesupported TKG. This the made legislative it possible procedure to reduce for the the burden on

ordinaryimplementation courts in of many the European contractual Directive disputes on between The percentage ofof eligibleeligible dispute dispute resolution resolution cases cases companiesAlternative and Dispute end customers Resolution. and This reach draft an legislation out-of- pertaining to to contractual contractual matters matters in in 2015 2015 (58%) (58%) courtprovides settlement. for, among other things, amendments to the remained virtuallyvirtually unchanged unchanged year year on on year. year. Most Most TKG and a new consumer dispute resolution act. The contentious mattersmatters related related to to the the provision provision of of Inpractices 2015 the of dispute all dispute resolution resolution panel panels actively in Germany supported contractually agreed agreed performance performance levels, levels, for for instance, instance, theare legislative to be standardised procedure and for the the Bundesnetzagentur’s implementation of the data transmission rates rates oror lengthylengthy periods periods of of connec- Europeandispute resolution Directive services on Alternative are to be Dispute provided Resolution. free of tionconnection downtime. downtime. The number The number of billing of billing complaints rose Thischarge draft in future.legislation The provideslegislation for, is amongscheduled other to come things, slightlycomplaints to 16%. rose Theslightly percentage to 16%. ofThe dispute percentage resolution of amendmentsinto effect in springto the TKG2016. and a new consumer dispute casesdispute relating resolution to problems cases relating switching to problems providers, resolution act. The practices of all dispute resolution relocationswitching providers, issues or number relocation porting issues fell or numberonce again, panelsIn 2015 in 1,100Germany proceedings are to be were standardised concluded and by the ultimatelyporting fell accountingonce again, uforltimately just 17%. accounting for just Bundesnetzagentur’sdispute resolution panel. dispute In 11% resolution of cases, services the are to 17%. beapplication provided freewas ofwithdrawn charge in by future. the complainant The legislation before is Switching providers scheduledthe dispute to resolution come into process effect in began spring due 2016. to, for WhenSwitching a switch providers of providers occurs, telecommunica- example, the matter already having been resolved. In tionsWhen providers a switch of and providers network occurs, operators telecommunications have a legal In32% 2015 of 1,100 cases, proceedings the application were for concluded dispute resolution by the had obligationproviders and to ensure network that operators there is haveno disruption a legal obligation to the disputeto be rejected resolution because panel. the In prerequisites 11% of cases, for the carrying applica - serviceto ensure provided that there to customersis no disruption by the to company the service they are tionout wasdispute withdrawn resolution by proceedings the complainant had not before been the met leavingprovided before to customers the contractual by the company and technical they are require leaving- dispute(no breach resolution of consumer process protection began due rights to, for according example, to mentsbefore forthe thecontractual switch have and technicalbeen met. requirements The service of for the thethe matter TKG). already having been resolved. In 32% of subscriberthe switch havemust been not bemet. interrupted The service for of more the subscriber than one cases, the application for dispute resolution had to be calendarmust not day.be interrupted If the switch for to more the thannew providerone calendar is Of the remaining 618 dispute resolution proceedings, rejected because the prerequisites for carrying out unsuccessful,day. If the switch the to donor the new provider provider is obligated is unsuccessful, to resume the parties reached an agreement in 70% of cases. In the donor provider is obligated to resume service dispute resolution proceedings had not been met (no service provision. To ensure that the process of the majority of cases, the parties reached a settlement provision. To ensure that the process of switching breach of consumer protection rights according to the switching providers runs smoothly, consumers are amongst themselves prior to the issue of a dispute providers runs smoothly, consumers are advised to task TKG). advised to task the new provider with terminating the the new provider with terminating the contract with the contract with the old provider rather than attempting old provider rather than attempting to do so Of the remaining 618 dispute resolution proceedings, to do so themselves. themselves. the parties reached an agreement in 70% of cases. In the majority of cases, the parties reached a settlement amongst themselves prior to the issue of a dispute resolution proposal or the matter was resolved before formal proceedings began. The percentage of proceed- ings in which the respondent chose not to take part in the dispute resolution proceedings, without offering a solution to the issue at hand, was 30%. CONSUMER PROTECTION AND ADVICE | TELECOMMUNICATIONS | 65

To this end, the new provider sends the consumer a Despite efforts within the industry to reduce the error number porting form which covers both the terminati- rate when switching providers, the Bundesnetzagentur on of the contract and the application for number continues to channel all available legal resources into porting. ensuring that the regulations on switching providers are implemented in accordance with the law. Based on If anything goes wrong during the switching process, the findings obtained from the escalation procedure, it the consumer should initially contact the companies assesses whether companies are in breach of their involved. If this does not yield the desired results, the obligations as recipient or providers. Following the parties can contact the Bundesnetzagentur. initiation of fine proceedings against three major companies accused of failing to meet their obligations The Bundesnetzagentur has determined that 229 with regard to switching providers in 2014, further fine providers are now obligated to engage in immediate proceedings were completed in February 2015. The and non-discriminatory cooperation within the Bundesnetzagentur fined the companies in question a framework of the escalation procedure. The Bundes- total of €300,000. All four providers account for around netzagentur forwards consumer complaints directly to 70% of complaints received about switching providers. the relevant companies in each case if, in contravention The appeals lodged by two of the companies are being of the statutory regulations, service is interrupted for heard by Bonn Local Court. more than one calendar day when switching providers. The companies are asked to present their stance on the Transparency measures – draft Transparency Ordinance matter in hand and quickly propose targeted solutions. The Bundesnetzagentur has drafted a Transparency The aim is to promptly clarify what has to be done by Ordinance to provide consumers with additional each party to bring the change of providers to a information about telephone and internet services. The successful conclusion and ensure that consumers once starting point was an analysis of the information again have access to telecommunications services. The behaviour of providers of fixed and mobile broadband primary aim of the escalation procedure is to reinstate connections. The Bundesnetzagentur’s market study consumers’ telecommunications services as quickly as revealed that – across all technologies, products and possible. providers – there is a major discrepancy between the contractually agreed maximum data transmission rate Experience shows that an increasing number of and the actual data transmission rate. It also became consumers are making use of the support offered by apparent that no information, or no robust informa- the Bundesnetzagentur. In 2015 the Bundesnetzagen- tion, on realisable data transmission rates was being tur represented consumer interests in around 30,000 provided in contracts despite the fact that transparen- cases pertaining to switching providers (including cy of service provision has a major impact on customer repeat enquiries). The number of escalation cases satisfaction. With this in mind, the Bundesnetzagentur initiated remained constant year on year at around initiated a dialogue process with industry. The 5,300. outcome is a binding regulatory concept which improves transparency for consumers. Despite making Ultimately it is within the scope of influence and in the numerous valuable contributions, the ideas proposed interests of companies in the market to themselves by industry were too vague for a self-regulatory reduce the error rate for switching providers and thus approach. There were also serious doubts as to whether strengthen consumer confidence in a well-functioning the proposals would be implemented voluntarily by all process by quickly and comprehensively establishing providers. The draft ordinance underwent a public automated processes. The reduction in the number of consultation process in February 2014. The draft was complaints received from the second half of 2015 revised on the basis of the comments received and suggests that there has been a general improvement submitted to the responsible ministries in September 2014 with a view to reaching the necessary consensus. in the process of switching providers for the first time since the process was changed. The Bundesnetzagentur will closely monitor further developments.

It continues to firmly support initiatives launched by providers and professional associations to this end, particularly the automated coordination process and exchange of porting data. 66 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

The draft ordinance covers the following key aspects: exceeding the agreed volume. This will protect consumers from unexpectedly high bills. The product information sheet The Transparency Ordinance has yet to enter into As provided for in the coalition agreement, providers force, despite there being political will to make this must, prior to concluding a contract, offer consumers a happen. The Federal Ministry of Justice and Consumer product information sheet covering the key compo- Protection, for example, has expressly welcomed the nents of the contract, including the contract duration, regulations of the Transparency Ordinance. However, minimum and maximum data transmission rates, to ensure a solid legal basis for the ordinance, it was conditions which lead to a reduction in the data necessary to first make some amendments to the draft transmission rate, and the beginning and end of the Consumer Dispute Resolution Act. The draft Transpa- contract. The layout and content of product informati- rency Ordinance will not be presented to the Bundes- on sheets will be specified by the Bundesnetzagentur. tag for deliberation until coordination of the draft This information should be highlighted in the contract. Consumer Dispute Resolution Act is complete. The Bundesnetzagentur intends to use its political scope to Checking data transmission rates after activation of a ensure that the ordinance comes into effect as quickly connection as possible. The regulatory framework for telecommu- After activation of a connection, consumers have a nications is currently subject to revision at the legal right to be informed of the current data transmis- European level. The Bundesnetzagentur’s draft sion rate of the mobile or fixed-network connection. ordinance can be adapted to take account of this. Consumers are therefore able to check compliance with contractually promised speeds and document these to IP migration of Telekom Deutschland GmbH facilitate the process of contesting possible perfor- DTAG wants to make its existing landlines throughout mance deficiencies. Providers can fulfil this obligation Europe suitable for internet communication by 2018 by offering customers their own measuring tool. and migrate its network to IP-based telephony. Voice Alternatively, they can refer consumers to the communication will thus be transmitted in packet- Bundesnetzagentur’s measuring service (www. switched mode. To achieve this, around 70,000 DTAG breitbandmessung.de), which was launched on 18 customers in Germany are being migrated to the new September 2015. This service compares contractually system every week. Other telecommunications agreed data transmission rates with actual data companies in Germany are also focusing on IP transmission rates. technology and offering digital telephony. For many DTAG customers, the IP migration constitutes a radical Presenting and storing measurement results change – not only due to the contractual implications. Providers are obligated to show consumers “at a Contracts which, in some cases, have been in place for glance” the contractually agreed minimum and decades are being terminated by the company. It is also maximum data transmission rates and the data necessary to determine on a timely basis whether transmission rate actually measured. The measure- existing terminal equipment and special safety-related ment results must be storable and documented in the services (medical alarms, security alarms, fire alarms) online customer centre. function in the IP world. Moreover, there have been instances where the IP technology – and therefore the Private users can easily carry out several measure- telephone service – has failed during the changeover ments and raise complaints about any discrepancies phase. between actual and contractually agreed data trans- mission rates with their provider. It should be noted that the introduction of IP-based technology by DTAG is subject to very little regulatory Contract duration and cost control control. Companies in the market are free to decide Many consumers find it difficult to keep track of when what products they offer. No legal obligation exists to their contract expires. The Bundesnetzagentur offer one or more specific types of connection, nor are therefore intends to make it legally binding for companies obligated to seek approval from the providers to specify on monthly bills the date upon Bundesnetzagentur for certain connection types. which the contract began and the end of the minimum However, the Bundesnetzagentur must ensure that contractual period. This creates transparency for there is no breach of TKG consumer protection consumers. The rules on cost control are also to be provisions (sections 43a ff TKG) and that the universal optimised. In certain cases, warnings are to be service, ie the provision of basic telecommunication introduced for mobile tariffs in the event of data traffic services (sections 78 ff TKG), is provided.

CONSUMER PROTECTION AND ADVICE | TELECOMMUNICATIONS | 67

CONSUMER PROTECTION AND ADVICE | TELECOMMUNICATIONS | 67

cases, have been in place for decades are being DTAG is also introducing POTS (Plain Old Telephone terminated by the company. It is also necessary to System) cards, which translate analogue or Due to the high number of complaints initially determine on a timely basis whether existing terminal ISDN telephone signals into IP signals, thus offering received in connection with the IP migration, the equipment and special safety-related services (medical customers who only have a voice connection a complete Bundesnetzagenturalarms, security alarms, has entered fire alarms) into afunction structured in the substitute for their existing services. dialogueIP world. with Moreover, DTAG with there the have aim been of making instances the where migrationthe IP technology process as – consumerand therefore friendly the telephone as possible. service Combating number misuse The– hasGerman failed federal during thestates’ changeover working phase. group for telecom- The TKG places responsibility on the munications, information technology and post and the Bundesnetzagentur for combating number misuse. FederationIt should ofbe German noted that Consumer the introduction Organisations of IP- (VZBV) This could involve the Bundesnetzagentur imposing arebased also involved technology in bythis DTAG process. is subject Thanks to veryto the little great fines for breaches of TKG consumer protection dedicationregulatory of control. all involved, Companies individual in the improvements market are provisions, such as breaches of the rules on call price havefree been to decide made what for the products benefit they of private offer. No households, legal indication and pricing messages, or breaches of particularlyobligation theexists establishment to offer one or of more a test specific centre for prohibitions on circumvention. However, breaches of specialtypes services. of connection, Here, nortests are can companies be conducted obligated to competition rules, such as spam faxes and texts, also determine,to seek approval among fromother the things, Bundesnetzagentur which medical for alarm fall under the Bundesnetzagentur’s remit. Consumers systemscertain are connection compatible types. with However, IP technology. the This are to be protected against disturbance and financial providesBundesnetzagentur consumers with must the ensure protection that there they is needno in loss caused by number misuse and other market thebreach event of TKGan emergency. consumer protection The Bundesnetzagentur provisions has participants are to be protected against distortion of also(sections succeeded 43a in ff TKG)ensuring and that the DTAG universal takes a more competition caused by breaches of law transparentservice, ie approachthe provision to communicating of basic the contract telecommunication services (sections 78 ff TKG), termination process. These, and further results of the In 2015 the Bundesnetzagentur received a total of is provided. 77,772 written complaints and queries about dialogue round, have increased acceptance of the IP telephone number misuse, which shows a slight rise migration process. This is reflected in the steady Due to the high number of complaints initially received from 65,127 complaints in 2014. reduction in the number of complaints received since in connection with the IP migration, the August 2015. The Bundesnetzagentur will continue to Bundesnetzagentur has entered into a structured monitor the migration process very carefully. dialogue with DTAG with the aim of making the

migration process as consumer friendly as possible. DTAG is also introducing POTS (Plain Old Telephone The German federal states’ working group for System)telecommunications, cards, which translate information analogue technology or ISDN and post telephone signals into IP signals, thus offering and the Federation of German Consumer Organisations Main subjects of written complaints and enquiries in 2015 customers(VZBV) are who also only involved have a in voice this process.connection Thanks a comple to the- % te substitutegreat dedication for their of all existing involved, services. individual 0.4 improvements have been made for the benefit of

Combatingprivate households, number misuse particularly the establishment of a

Thetest TKG centre places for responsibility special services. on Here, the Bundesnetzagen tests can be - turconducted for combating to determine, number among misuse. other This things, could whichinvolve 54.9 medical alarm systems are compatible with the Bundesnetzagentur imposing fines for breaches of TKGIP consumertechnology. protection This provides provisions, consumers such with as thebreaches 37.8 of theprotection rules on they call need price in indication the event of and an pricingemergency. The messages,Bundesnetzagentur or breaches hasof prohibitions also succeeded on in circumventi ensuring that- on.DTAG However, takes breaches a more transparent of competition approach rules, to such as spamcommunicating faxes and texts, the contralso fallact terminationunder the process. Bundesnetzagentur’sThese, and further results remit. of Consumers the dialogue are round, to be have protectedincreased against acceptance disturbance of the IP and migration financial process. loss caused This is reflected in the steady reduction in the number of by number misuse and other market participants are to complaints received since August 2015. The be protected against distortion of competition caused Bundesnetzagentur will continue to monitor the by breaches of law migration process very carefully. 6.1 0.8 In Many2015 the consumers Bundesnetzagentur will not actually received be affected a total by of the 77,772transition written until complaints 2016, when and conventional queries about telephone Number spam numberDSL connections, misuse, which namely shows DSL a 6,000/16,000 slight rise from (based 65,127 on Pricing complaintsanalogue/ISDN in 2014. technology), are also migrated. Other complaints

1) Predictive diallers Information requests and enquiries CONSUMER PROTECTION AND ADVICE | TELECOMMUNICATIONS | 69

CONSUMER PROTECTION AND ADVICE | TELECOMMUNICATIONS | 69

68 The| BUNDESNETZAGENTUR number of telephone | ANNUALcomplaints REPORT received 2015 by the Most complaints about call number spam received by the Bundesnetzagentur has also risen from Bundesnetzagentur related to telephone spam (67%), 20,327 complaints about number misuse and followed by complaints about fax spam (31%) and email unsolicitedThe number marketing of telephone calls in complaints2014 to 22,085 received in 2015. by the spamMost with complaints a related about telephone call number number spam (2%). received by the Bundesnetzagentur has also risen from Bundesnetzagentur related to telephone spam (67%), The number of telephone complaints received by the Most complaints about call number spam received by 20,327 complaints about number misuse and Grafik:followed „Aufteilung by complaints der Beschwerden about fax spam zu (31%) Rufnum and- email Bundesnetzagentur has also risen from 20,327 com- the Bundesnetzagentur related to telephone spam Thunsolicitede Bundesnetzagentur marketing callsopened in 2014 1,983 to administrative 22,085 in 2015. mernspam-Spam with a2015“ related (Kreisdiagramm telephone number aus (2%).vergangenem Jahr plaints about number misuse and unsolicited market- (67%), followed by complaints about fax spam (31%) and proceedings last year, the majority of which involved anhand der Zahlen aus folgender Tabelle aktuali- sieren) ing calls in 2014 to 22,085 in 2015. email spam with a related telephone number (2%). Kommentar [31]: Streichen? extensive investigation. In 170 cases the Grafik: „Aufteilung der Beschwerden zu Rufnum- BundesnetzagenturThe Bundesnetzagentur ordered opened the disconnection 1,983 administrative of mern-Spam 2015“ (Kreisdiagramm aus vergangenem Jahr The Bundesnetzagentur opened 1,983 administrative Breakdown of complaints about spam in 2014 Kommentar [32]: 2015? 3,913 phone numbers. Billing and collection bans were proceedingsproceedings last last year, year, the the majority majority of of which which involved involved % anhand der Zahlen aus folgender Tabelle aktuali- sieren) Kommentar [31]: Streichen? also issued for 47 telephone numbers. A ban on billing 2 extensiveextensive investigation. investigation. In In 170 170 cases cases the the Bundesnetz - meansBundesnetzagentur that the sums involved ordered maythe disconnection no longer be of agentur ordered the disconnection of 3,913 phone Breakdown of complaints about spam in 2014 Kommentar [32]: 2015? charged.numbers.3,913 phone If Billingconsumers numbers. and collectionhave Billing already and bans receivedcollection were also an bans issuedinvoice were % 2 butforalso not47 issuedtelephone yet paid for it, 47numbers. the telephone ban onA ban collection numbers. on billing applies.A ban means on The billing that Bundesnetzagenturthemeans sums that involved the sums may also involved nobanned longer may anti be -nocharged.competitive longer If be businessconsumerscharged. models If have consumers inalready two caseshave received alreadyand issuedan invoice received warnings but an not invoice in yet a numberpaidbut it,not the of yet cases. ban paid on it, collection the ban on applies. collection The applies.Bundesnetz The- agenturBundesnetzagentur also banned anti-competitivealso banned anti- businesscompetitive models 67 Spaminbusiness two cases models and issued in two warnings cases and in issued a number warnings of cases. in a Asnumber part of itsof cases.work combating number misuse, the Fax spam BundesnetzagenturSpam is responsible for combating spam, 67 Telephone spam whetherAsSpam part of telephone, its work combating fax or e-mail. number The misuse, the Email spam BundesnetzagenturBundesnetzagenturAs part of its work can combatingis responsible only take number action, for combating misuse, however, the spam, if Fax spam thewhetherBundesnetzagentur spam telephone,can be related fax is orrespoto e-mail.a telephonensible The for Bundesnetznumber. combating Hence -spam, Combating text spam Telephone spam theagenturwhether criterion can telephone, onlyfor intervention, take fax action, or e- evenmail.however, forThe email if the spam, spam iscan The Bundesnetzagentur continued to consistentlyEmail take spam thatbeBundesnetzagentur related a telephone to a telephone number can is number.only giv en,take perhaps Hence action, the ashowever, criteriona contact if Combatingaction against text unsolicited spam promotional text messages in number.forthe intervention, spam Telephone can be even related spam for coverstoemail a telephone spam, spam istexts, number.that telephone a tele- Hence The2015Combating Bundesnetzagentur following text 13,485 spam consumer continued complaints to consistently about take this prizephonethe criterionscams, number “missed for is given,intervention, call” perhaps scams even andas a unreasonableforcontact email number. spam, is actiontypeThe of Bundesnetzagenturagainst nuisance unsolicited advertising. promotionalcontinued A considerable to textconsistently messages proportion take of telephoneTelephonethat a telephone behaviour spam covers number by callspam is centres giv texts,en, perhaps(predictivetelephone as prizea contact incomplaintsaction 2015 following against related unsolicited 13,485 to text consumer messages promotional complaints in which text messagesshort about URLs in diallers).scams,number. “missed Telephone call” scams spam andcovers unreasonable spam texts, telephone telephone thiswere2015 type advertised following of nuisance under 13,485 advertising. various consumer pretexts. A complaintsconsiderable When aboutrecipients this behaviourprize scams, by call“missed centres call” (predictive scams and diallers). unreasonable proportionopenedtype of the nuisance oflinks, complaints they advertising. were related automatically A considerableto text messages redirected proportion in to of Thetelephone number behaviourof complaints by call relating centres solely (predictive to telephone whichwebsitescomplaints short most URLs related commonly were to advertisedtext running messages promotionalunder in which various short URLs numberThediallers). number spam of rea complaintsched 72,099 relating in 2015. solely This to represents telephone pretexts.competitions.were advertised When To recipients take under part, various opened consumers pretexts. the links, had When to they provide wererecipients annumber increase spam compared reached with 72,099 the in previous 2015. This year represents automaticallypersonalopened data. the links, redirectedIn other they cases, were to websites shortautomatically URLs most were commonly redirected used to to (60,953anThe increase number complaints). compared of complaints with the relating previous solely year to telephone(60,953 runningadvertisewebsites promotional lending most commonly services competitions. and running premium promotionalTo take rate part, chat and adult complaints).number spam reached 72,099 in 2015. This represents consumersentertainmentcompetitions. had services. toTo provide take part,The personal Bundesnet consumers data.zagentur hadIn other to provide ordered cases, Written complaints about spam an increase compared with the previous year shortthepersonal disconnection URLs data.were Inused of other more to advertisecases, than short2,700 lending URLs mobile serviceswere numbers used and to (60,953 complaints). 60,953 72,099 premiumwhichadvertise were rate lendingused chat to and servicessend adult illegal and entertainment promotional premium rate services.text chat messages. and adult Theentertainment Bundesnetzagentur services. ordered The Bundesnet the disconnectionzagentur ordered of Written complaints about spam moreCallthe centre thandisconnection phone2,700 mobile practices of more numbers than 2,700which mobile were used numbers to 60,953 72,099 sendDuringwhich illegal the were yearpromotional used under to send review text illegal messages. the promotionalBundesnetzagentur text messages. was faced with a considerable number of complaints – Call29,387Call centre centre in total phone phone – about practices practices call centres’ nuisance telephone DuringbehaviourDuring the the resulting year year under under from review review the use the the of Bundesnetzagentur Bundesnetzagenturpredictive diallers. wasPredictivewas faced faced with diallers with a considerable a areconsiderable programmes number number which of ofcomplaints dial complaints several – – 29,387numbers29,387 in totalinat totalthe – same about – about time. call call centres’The centres’ number nuisance nuisance and telephone telephone behaviourcircumstancesbehaviour resulting resulting of the from attempted from the the use use calls, of of predictive however,predictive diallers. can diallers. PredictivePredictive diallers diallers are are programmes programmes which which dial dial several several 2011 2012 2013 2014 2015 numbersnumbers at atthe the same same time. time. The The number number and and circum - stancescircumstances of the attempted of the attempted calls, however, calls, however, can become can an unreasonable nuisance for those receiving the calls. In 2011 2012 2013 2014 2015 such cases the Bundesnetzagentur has recourse to various measures within the scope of number adminis- tration. On 1 January 2015 self-imposed industry codes were adopted and published by several associations. These codes contain specific frameworks for call behaviour as well as industry rules for call times and the number of attempted calls. CONSUMER PROTECTION AND ADVICE | TELECOMMUNICATIONS | 69

Directory enquiry services/circumvention models Measuring broadband speeds The Bundesnetzagentur ordered the disconnection of Zafaco GmbH was commissioned by the Bundesnetz- the directory enquiry service numbers 11865 and agentur in 2015 to develop a broadband test. This test 11878, and also imposed a ban on billing and collection. enables broadband users to quickly and easily measure Local numbers, freephone numbers starting with 0800 the speed of their internet connection, regardless of and medium rate service numbers were being used to provider or technology, and thus determine the make consumers call the directory enquiry service performance of their fixed or mobile broadband numbers 11865 and 11878, thus intentionally con- connection. The test was launched on 25 September cealing high tariffs and circumventing the statutory 2015 on the website www.breitbandmessung.de. regulations on price transparency. Following the disconnection of these two numbers, several measures The Bundesnetzagentur had already carried out were imposed on 0180 and 0900 numbers which were nationwide measurements in 2012 and 2013, when being used to continue this business model. internet users were able to measure the data transmis- sion rate of their internet access service. The results of Combating nuisance marketing calls these measurements were incorporated into two In 2015 the Bundesnetzagentur received 24,455 written studies on the service quality of broadband internet complaints about unsolicited marketing calls. The access. These studies are available on the number of complaints therefore remained high, but Bundesnetzagentur’s website at www.bundesnetzagen- was lower than in the previous year thus continuing tur.de/qualitaetsstudie. The results of both Bundes- the positive trend of previous years. The Bundesnetz- netzagentur measurement studies and industry agentur also dealt with 22,085 telephone enquiries and dialogue on this issue were taken into account when complaints about number misuse and unsolicited developing the test. The intensive dialogue with marketing calls last year. industry was continued in various workshops during the development of the broadband speed test. The Bundesnetzagentur continued to conduct fine proceedings in 2015. Fines totalling roughly The basis for measuring broadband speeds is provided €467,350.00 were imposed due to unsolicited marke- for by the transparency requirements of the Telecom- ting calls and callers hiding their identity. munications Act (sections 43a, 45n TKG). End custo- Warnings were also issued to enterprises and individu- mers should be able to easily compare the level and als from various branches of industry. Those most quality of telecommunications services. Under the frequently involved were enterprises advertising statutory regulations, the Bundesnetzagentur can energy supply services via the telephone. The other therefore carry out its own measurements or develop main sectors involved were telecommunications, tools which allow customers to carry out their own insurance and finance, the same as in the previous measurements. The test enables a comparison of the year. actual data transmission rate of a broadband connec- tion with the contractually agreed data transmission rate. Customers can carry out the test themselves and the results can be stored electronically.

Customers can measure the speed of fixed broadband internet access services via a browser-based measure- ment client, which runs using a Java plug-in. Via another measurement client, customers can measure mobile broadband internet access services from smartphones or tablets using an app which supports both Android and iOS. From a technical perspective, the actual measurement process is identical in both cases.

70 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

The customer’s specific contractually agreed tariff were largely prompted by delays in the provision of a information is requested during the measurement telephone line. Thanks to a separate work process process. To avoid consumers having to enter data agreed by the Bundesnetzagentur and DTAG, the manually, providers’ tariff data is stored in a database Bundesnetzagentur is able to ensure a speedy and, in which is regularly updated. The customer can then most cases, satisfactory solution for consumers. select the provider/tariff from a dialogue box. This greatly facilitates the assignment of individual contract The nationwide provision of public payphones and data. cardphones is likewise part of the universal service. In November 2014 an inventory of payphones and In conjunction with industry, the Bundesnetzagentur cardphones listed around 29,000 phones. At the same has developed a template for data delivery. In addition time, mobile communications have continued their to the data supplied by large telecommunications extensive spread, now having reached more than providers, the Bundesnetzagentur wrote to more than 113.40 million SIM cards. The market developments in 300 companies in 2015 requesting tariff information. It mobile telecommunications and the full coverage has consequently received tariff data from various nationwide that has been attained with landlines have providers which, together, represent more than 90% of led to a complete change in users’ telecommunications the fixed network market volume. The list of tariff behaviour and subsequently an extremely low level of information stored in the measurement database is demand for public telephones. Despite the measures updated and supplemented on an ongoing basis. adopted in the past, such as acknowledging the “basic telephone” as being a public pay telephone or card- Where possible, the Bundesnetzagentur also aims to phone, the number of extremely uneconomic locations record and take account of all environmental factors of public telephones increased further in the period which could affect customers’ measurement results. from January to November 2015. Such factors include the type of connection (WLAN) or whether or not additional terminal devices are using Text and video relay service the internet during the measurement process. With The TKG sets out that providers of publicly available certain routers, which account for a large share of the telephone services have to set up a text and video relay market, additional parameters can already be obtained, service for deaf and hearing-impaired people. The aim including the transmitted data volume sent and is to enable such individuals to have access to custom- received. It is also possible to obtain additional values ary “voice” telephony, thus ensuring telephone contact for both the iOS and Android mobile operating with family members, friends, doctors, local authori- systems. The Bundesnetzagentur’s long-term objective ties, etc. Via a PC, the deaf person can set up a video or is to collect additional parameters for as many router data link to the text and video relay service’s sign types as possible. language interpreter, who then translates the message into spoken language for the recipient. He/she then Over 400,000 measurements were carried out in 2015, translates the recipient’s message back into sign more than half of these via the app. language or written language.

Universal service Through the text and video relay service, deaf people Last year around 4,350 consumers contacted the are able to make and receive calls to and from anybody Bundesnetzagentur for support in matters concerning participating in the service. The Bundesnetzagentur the provision of basic telecommunication services. The has been following this service since 2005 and since universal service comprises a minimum set of publicly 2009 has put the regular operation of this service out to available services of a specific standard to which all tender. end users, irrespective of their place of residence or work, shall have access at an affordable price. All providers of publicly available telephone services are obligated to provide their own text and video relay Telekom Deutschland GmbH provides the basic service service for deaf or hearing-impaired people, or to in Germany on a voluntary basis. Connection at a fixed commission a third party to do so. Because the market location to a public telecommunications network and has been unable to agree on an industry-wide solution access to publicly available telephone services contin- thus far, the Bundesnetzagentur regularly puts this ued to be the main focus of activities in universal service out to tender – most recently in 2014. The service in 2015. The number of complaints received by tender was awarded to Tess – Sign & Script – Relay the Bundesnetzagentur in this connection rose by 36% Dienste für hörgeschädigte Menschen GmbH, which compared with the previous year. For consumers, these CONSUMER PROTECTION AND ADVICE | TELECOMMUNICATIONS | 71

will provide the service from 2015 until the end of connections, a further rise in this type of interference 2018. complaint can be expected.

Furthermore, the Bundesnetzagentur once again took Calculating safety distances according to the Ordinance appropriate measures in 2015 to ensure that the text concerning the Controls for the Limitation of Electro- and video relay service would also be financed by the magnetic Fields (BEMFV) telecommunications operating companies. An increase Fixed radio installations with an equivalent isotropic in salaries for sign language interpreters and speech- radiated power of 10 watts or more can only be brought to-text interpreters has meant that the costs for the into service if the Bundesnetzagentur has issued a interpreters employed at Tess GmbH have also risen corresponding site certificate. To issue this site since 2015. Linked to this increased cost is an increase certificate, the Bundesnetzagentur calculates the in the contributions of telecommunications companies site-related safety distance required to comply with and in the call tariffs for users of the text and video limits for personal protection in Germany. relay service. As in previous years, any surplus of Tess GmbH will be distributed in full to the telecommuni- In urban areas, in particular, it is becoming increasin- cations companies that were called upon to make gly necessary to evaluate the location of radio installa- payment. tions on the basis of technical measurements. This is due to the increasing density of multiple-use radio Investigating interference – the radio monitoring and installations and their locations. To minimise outlay inspection service and costs, the Bundesnetzagentur plans to expand the The Bundesnetzagentur’s radio monitoring and calculation process to include a near-field analysis with inspection service makes an important contribution to a view to dispensing with cost-intensive field strength consumer protection. An average of more than 6,000 measurements wherever possible in future. cases of radio interference are dealt with and elimina- ted by employees of the radio monitoring and inspec- The Bundesnetzagentur has commissioned a study for tion service each year. These include radio interference this purpose and is carrying out systematic measure- to the aeronautical service, interference to DSL connec- ments at selected radio installation sites. The aim is to tions and interference on vehicle radio keys caused by provide an additional near-field evaluation module by radiation. The radio monitoring and inspection service the end of 2016. is available 24 hours a day, seven days a week, to ensure that important radio services, such as aeronautical radio and applications used by authorities and organi- sations concerned with public safety, can be used without interference around the clock. The radio monitoring and inspection service is represented in 19 locations throughout

Germany and is equipped with the most up-to-date mobile and stationary measuring technology which enables it to investigate and remedy the causes of interference without delay.

A slight downward trend in the number of interference cases reported to the radio monitoring and inspection service has been observed in recent years. Bucking this trend, the number of incidents of interference in- creased significantly by around 7% in 2015 compared with 2014. This trend reversal is due to the considerable rise in interference to wire-based telecommunications networks including DSL. With a total number of 1,520 cases, interference to wire-based networks made up the largest statistic in 2015 across all categories.

Due to the ongoing nationwide broadband rollout and the associated sharp rise in wire-based broadband 72 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Mobile technologies continue to play a major role in Rulings, activities and working towards future-proof broadband networks, in proceedings particular in rural areas. In view of the fast growth in mobile data communications driven by broadband In view of the fast growth services, the Bundesnetzagentur provided additional spectrum in the 700 MHz, 900 MHz, 1,500 MHz and in mobile data communica- 1,800 MHz frequency bands. tions, the Bundesnetzagen- On 28 January 2015 it announced a decision on the tur auctioned off spectrum rules for awarding and auctioning this spectrum. Since a shortage of capacity had been established, the in the 700 MHz, 900 MHz, spectrum was awarded by way of an auction. Applica- 1,500 MHz and 1,800 MHz tions for admission to the auction could be submitted up until 6 March 2015. frequency bands. The Bun- Five companies applied for admission. Two applicants desnetzagentur conducted did not meet the entry requirements and their applica- proceedings on the introduc- tions were rejected. Three applicants qualified for the auction: tion of vectoring technology • Telefónica Deutschland GmbH & Co. OHG with the aim of enabling the • Telekom Deutschland GmbH ongoing broadband expan- • Vodafone GmbH sion and promoting compe- The auction proceedings were held in Mainz, Germany from 27 May to 19 June 2015. tition. A spectrum bundle comprising 270 MHz in total was auctioned off. The spectrum was made available on a technologically neutral and service-neutral basis and can now be deployed for all current and future technologies, such as the fifth-generation mobile communication standard, 5G.

The auction format was largely the same as in 2010. Spectrum management With respect to the 900 MHz band, each bidder was Mobile broadband – Project 2016 – able to purchase a maximum of 2 x 15 MHz (paired). Spectrum auction in 2015 This preserved the existing infrastructure whilst Powerful broadband networks that allow the rapid ensuring fair access for potential new entrants to this exchange of information and knowledge provide spectrum, which is particularly important for the basic commercial and social infrastructure that is of equal provision of voice telephony. importance to well-developed road and rail networks. They also form the backbone for business decisions on The award of spectrum was bound to a coverage location and increase the appeal of residential areas. obligation. The federal states have already submitted Mobile broadband plays a role in speeding up nation- the associated framework conditions regarding wide expansion. The Bundesnetzagentur had already broadband policy, which were taken into account in laid the foundations for the rollout of fast LTE net- the decision. Each assignee must provide blanket works in 2010 by auctioning off spectrum and the early broadband coverage to at least 97% of households in move by the Bundesnetzagentur to award spectrum in each federal state and 98% of households nationwide, the 800 MHz frequency band (known as Digital whilst achieving minimum transmission rates of 50 Dividend I) ensured that its high potential could be Mbit/s per sector deployed, especially in rural areas. This spectrum was key to the fast, economic expansion of broadband networks.

RULINGS, ACTIVITIES AND PROCEEDINGS | TELECOMMUNICATIONS | 73

Users must be offered average transmission rates of at other user groups – especially radio microphones and

least 10 Mbit/s. Full coverage is to be guaranteed along broadcasting – into consideration and demonstrate national motorways and high-speed railway lines how the needs of these user groups can be met. where legally possible and practicable. The entire Users must be offered average transmission rates of at other user groups – especially radio microphones and spectrum held by an assignee may be deployed in order After 181 rounds held over 16 auction days, the auction least 10 Mbit/s. Full coverage is to be guaranteed along broadcasting – into consideration and demonstrate to meet this target ended on 19 June 2015. All companies admitted to the nationalUsers must motorways be offered and average high-speed transmission railway lines rates of at howother the user needs groups of these – especially user groups radio can microphones be met. and auction successfully purchased frequency blocks: whereleast 10legally Mbit/s. possible Full coverage and practicable. is to be guaranteedThe entire along broadcasting – into consideration and demonstrate As part of its decision, the Bundesnetzagentur also spectrumnational heldmotorways by an assignee and high may-speed be deployedrailway lines in order Afterhow 181 the needsrounds of held these over user 16 groups auction can days, be met.the auction developed a concept designed to take the interests of towhere meet thislegally target possible and practicable. The entire ended on 19 June 2015. All companies admitted to the

spectrum held by an assignee may be deployed in order auctionAfter 181 successfully rounds held purchased over 16 frequencyauction days, blocks: the auction Asto part meet of this its decision, target the Bundesnetzagentur also ended on 19 June 2015. All companies admitted to the developed a concept designed to take the interests of auction successfully purchased frequency blocks: As part of its decision, the Bundesnetzagentur also developed a concept designed to take the interests of

Telefónica Deutschland GmbH & Co. OHG

Frequency band Frequency block Spectrum package Award type Highest bid

Telefónica Deutschland GmbH & Co. OHG

700 MHz (paired) 700 A 2 x 5 MHz specific €166,397,000

Frequency band Frequency blo ck Spectrum package Award type Highest bid

2 x 5 MHz abstract €166,847,000 700 C

2 x 5 MHz specific €166,397,000 700 MHz (paired) 700 A 2 x 5 MHz specific €195,520,000 900 MHz (paired) 900 A 2 x 5 MHz abstract €166,847,000 700 C 2 x 5 MHz abstract €189,958,000

900 G 2 x 5 MHz specific €195,520,000 900 MHz (paired) 900 A 1.8 GHz (paired) 1800 G 2 x 5 MHz abstract €239,228,000 2 x 5 MHz abstract €189,958,000 1800900 I G 2 x 5 MHz abstract €240,288,000 1.8 GHz (paired) 1800 G 2 x 5 MHz abstract €239,228,000 Total of the highest bids payable €1,198,238,000 1800 I 2 x 5 MHz abstract €240,288,000 Total of the highest bids payable €1,198,238,000

Telekom Deutschland GmbH

Frequency band Frequency block Spectrum package Award type Highest bid

Telekom Deutschland GmbH

700 MHz (paired) 700 D 2 x 5 MHz abstract €166,567,000

Frequency band Frequency block Spectrum package Award type Highest bid

700 E 2 x 5 MHz abstract €171,649,000

700 MHz (paired) 700 D 2 x 5 MHz abstract €166,567,000

900 MHz (paired) 900 D 2 x 5 MHz abstract €183,671,000

700 E 2 x 5 MHz abstract €171,649,000

900 E 2 x 5 MHz abstract €180,968,000 900 MHz (paired) 900 D 2 x 5 MHz abstract €183,671,000

900 F 2 x 5 MHz abstract €180,465,000

900 E 2 x 5 MHz abstract €180,968,000 1.5 GHz (unpaired) 1500 D 2 x 5 MHz abstract €42,964,000 900 F 2 x 5 MHz abstract €180,465,000

1500 F 2 x 5 MHz abstract €39,011,000 1.5 GHz (unpaired) 1500 D 2 x 5 MHz abstract €42,964,000 1500 G 2 x 5 MHz abstract €40,961,000 1500 F 2 x 5 MHz abstract €39,011,000 1500 H 2 x 5 MHz abstract €40,961,000

1500 G 2 x 5 MHz abstract €40,961,000 1.8 GHz (paired) 1800 B 2 x 5 MHz abstract €248,054,000

1500 H 2 x 5 MHz abstract €40,961,000

1800 E 2 x 5 MHz abstract €248,101,000

1.8 GHz (paired) 1800 B 2 x 5 MHz abstract €248,054,000

1800 H 2 x 5 MHz abstract €248,784,000

1800 E 2 x 5 MHz abstract €248,101,000

Total of the highest bids payable €1,792,156,000 1800 H 2 x 5 MHz abstract €248,784,000

Total of the highest bids payable €1,792,156,000 74 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015 74 | BUNDESNETZAGENTUR | JAHRESBERICHT 2015

Vodafone GmbH Frequency band Frequency Spectrum Award type Highest bid block package 700 MHz (paired) 700 B 2 x 5 MHz abstract €165,509,000 700 F 2 x 5 MHz abstract €163,476,000 900 MHz (paired) 900 B 2 x 5 MHz abstract €211,807,000 900 C 2 x 5 MHz abstract €203,298,000 1.5 GHz (unpaired) 1500 A 1 x 5 MHz abstract €40,939,000 1500 B 1 x 5 MHz abstract €40,939,000 1500 C 1 x 5 MHz abstract €40,919,000 1500 E 1 x 5 MHz abstract €42,961,000 1.8 GHz (paired) 1800 A 2 x 5 MHz abstract €237,494,000 1800 C 2 x 5 MHz abstract €258,247,000 1800 D 2 x 5 MHz abstract €249,133,000 1800 F 2 x 5 MHz abstract €255,967,000 1800 J 2 x 5 MHz specific €180,153,000 Total of the highest bids payable €2,090,842,000

Following the auction, the abstract frequency blocks After being allotted to the bidders, spectrum was purchased were allotted to the highest bidders in a initially assigned in accordance with the applications. separateFollowing process. the auction, The mobile the abstract spectrum frequency purchased blocks was TheGmbH spectrum and Vodafone assignments GmbH expire as follows: on 31 December thereforepurchased allotted were allotted to the successful to the highest bidders bidders Telefónica in a 2033.After being allotted to the bidders, spectrum was Deutschlandseparate process. GmbH The & Co.mobile OHG, spectrum Telekom purchased Deutschland was initially assigned in accordance with the applications. GmbHtherefore and allotted Vodafone to theGmbH successful as follows: bidders Telefónica The spectrum assignments expire on 31 December Deutschland GmbH & Co. OHG, Telekom Deutschland 2033.

Mobile spectrum in the 700 MHz to 1.8 GHz band following the 2015

0 0 0 0 0 0 0 0 auction and the allotment of abstract, frequency, , blocks purchased.,0 , ,0 , , , ,0 ,0 ,0 , ,0

694 703 708 694 703 763708 763 700 MHz 700 MHz ,0 ,0 ,0 733 0 758 0 ,0 788 7330 758 788 700 A 700 B – 700 F , 700700, A A 700700 B –B 700– 700 F F , 700 A 700 B – 700 F

700 MHz Rundfunk (DVB -T/DVBMobile-T2) spectrum in the 700 MHz Rundfunkto694 1.8 (DVB GHz-T703/DVB band-T7082) following the 2015733 758 763 788 700 MHz 7005 A 5 5 700 B5 – 700 F5 5 7005 5A 5 5 5 7005 B5 – 5700 F5 5 5 5 5 5 5 5 5 5 700 A 700 B – 700 F 700 A 700 B – 700 F Rundfunk (DVB-T/DVB-T 2) auction and the allotmentBroadcasting of (DVB abstract-T/DVB-T2) frequency blocks purchased.5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 700 MHz ( gepaart) 5 5 5 5 5 5 700 MHz (gepaart) 790 MHz 790 MHz 0 0 0 1 0 0 0 0 0 1 0 0 0 1 0 0 700 MHz (paired0) 0 1 0 0 0 , , , , , , , , , , , , , , , , , , , 790, MHz , , 800 MHz & 900 MHz 800 MHz & 900 MHz 700 MHz (gepaart) 800 MHz & 900 MHz 790 MHz 791,0 821 0 832 0 791,0 862 0 873 1 8808210 885 0 832 915 0 918 8621 925 0 9308730 880 885 ,0 960 0 915 918 925 930 960 , , , , , , , , , , , Befristet bis 2025 Befristet bis700 2025 MHz Befristet bis 2025 900 A 900 B –Befristet 900 G bis 2025 694,0 703900,0 A708 ,0 900 900 A B – 900733 G 900 B – 900 G 758,0 763,0 900788 A,0 900 B – 900 G 800 MHz & 900 MHz 700 A 700 B – 700 F 700 A 700 B – 700 F

791,0 821 832 862 873GSM-R 880 885 915 GSM918 -R 925 930 GSM -R 960 GSM-R Rundfunk (DVB-T/DVB-T2) 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Befristet5 bis5 2025 5 5 5 5 Befristet5 bis5 20255 5 5 5 5 5 5 5 9005 A 5 55 90055 B – 90055 G 55 55 5 9005 A 5 5 59005 B –5 9005 G5 5 5 5 5 5 5 5 5 5 5 5 5 5

GSM-R GSM-R 700 MHz (gepaart) 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 790990 MHz MHz 990 MHz 790 MHz 800 MHz (gepaart) 790 MHz 800 MHz (gepaart) 900 MHz (gepaart) 900 MHz (gepaart) 800 MHz & 900 MHz GSM-R (gepaart) GSM-R (gepaart) 7911.5,0 GHz 821,0 832,0 1452.0 862,0 873,1 8801492,0 .0885 ,0 915,0 918,1 925,0 930,0 960,0 990 MHz 790 MHz 800 MHz (gepaart) Befristet bis 2025 Befristet bis 2025 1500 A – 1500 H 900 A 900 MHz900 B (–gepaart 900 G ) 900 A 900 B – 900 G GSM-R (gepaart) 1452 ,0 5 5 5 5 5 5 14925 ,50 55 55 55 145255 5,0 5 GSM5 -R 5 5 5 5 5 5 5 5 1492GSM,-R0 5 5 5 5 5 5 5 1,5 GHz 1 ,5 GHz 1400 MHz 1500 A – 1500 H 1500 A – 1500 H 990 1600MHz MHz 790 MHz 800 MHz (gepaart) 900 MHz (gepaart) 1,5 GHz 1452 ,0 1492,0 GSM-R (gepaart) 5 5 5 15005 A – 15005 H 5 5 5 5 5 5 5 5 5 5 5 11,5.8 GHz GHz 1452,0 1492,0 1500 A – 1500 H 1400 MHz 5 14005 MHz5 5 5 5 5 5 1600 MHz 1600 MHz 5 5 5 5 5 5 5 5 55 55 55 55 55 55 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 DECT 1400 MHz ,0 ,0 ,0 , 0 ,0 ,0 ,0 ,0 ,0 ,0 ,0 ,0 ,0 ,0 1600 MHz ,0 ,0 14001700 MHz MHz 1600 MHz

0 0 0 0 0 0 0 0 1,8 GHz 1710 , 1725 , 1,8 GHz 1710 1780 , 17251785 , 1805 , 1820 , 1780 1785 1805 1875 ,18201880 , 1875 1880 Befristet bis 2025 1800 A – 1800 I und zwei 5-MHz- Blöcke der Telefónica bis 2015Befristet befristet bis 20251800J 1800 A – 1800 I und zwei 5-MHzBefristet-Blöcke bis der 2025 Telefónica 1800bis 2015 A – befristet1800 I und zwei1800 5-MHzJ -Blöcke der Telefónica bis 2015Befristet befristet bis 20251800J 1800 A – 1800 I und zwei 5-MHz-Blöcke der Telefónica bis 2015 befristet 1800J 1,8 GHz 1710,0 1725,0 1780,0 1785,0 1805,0 1820,0 1875,0 1880,0 Befristet bis 2025 1800 A – 1800 I und zwei 5-MHz-Blöcke der Telefónica bis 2015 befristet 1800J Befristet bis 2025 1800 A – 1800 I und zwei 5-MHz-Blöcke der Telefónica bis 2015 befristet 1800J 1,8 GHz 1710 1725 1780 1785 1805 1820 1875 7001880 A AwardedDECT as specific blocks DECT 5Befristet5 bis 20255 5 18005 A – 18005 I und5 zwei 5-5MHz-Blöcke5 der5 Telefónica5 bis5 20155 befristet5 55 518005 J 5 5 5 5 5 5Befristet5 5 bis 520255 5 5 18005 5 A – 18005 5 I und5 5 zwei5 5-5MHz-Blöcke5 der5 Telefónica5 bis5 20155 befristet5 55 518005 J 5 5 DECT5 5 5 5 5 5 5 5 5 5 Deutsche5 5 5 Telekom5 5 5 5 5 5 Vodafone5 5 5 5 5 5 Telefónica5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Awarded as abstract DECT 1700 MHz 700 B – 700 F 1900 MHzvergaben 1700 MHz 5 5 5 5 5 5 5 5 5 517005 MHz5 5 5 5 1,8 GHz (gepaart) 5 5 5 51,8 GHz 5(gepaart) 5 5 5 5 51,8 GHz5 (gepaart5 ) 5 5 5 blocks 1900 MHz 1900 MHz 1700 MHz 1,8 GHz (gepaart) 700 A Konkret vergeben1900 MHz Deutsche Telekom Vodafone Telefónica 700700 B –A 700 F KonkretAbstrakt vergebenvergaben 700 A Konkret vergeben Deutsche Telekom Vodafone DeutscheTelefónica Telekom Vodafone Telefónica 700 B – 700700 F A AbstraktKonkret vergabenvergeben 700 B – 700 F Abstrakt vergaben Deutsche Telekom Vodafone Telefónica 700 B – 700 F Abstrakt vergaben RULINGS, ACTIVITIES AND PROCEEDINGS | TELECOMMUNICATIONS | 75

Frequency regulation aspects of the merger between Market regulation Telefónica and E-Plus Planned mergers or company acquisitions must be Conditions for access to the local loop examined by the Bundesnetzagentur through the In the reporting period, the topic of vectoring once prism of telecommunications law to ensure that a again dominated debate on the regulation of the distortion of competition in the relevant product and "last mile", or local loop. geographical market is not to be feared as a result of the companies' volume of spectrum and that efficient use In February 2015, as part of the periodic review process of spectrum can continue into the future. concerning the regulatory obligations imposed on Telekom Deutschland GmbH on the local loop access In 2014 the European Commission confirmed that the market, Telekom Deutschland GmbH submitted an merger between the mobile network operators application for the wider deployment of vectoring Telefónica Deutschland and E-Plus was in compliance technology. In its application, Telekom Deutschland with anti-trust law and approved the move. On GmbH is seeking exclusive rights to deploy vectoring 4 July 2014 the President's Chamber reached a decision technology, including near a main distribution frame. on the frequency regulation aspects. The President's This concerns some 40,000 street cabinets within a Chamber of the Bundesnetzagentur also examined the radius of 550m of all of its main distribution frames, of spectrum holdings by reference to the regulatory which there are almost 8,000. The rules governing the objectives and principles contained in the German deployment of VDSL vectoring outside of this radius Telecommunications Act. Particular attention was paid were determined in 2013 and 2014 on the basis of to securing fair competition, promoting markets with earlier decisions. sustainable competition, safeguarding user interests – especially those of the consumer – and ensuring Following extensive preliminary investigations, on 23 efficient, interference-free spectrum usage. The November 2015 the Bundesnetzagentur published a Bundesnetzagentur's decision stipulates the early draft decision on the conditions that will allow other return of spectrum in the 900 MHz and 1,800 MHz providers access to Telekom's local loop in the coming bands by Telefónica/E-Plus by 31 December 2015, years. Although the topic of vectoring in the vicinity closely timed to the re-award of the "GSM spectrum" of a main distribution frame is just one of a raft of (2015 auction), and requires that a subsequent investi- aspects covered by this comprehensive draft decision, gation is carried out into spectrum holdings with at the same time it is the part of the regulatory process respect to the allocation of frequencies following the that has garnered the most public attention. merger (in particular the re-award of spectrum in the 900 MHz and 1,800 MHz bands) once all the facts are The primary objective of the draft decision is to drive known. forward the build-out of broadband connectivity and prevent the use of vectoring technology from leading The post-merger company has since submitted an to the emergence of new monopolies. For the benefit of application for the joint use of the Telefónica and consumers, the principle of fair competition must E-Plus spectrum. Telefónica and E-Plus were granted continue to be safeguarded into the future. It is the requisite approval in a ruling dated 25 September essential that companies all find fair, dependable 2015. The company also undertook to return usage framework conditions in place when investing in rights on spectrum of 2 x 24.8 MHz (paired) in the 1,800 modern broadband networks. What this means is that MHz band earlier than first planned – effective on a no regulatory restrictions will be placed on companies regional basis as of 31 December 2015 and on a national rolling out optical fibre to the building. basis as of 30 June 2016. These spectrum usage rights were originally due to In addition, Telekom is to remain under a general expire on 31 December 2016 and were not re-purchased obligation to grant other providers access to the by Telefónica at this year's auction. unbundled local loop, or "bare copper wire". However, it could refuse to provide access to the local loop in the Telefónica reports to the Bundesnetzagentur on a direct vicinity of its main distribution cabinet, ie monthly basis regarding the status of the measures for within a radius of 550m, if its lines there use VDSL2 vacating its frequencies. It has already freed up the vectoring technology. In such cases, however, other above-mentioned frequencies on a regional basis in providers could deploy VDSL2 vectoring themselves compliance with the 31 December 2015 deadline. within this radius and access the unbundled local loop as necessary, but only if their DSL coverage in a 76 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

particular area is greater than Telekom's. In this case, Under the new order, Telekom Deutschland GmbH the respective company would have to submit a must continue to ensure non-discriminatory bitstream binding rollout plan by the end of May 2016. access for other providers and keep standard agree- ments, or reference offers, on file for this purpose. This Telekom is to be required to offer other providers a obligation to grant access extends to both the layer 2 virtual unbundled local access product that closely and layer 3 bit streams. replicates the characteristics of the unbundled local loop in place of the access to unbundled local loops that The prohibition of discrimination has been extended will no longer be available everywhere in future. A to include the monitoring of key performance indica- wholesale virtual unbundled local access product such tors, in particular those relating to provisioning and as this would give other providers a launch pad for fault clearance, in order to ensure equality with respect rolling out their own broadband network. Like to bitstream access and transparency for third parties. Telekom, they, too, would be able to expand their networks into the vicinity of the main distribution The rates will be uniformly regulated in accordance frames with optical fibre to end customers. with the provisions on anti-competitive conduct (section 28 of the Telecommunications Act), with rates The draft decision also sets out differentiated rules for layer 2 bitstream access additionally subject to the regarding the financial compensation that Telekom ex ante authorisation requirement due to the impor- must pay to other providers if they can no longer gain tant role this wholesale product will play in the future. access to unbundled local loops because vectoring has In contrast, the rates for layer 3 bitstream access are been rolled out to the vicinity of a main distribution subject to ex post price regulation. This differentiated frame. Under the new provisions, Telekom must obtain approach ensures that there is or remains room for approval of the charges it levies for access to the copper manoeuvre in terms of price-setting for innovative local loop and the associated virtual unbundled local risk-sharing models whilst delivering sufficient access product in line with the benchmark for costs for planning certainty for all market participants regar- efficient service provision. The charges for the optical ding important layer 2 rates. As a result, the price- fibre local loop are to continue to be based on ex post setting for bitstream access will be consistent with the price regulation in accordance with the standards for overall wholesale pricing structure. anti-competitive conduct. Furthermore, the decision picks up on the fact that Review of the reference offer for access to the local loop Telekom was exempted from the regulation on layer 3 The Bundesnetzagentur is currently reviewing the bitstream access in several towns and cities. The draft revised reference offer submitted by Telekom requirement to provide access to this wholesale Deutschland GmbH with respect to access to the local product in these towns and cities does not apply loop. wherever a layer 2 bitstream product is available.

Particular attention is being paid to various separate Review of the reference offer for layer 2 bitstream points including the contract terms and conditions as access well as the planning, ordering and provisioning Telekom Deutschland GmbH submitted a draft process for local loop access. The focus is also on fault reference offer in connection with the layer 2 bit clearance rules, the specific structure of an effective stream on 5 February 2015. This contractual offer incentive system for contract-compliant local loop did not meet the legal requirement for equal opportu- provisioning and fault clearance using service level nity, timeliness and equity. As a result, following agreements (SLA) and key performance indicators in-depth discussions with the market participants, the (KPI), rules on contractual penalties and lump-sum Ruling Chamber issued an initial partial decision dated damages, available access to (planning) information for 17 August 2015 containing extensive remedial require- the purpose of accessing local loops, and questions ments. regarding physical access, or "collocation". These related primarily to the start and scope of Conditions for bitstream access service, the ordering and provisioning process for DSL On 28 October 2015, prompted by an upcoming lines, the quality of transport and additional provisions periodic review, the Bundesnetzagentur announced regarding handover accesses and transport. the revised regulatory order for bitstream access. RULINGS, ACTIVITIES AND PROCEEDINGS | TELECOMMUNICATIONS | 77

In response, on 28 September 2015 Telekom Deutsch- Reference offers for PSTN and IP land GmbH submitted a revised version of the draft fixed-line interconnection reference offer, which Ruling Chamber 3 is currently In the second partial decision dated 17 December 2015, examining to determine the extent to which Telekom once the consolidation process was implemented and has implemented the remedial requirements from the the European Commission had issued no comments initial partial decision and whether it has done so with respect to the draft decision discussed, Ruling adequately. If it has failed to do so, the Ruling Chamber Chamber 3 concluded its review of Telekom Deutsch- will implement the necessary changes itself and land GmbH's reference offers for fixed-line PSTN and furnish the updated reference offer with a minimum IP interconnection. In this review, it made various term during which Telekom is bound by the contrac- additional changes to the revised agreements submit- tual offer. ted by Telekom on the basis of the initial partial decision from December 2014, so as to ensure that the Final approvals for fixed-line interconnection and reference offers complied with the legal requirement mobile termination for equal opportunity, equity and timeliness of service On 1 April 2015, the Bundesnetzagentur definitively provision. Major aspects included assuring complete approved the new fixed-line interconnection rates for control by access seekers over their own networks and Telekom Deutschland GmbH, as well as the fixed-line service offerings, and minimising the burden on termination rates for 55 other access network operators smaller carriers in connection with the migration to IP backdated to 1 December 2014 following resolutions interconnection. dated 17/19 August 2015. Mobile call termination rates were also applied retroactively as of 1 December 2014 The Bundesnetzagentur is one of the first European on the basis of decisions dated 24 April 2015. regulatory authorities to set out the specific conditions applicable to IP interconnection in a published The respective rates had initially only been provision- interconnection reference offer. ally approved because of serious concerns in all cases on the part of the European Commission regarding the Conditions for VHF transmission rates proposed by the Bundesnetzagentur. This was due On 17 August 2015, Ruling Chamber 3 approved and to the lack of implementation of "pure LRIC cost prescribed various rates to be levied by Media Broad- modelling" proposed in the recommendation on cast GmbH for VHF end-user and wholesale services. termination, as a result of which the Commission had This laid the rates-based groundwork for opening up initiated an in-depth examination process. access to the VHF transmission market to alternative network providers. Upon conclusion of this process, the European Commission asked the Bundesnetzagentur to amend or The regulated rates aim to stimulate competition on retract its decisions and further reduce the fixed-line the market for VHF transmission services from early and mobile call termination rates. 2016. Media Broadcast has considerable market power on the respective markets. In view of this, since the end However, in order to maintain consistency with its of 2014 the company has been obliged to grant other previous decisions, the Bundesnetzagentur stood by its companies – ie those who wish to offer VHF transmis- proven method of calculating fixed-line and mobile sion services to radio broadcasters in future –access to call termination rates on the basis of the costs of the VHF antenna systems at regulated rates and to have efficient service provision. these rates approved beforehand in line with the benchmark for costs for efficient service provision.

Ruling Chamber 3 has reviewed the revised draft reference offer submitted by Media Broadcast for the joint use of analogue VHF antenna systems.

Prior to this, the Bundesnetzagentur had also issued a partial decision on 25 June 2015 requiring extensive changes to the draft agreement initially submitted by Media Broadcast. 78 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

These changes included the introduction of a verifica- Carrier leased line rate approval tion process in connection with various disputes Telekom Deutschland GmbH is obliged on the basis of a between the contract parties, the incorporation of a regulatory order to grant access to the terminating commitment to ensuring continued operation to the segments of leased lines with bandwidths of 2 MBit/s benefit of radio broadcasters in the event of provision- to 155 MBit/s (carrier leased lines) including necessary ing delays, the deletion of a clause on automatic collocation and auxiliary services. The access rates it contract termination in the event of the abandonment levies are subject to approval. of ownership and functional ownership of the VHF antenna system, and the revision of the preliminary Leased lines can be realised using different technolo- application, planning and ordering process. gies (synchronous digital hierarchy or Ethernet). Various provisioning and monthly charges are in place Approval of new local loop, interconnection and mobile for leased lines, graded according to bandwidths. termination rates In the reporting period, the Ruling Chamber approved In preliminary resolutions dated 30 June 2015 and new monthly local loop charges for specific periods of 22 July 2015, the respective rates were given prelimin- time between 8 February 1999 and 31 March 2009 in ary approval as of 1 July 2015. Final approval will be each case based on the relationship between Telekom issued once the community-scale consolidation and various requesting parties. process has been implemented.

The latter had successfully appealed against numerous Reference offer for leased lines rates originally approved for these time frames. In Telekom Deutschland GmbH was directed to publish a addition, new interconnection call charges for the reference offer for access to the terminating segments period from 1 December 2008 to 30 June 2011 and of leased lines. mobile termination rates for the period from 1 Decem- ber 2007 to 31 March 2009 were approved in specific Telekom Deutschland GmbH complied with the individual circumstances. deadline by submitting and publishing a reference offer containing explanations regarding the imple- These decisions closed gaps in rates approvals that had mentation of the decision. arisen between Telekom and other providers, in some cases following lengthy legal battles as a result of court The major areas of dispute related to the length of rulings lifting the approvals of local loop, interconnec- provisioning deadlines, the quality of leased lines with tion and mobile termination rates made at the time. In respect to propagation delays, and the issue of whether consideration of settlement arrangements that have it is permissible to make lump-sum fees for damages been implemented between the companies, the dependent on planning arrangements. original rate approvals were re-submitted by the relevant parties for new approval. The Ruling Chamber The reference offer was reviewed by the Ruling accommodated these requests. Chamber and furnished with a minimum term expiring on 31 December 2016. Furthermore, the Ruling Chamber determined that certain settlement sums, in connection with which the Provision of subscriber data companies concerned had agreed to suspend their Ruling Chamber 2 reviewed several, largely identical, claims for payment in return for a declaration to forego complaints from publishers claiming that their partner or abandon action, were not subject to approval. Since company Deutsche Telekom Medien GmbH (DeTeMe- the decisions entered into force, the companies have dien) was billing them inflated costs for subscriber data withdrawn all pending appeals against decisions on in connection with joint publications of subscriber local loop, interconnection and mobile termination directories. rates and put an end to many years of legal wrangling over the "right amount" of key rates for wholesale Following an in-depth examination by the Ruling services. Chamber, no formal proceedings were opened, on the grounds that matters relating to the amount of remuneration paid within the joint publishing company fall under civil law, for which the regulatory authority is not responsible. RULINGS, ACTIVITIES AND PROCEEDINGS | TELECOMMUNICATIONS | 79

Dispute resolution and anti-competitive conduct Creation of the Digitisation and Intercon- On the basis of a request filed by 1&1 Telecom GmbH nectivity, Internet Platforms Task Force (1&1), Ruling Chamber 2 reviewed the "MagentaZuhau- se Hybrid" lines sold by Telekom Deutschland GmbH Digitisation and interconnectivity continue to impact on a regional basis and, since March 2015, on a national all areas of modern society with unrelenting dyna- basis. These lines offer bundled fixed-line and mobile mism. They touch on all areas of life, from communi- technology via a single router. cation with family and friends, to managing building technology and the smart home, private consumption 1&1 asserted that the service provider obligation under (online platforms), and the learning and working mobile licensing law required Telekom to provide a environment (local learning and working). Social and wholesale product that allowed its hybrid products to political exchanges are held directly using digital be replicated. Furthermore, 1&1 maintained that means of communication, and often do not involve Telekom's conduct was an abusive exploitation of its classic media forms. market power, because, without a hybrid-capable wholesale product, 1&1 could not compete with What is more, the digital transformation of the Telekom due to significant bandwidth disadvantages. economy means that national and international businesses are faced with making significant structural The investigations established that there are at present changes. Established value chains are becoming more no grounds for intervention on the basis of anti- flexible and, in many cases, accessible to new partici- competitive conduct as defined in the Telecommuni- pants as a result of the collection, storage and proces- cations Act. In a ruling dated 30 October 2015, the sing of data, interconnection processes, and the Ruling Chamber also dismissed the requests for dispute increasing automation of production processes. resolution as unfounded at the very least, because the The most essential prerequisite for digitisation in service provider obligation under licensing law relates Germany is powerful information and communication solely to mobile communications and not to fixed-line infrastructure nationwide that meets the qualitative products. demands of industry and thus allows industrial production and services to be digitised and intercon- Ex post price regulation nected efficiently. The aim is to support the German In a set of preliminary investigations, Ruling Chamber government's Smart Networks initiative and identify 2 examined a raft of regional promotional offers from measures that can promote the digitisation process in Telekom Deutschland GmbH in connection with its the various sectors. The Smart Networks initiative "MagentaZuhause" broadband line products. The encompasses areas including energy (smart metering, limited-time-only offers included a price reduction of smart grids), transport (public rail transport and €5 in certain towns and cities compared with the connected/self-driving cars in the private transport standard tariff. The preliminary investigations were sector) and health care. carried out at the request of various other providers. The Task Force is also working on a method of moni- The investigations established that these offers did not toring internet platforms with the aim of obtaining an significantly impair competitive conditions for rival overview of applications used by over-the-top (OTT) companies. providers in Germany and their impact on the econo- my. It is currently gathering information on sources, analysing and initiating suitable studies, and generat- ing other information that might be necessary.

In addition, the Task Force reviews aspects affecting competition between internet platforms in order to identify potential factors that may distort competition. It also considers new business models that emerge from the collection, linking, analysis and use of non- standardised big data volumes. In this context, the objective is to analyse the implications for the economy and for competition policy of business models that are based on data collections of this nature. Particular attention is paid to data protection and data security 80 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

with respect to internet-specific dangers and IT establishing more transparency in connection with the security in complex environments. broadband rollout.

Infrastructure atlas With respect to transparency requirements, including at European level, the Bundesnetzagentur's infrastruc- The infrastructure atlas has been maintained and ture atlas sets the bar high for national standards and updated by the Bundesnetzagentur since 2009. It has become an established tool for promoting the contains data on infrastructure that can be used for broadband rollout. broadband activities, such as empty cable ducts, optical fibre cable, distribution boxes and masts. This data has been accessible via a web GIS application since 2012. Numbering issues in M2M communication Authorised users are shown a map containing infra- structure data and contact details of the owner. Machine-to-machine (M2M) communication refers to the mainly automated exchange of information Anyone who can furnish evidence of involvement in a between technical equipment and may be wireless or specific broadband expansion project can use the non-wireless. It is used primarily to automate industri- infrastructure atlas. In the interests of using existing al processes but is also found in the automotive infrastructure more efficiently and accelerating the industry, consumer goods/households, public infra- broadband build-out, this service adds much-needed structures and transport and logistics. transparency in order to avoid duplicate investments. Many M2M applications use mobile communication The number of requests for infrastructure atlas networks, which means they need mobile call numbers information again increased slightly in 2015 to a total and IMSI (International Mobile Subscriber Identity), of 1,657 requests compared with 1,607 in 2014. 51% of the latter being necessary to assign technical addresses requests were filed by companies, followed by planning to mobile devices. The Bundesnetzagentur provides offices at 21% and the federal states at 20%. The these numbers. Some countries have introduced remainder related to requests from local and regional special number ranges for M2M communication. So far authorities. this has not been necessary in Germany as sufficient mobile numbers are available. However, a dedicated With a view to improving the infrastructure atlas new number range can be created if required. database even further, in 2015 the Bundesnetzagentur approached specific additional companies, in particu- Most IMSI numbers are allocated to mobile network lar regional energy providers and telecommunication operators in accordance with the existing allocation network operators. Some 500 companies were reviewed rules. So far about one quarter of the one hundred IMSI periodically. Looking ahead, steps to improve the blocks available have been assigned. Various market quality of the data in cooperation with the infrastruc- players, however, are demanding that the assignment ture owners involved will take on increasing signifi- entitlement be extended, which could lead to a cance. Intensifying the involvement of various shortage given the small amount of number blocks. industries so as to offer a relevant – ie as extensive and reliable as possible – database continues to be a On the basis of a market survey carried out in 2014, challenge. Against this backdrop, the number of the Bundesnetzagentur drew up a draft numbering companies contributing data increased substantially plan and supporting documentation. The draft num- year on year from around 170 to 991 as of bering plan allows mobile virtual network operators 31 December 2015. (MVNO) to also request assignment of an IMSI block. An extension of the eligibility to apply so as to include Thanks to feedback from users, the technology behind M2M users (such as automotive manufacturers, energy the infrastructure atlas was also improved in 2015 and, providers) does not appear necessary at present. to give one example, now uses more recent, up-to-date background maps. One further issue in connection with M2M communi- cation is the international use of the mobile and IMSI In 2016 the EU Broadband Cost Reduction Directive is numbers deployed in M2M. Products with integrated due to be transposed into national law. The M2M technology (including a SIM card or a SIM EU directive considers the infrastructure atlas to be module) are often produced for the global market. With integral to a single central information point on the the exception of international roaming, so far it has build-out of digital networks and a key condition for generally not been permitted to use German numbers RULINGS, ACTIVITIES AND PROCEEDINGS | TELECOMMUNICATIONS | 81

outside the German territory or to use foreign numbers through the prism of various legal provisions on the in Germany. The new draft support documentation granting of aid. now contains explicit provisions for allowing the general international use of IMSIs in M2M communi- At the beginning of 2015, the Bundesnetzagentur cation. After assessing the comments received in published comments that had been discussed regard- response to the drafts, the numbering plan and the ing the screening framework and criteria in connec- supporting documents – including changes where tion with the processes in the General Block Exemption necessary – are to enter into force. Following this, the Regulation (AGVO). In July 2015, broadband aid Bundesnetzagentur plans to pass similar regulation on regulations were modified at federal level as a result of the international use of mobile numbers. the publication of the regulatory framework for next-generation access networks (NGA), following its approval by the European Commission. The NGA Broadband expansion aid regulatory framework supersedes the federal guideli- nes on ducts (BRLR). In December 2015 the Bundes- While in the past the expansion plan has concentrated netzagentur discussed comments on the screening on rolling out a basic level of broadband coverage framework and criteria used in the processes in the across Germany, in future the focus will be on provid- NGA framework regulation. ing high-speed broadband lines. The federal government's broadband target is to achieve nation- wide coverage with broadband connections of at least 50 Mbit/s by 2018.

Important factors in market-driven investment choices in high-speed networks comprise the technology deployed and the population density of the regions involved, as well as customer demand and willingness to pay. State aid can facilitate expansion of the high- speed networks even in those regions whose potential development cannot be brought about solely by industry-led investments.

Importantly, care must be taken that aid schemes do not produce ineffective network structures and that any distortion of competition is avoided. To this end, any networks with state funding must be organised in such a way that they are future-proof and open to competition so that private investment is not preven- ted or hindered by state aid. This means that third parties must also be granted access to the part-state funded infrastructure so that consumers in those regions have a choice of suppliers.

In addition to forming the basis of the European Commission's aid guidelines, these principles are also an integral part of the relevant national regulatory frameworks of the German government and the federal states. The Bundesnetzagentur gives its opinion as part of an evaluation of the access terms and conditions, including the prices, in the agreements between the public office granting the aid and the network operator receiving the aid. This is intended to secure effective, open network access for third-party suppliers in the regions involved. Overall in 2015, the Bundesnetzagentur evaluated almost 250 agreements

82 | BUNDESNETZAGENTUR | JAHRESBERICHT 2015

BUNDESNETZAGENTUR | JAHRESBERICHT 2015 82 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Name-based requests made by authorised bodies and resulting enquiries made with telecommunications service providers millionName -based requests made by authorised bodies and resulting enquiries made with telecommunications service providers million 29.03 27.80 26.48 26.96 26.67 26.38 25.19 21.37 29.03 27.80 26.48 26.96 26.67 26.38 25.19 21.37

0.22 0.26 0.26 0.24 0.23 0.23 0.22 0.22

0.22 0.26 0.26 0.24 0.23 0.23 0.22 0.22 2008 2009 2010 2011 2012 2013 2014 2015

2008 2009 2010 2011 2012 2013 2014 2015

Requests by authorised bodies Enquiries with telecoms service providers

Requests by authorised bodies Enquiries with telecoms service providers

Public safety

Public safety AutomatedPublic safety information procedure as per section 112 of perform their statutory tasks. The Bundesnetzagentur

the Telecommunications Act has an automated process for forwarding any queries to AutomatedAutomated informationinformation procedureprocedure asas per per section section 112 112 of of statutoryperform tasks.their statutoryThe Bundesnetzagentur tasks. The Bundesnetzagentur has an The information procedure as provided for by the telecommunications service providers and collects thethe TelecommunicationsTelecommunications ActAct automatedhas an automated process for process forwarding for forwarding any queries any to queries the to section 112 of the Telecommunications Act makes a their responses. There are currently 107 authorities TheThe informationinformation procedure as providedprovided forfor by by section telecommunicationsthe telecommunications service service providers providers and collects and collects significant contribution to ensuring public safety in registered as authorised bodies and 116 112section of the 112 Telecommunications of the Telecommunications Act makes Act a makessignificant a theirtheir responses. responses. There There are are currently currently 107 107 authorities authorities contributionGermany. Legally to ensuring authorised public bodies, safety mostly in Germany. public registeredtelecommunications as authorised undertakings bodies and 116 contribute telecommuni - significant contribution to ensuring public safety in registered as authorised bodies and 116 Legallysafety and authorised criminal bodies, prosecution mostly authorities, public safety may and cationsinformation. undertakings contribute information. Germany. Legally authorised bodies, mostly public telecommunications undertakings contribute criminalrequest specific prosecution subscriber authorities, data such may as request their name,specific safety and criminal prosecution authorities, may information. subscriberaddress and data telephone such as theirnumber name, from address the and request specific subscriber data such as their name, telephoneBundesnetzagentur number from if the the data Bundesnetzagentur is necessary for them if the to address and telephone number from the data is necessary for them to perform their Bundesnetzagentur if the data is necessary for them to

Number-based requests made by authorised bodies and resulting enquiries made with

telecommunications service providers millionNumber -based requests made by authorised bodies and resulting enquiries made with telecommunications service providers

million

Requests by authorised bodies Enquiries with telecoms service providers

Requests by authorised bodies Enquiries with telecoms service providers

9.64 8.43 8.45 8.63 6.96 6.96 9.64 5.25 5.06 8.43 8.45 8.63 6.96 6.96 7.40 5.25 5.06 6.65 6.72 6.70 5.78 7.40 3.94 4.22 5.60 6.65 6.72 6.70 5.78 3.94 4.22 5.60 2008 2009 2010 2011 2012 2013 2014 2015

2008 2009 2010 2011 2012 2013 2014 2015 RULINGS, ACTIVITIES AND PROCEEDINGS | TELECOMMUNICATIONS | 83

In 2015, the Bundesnetzagentur received a total of 7.62 New technologies for lawful interception and informati- million requests for information. This resulted in 34.83 on provision million enquiries overall with telecommunications The Bundesnetzagentur's activities in connection with undertakings in the same period. the technical implementation of lawful interception measures make an important contribution to maintai- The Bundesnetzagentur answers a customer name ning public safety. request by providing to the authorised bodies the call number(s) or the information that no call number is Following a transition period, the requirement for a associated with the relevant name at the residence secure electronic interface pursuant to section 113 of provided. Customer name requests are passed to all the Telecommunications Act was made mandatory for telecommunications service providers participating in some 30 companies with effect from 1 July 2014. The the process because it is not known which provider a Bundesnetzagentur is supervising the implementation customer has received a number from or even how of the requirements, which were determined both on many numbers. Consequently, even a low number of the basis of ETSI Specification TS 102 657 and, in requests for customer names (0.22 million) generate a conjunction with companies, authorised bodies and disproportionately large number of queries that have manufacturers, in the Technical Directive setting forth to be forwarded to telecommunications undertakings the requirements of the Ordinance concerning the (25.19 million). Technical and Organisational Implementation of Measures for the Interception of Telecommunications The Bundesnetzagentur forwards a call number (TR TKÜV). request to the authorised bodies and includes the subscriber name, address and network operator/service The WLAN-based internet service (eg Hotspot service) provider associated with the call number required. Call was included in the lawful interception obligation at number requests must be passed on to significantly the start of 2015. This obligation affects companies that fewer telecommunications undertakings, therefore the are connected with more than ten thousand subscri- number of queries corresponds by and large to the bers or other parties enjoying the right of use as set out number of incoming requests. The use of filter in section 3 of the Telecommunications Interception mechanisms meant that only 9.64 million queries were Ordinance (TKÜV). It is the task of the Bundesnetz- forwarded to telecommunications undertakings in agentur to monitor the technical systems and organi- 2015 from the total 7.4 million call number requests sational measures implemented by the parties covered received by security authorities. by the obligation. Ideally, interception in this telecom- munications sector will be possible by the authorised Technical safeguards as per section 109 of the Telecom- bodies from 2016 onwards. munications Act The key objectives of section 109 of the Telecommuni- Storage requirements and maximum retention periods cations Act are to protect the privacy of telecommuni- for traffic data (data retention) cations and personal data, protect systems against With the introduction of a mandatory data retention faults, and manage the risks to the security of telecom- law in Germany, the Bundesnetzagentur is responsible munications networks and services. for developing the requirements catalogue as per section 113f of the Telecommunications Act in In 2015, the Bundesnetzagentur examined 56 new and consultation with the Federal Office for Information 119 revised security concepts from operators of public Security and the Federal Commissioner for Data telecommunications networks and services for Protection and Freedom of Information. The catalogue compliance with the provisions of section 109 of the sets out the requirements applicable to technical Telecommunications Act. Its activities included precautions intended to uphold the high standards of performing 95 spot checks on the parties subject to this data security and data quality. In addition to develop- obligation. ing the catalogue, the Bundesnetzagentur is also responsible for monitoring the requirements set forth The national procedure for notifying security violat- therein on an ongoing basis and for updating the ions in accordance with section 109(5) of the Telecom- catalogue without delay as and when required. munications Act is set out in the implementation concept developed by the Bundesnetzagentur. In 2015 the Bundesnetzagentur was made aware of 19 security incidents, 12 of which were classed as security violat- ions. 84 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Secure electronic transactions for consu- Technical regulation mers, business and authorities Technical Telecommunications Regulation Committee The Bundesnetzagentur is the authority responsible for The Technical Telecommunications Regulation implementing the successor to the Electronic Signa- Committee (ATRT) is an independent advisory tures Act, the EU Regulation on electronic identifica- committee to the Bundesnetzagentur. It comprises tion and trust services for electronic transactions in representatives of network operators, service providers, the internal market (eIDAS), on a national basis. The professional bodies and user associations, as well as eIDAS Regulation was adopted in all 28 EU member consumers themselves. states at the end of 2014 and will apply from mid-2016 onwards with the repeal of the Electronic Signatures The Committee's activities in 2015 primarily focussed Act. on the migration of analogue and ISDN lines to IP lines. The aim is to make this transition transparent It is a milestone on the European Union's Digital and, as far as possible, free from technical hitches for Agenda, which aims to create a digital single market for end customers, private and commercial users alike. secure, cross-border information and telecommunica- tion technologies and for electronic transactions. The Mobile network standardisation into the Digital Agenda delivers the legal framework required 5th generation (IMT-2020) to safeguard the security and interoperability of the The standardisation of 5G is being handled at national necessary mechanisms and services. level by the German Institute for Standardisation (DIN) and the German Commission for Electrical, Electronic In addition to qualified electronic signatures and and Information Technologies of DIN and VDE (DKE), electronic time stamps, the eIDAS Regulation expands and at European level by the European Telecommuni- the existing range of trust services to include the cations Standards Institute (ETSI) and the European following: an electronic seal for use by legal persons Conference of Postal and Telecommunications such as companies and authorities in place of a Administrations (CEPT). Globally, 5G standardisation signature, electronic registered delivery services to activities are primarily being dealt with by the ensure secure communication, electronic storage International Telecommunication Union (ITU) and by services, and website authentication services that the 3rd Generation Partnership Project (3GPP). provide reliable information about the author of a website. The aim is to allow authorities and businesses The key aspects of the development of the fifth- to introduce faster, paper-free processes and save costs. generation mobile standard were set out by the ITU In particular, an electronic seal represents a significant Radiocommunication Sector between 2012 and 2015 leap forward in this respect. with the Bundesnetzagentur's involvement. These included a "vision" of 5G by 2030, the specification of The market for qualified electronic signatures is also technical performance standards, and the adoption of a changing as a result of the eIDAS Regulation and will time line and plan of work up to 2020. The see server-based signature and verification services Bundesnetzagentur's role in the international groups become permissible. The intention is to allow users to (ITU-R, ETSI, 3GPP) is to provide the necessary sign electronically or have a provider verify that an regulatory frameworks. electronic signature is correct without the need for special equipment (such as a card reader, smart card or special software).

The Bundesnetzagentur has prepared for the evolution taking place in this area by playing an active role in shaping the legal framework of the eIDAS Regulation and making preparations for its national rollout.

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Industry 4.0 The Bundesnetzagentur also contributed to the work The Internet of Things refers to the digitisation of all of the committees of national (DIN/DKE) and Euro- areas of life. This development is being driven by the pean (CENELEC and ETSI) standardisation organisa- industry 4.0 platform under the auspices of the Federal tions. Its activities included drawing up application Ministry for Economic Affairs and Energy and the scenarios for the communication of industrial applica- Federal Ministry of Education and Research. Together tions and specifying security requirements in respect with research institutes and the German manufactur- of communication solutions in industrial value chains. ing sector, the Bundesnetzagentur has helped to forge the platform and assisted with updating the industry 4.0 roadmap. In addition, in close cooperation with the Federal Ministry for Economic Affairs and Energy, along with other partners, the Bundesnetzagentur supports standardisation activities with the intention of incorporating relevant core elements into internati- onal standards.

Auction of spectrum for wireless internet nationwide High-speed wireless internet even in rural areas was one of the goals of the spectrum auction for mobile broadband access in June 2015. The auction generated proceeds of €5 billion, a substantial portion of which is to be invested in the network expansion.

In June 2015, the Bundesnetzagentur for the fourth The exploitation rights are normally granted for a time auctioned off mobile broadband spectrum. period of around 15 years. The planning certainty this Without the new frequencies that were made available provides is designed to encourage companies to invest via the auction, it will be extremely difficult to handle swiftly in rolling out the network across Germany. rapidly growing data volumes. Wireless data connecti- Telefónica pays €1.2bn for its exploitation rights, vity is taking on increasing significance as it will allow Deutsche Telekom pays €1.8bn, and Vodafone €2.1bn. A smaller towns and rural areas to be supplied with signification portion of the proceeds are to be dis- high-speed internet, making them more attractive as a tributed at federal and state level to be used to ensure base for companies. blanket broadband coverage.

After 16 days of auction in Mainz, the three participa- ting network operators Vodafone, Telekom and Telefónica successfully purchased frequencies amoun- ting to 270 MHz. The spectrum in the 700 MHz, 900 MHz, 1,500 MHz and 1,800 MHz frequency bands was auctioned for some €5bn.

Demand was particularly high for spectrum in the 900 and 1,800 MHz bands, which are already used for conventional mobile communications and for which the licences expire at the end of 2016. The 700 MHz band that became available for mobile communications as part of the migration of terrestrial digital broad- casting from DVB-T (Digital Video Broadcasting – Ter- restrial) to DVB-T2 was also auctioned off. 86 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

netzagentur provided a co-chair for each of the two International cooperation working groups for Next Generation Networks and The need for an overhaul of Regulatory Accounting and was additionally represen- ted by experts on all nine working groups to provide the legal framework for the content-related support and contribute their extensive telecommunications sector experience. in the European Union that In addition to BEREC, which was established on the basis of an EU regulation, the European regulatory was already becoming ap- authorities formed the Independent Regulators Group (IRG) back in 1997, which, as an organisation under parent in 2014 picked up Belgian law, has had legal personality since 2008 and pace in 2015 and increasingly maintains its own office and conference facilities available in Brussels. The IRG enables a closer working became the main focus of relationship between the regulatory authorities and gives them a discussion platform for those issues that international committee fall outside of BEREC's area of responsibility. work. Lastly, the Bundesnetzagentur is also a member of the Network of Economic Regulators established by the Organisation for Economic Co-operation and Develop- ment (OECD). This committee is an opportunity for the regulatory authorities from a range of sectors, inclu- ding telecommunications, to discuss regulatory topics that extend beyond their respective industries. This includes, for example, a comparison of regulatory systems at international level.

BEREC Vice Chair in 2015/BEREC Chair in 2016/IRG Chair in 2016 BEREC is represented externally by a Chair, who is elected for one year at a time by the members, and four Vice Chairs. The Vice President of the Bundesnetzagen- tur, Dr Wilhelm Eschweiler, was the BEREC Vice Chair for 2015. In 2016, Dr Eschweiler executes the duties of Chair of BEREC. In parallel, the representatives of the IRG member states elected Dr Eschweiler as Chair of Committee work the IRG in 2016. Internationally, the main focus of committee work was provided by the Body of European Regulators for As BEREC Vice Chair, Dr Eschweiler's duties in 2015 Electronic Communications (BEREC), on which the included staffing decisions concerning the BEREC Bundesnetzagentur and the relevant regulatory office. The office supports BEREC and the working authorities from other member states are represented. groups with their tasks and currently comprises 21 Pursuant to the directives on the European telecom- employees and four national experts who are seconded munications market, BEREC's input is required in to BEREC by their respective national regulatory various measures, such as advising the European authorities for a limited period of time. Commission or checking that planned decisions by national regulators in connection with the national Dr Eschweiler's responsibilities in this role also markets comply with EU directives and do not hamper included creating the BEREC work programme for the creation of a European single market. 2016. A draft version was presented to the public in October 2015 and approved by the BEREC Plenary In 2015, the outcome of the BEREC strategy for the Meeting in December 2015. years 2015 to 2017 was implemented. A decision was made to concentrate on nine working groups in order The focus of the 2016 work programme is on the to further enhance BEREC's efficiency. The Bundes- upcoming review of the existing European regulatory INTERNATIONAL COOPERATION | TELECOMMUNICATIONS | 87

framework (telecoms review) for electronic communi- Commission's position; however, in one case BEREC cation. BEREC will actively include the expertise and did not share the Commission's serious doubts and experience of European regulators in the upcoming asked the Commission to withdraw its reservations. legislative process in connection with various regulato- ry issues. These include access to next-generation Three of the opinions issued by BEREC in 2015 in networks (NGN/NGA), the role of new market partici- connection with Phase II investigations related to draft pants (known as over-the-top providers), consumer decisions notified by the Bundesnetzagentur. In all protection and universal service. three cases the European Commission raised serious doubts (pursuant to Art. 7a of Directive 2002/21/EC) As BEREC's Chair, in 2016 Dr Eschweiler will focus on about the cost accounting approach (cost of efficient setting the fundamental course for structuring the service provision) applied to the calculation of mobile future digital single market. During his period of termination rates (DE/2014/1666-1667) and fixed office, Dr Eschweiler will also be responsible for termination rates (DE/2014/1685, DE/2015/1718). following up on the implementation of the Telecoms However, the regulatory authorities still have room for Single Market Regulation with the areas of network manoeuvre when choosing a suitable cost accounting neutrality and international roaming. methodology.

Article 7/7a procedure Connected Continent In accordance with Articles 7 and 7a of Framework In 2013 the European Commission initiated a legisla- Directive 2002/21/EC, regulatory authorities in the tive package with the aim of creating a digital single telecommunications sector must notify the European market for telecommunications ("connected conti- Commission and other national regulatory authorities nent"). The package contains regulation on network of proposed regulatory measures. These bodies then neutrality and international roaming and was adopted have the opportunity to comment on whether the by the European Parliament on 27 October 2015. The planned measures comply with European law. In regulation includes measures intended to safeguard the particular, the European Commission may raise open internet from 30 April 2016 and requirements on serious doubts as to their compatibility with law and the phasing out of roaming fees charged on top of open a Phase II investigation. During a Phase II domestic mobile tariffs from mid-2017. investigation the regulatory authorities involved are prohibited from adopting the draft decisions submit- The network neutrality rules require all traffic ted. associated with the provision of internet access services to be treated equally and without discrimina- Instead, BEREC convenes an ad-hoc working group of tion. The regulation also provides for contractual experts from other regulatory authorities to draft a freedom for internet access providers and end users detailed opinion and statement on the criticised alike. measures. The European Commission is obliged to consider BEREC's position to the fullest extent possible Specialised services are only permitted in very specific when passing final comment on the regulatory circumstances. This will ensure that network capaci- measures concerned. ties are sufficient to allow them to be provided and offered in the first place and alongside existing internet If the Phase II procedure relates to a proposal for access services. Moreover, the intention is to prevent remedies (procedure pursuant to Article 7a of the specialised services from being used or offered as a Framework Directive), the European Commission can substitute for internet access services. Nor may they pass a recommendation asking the regulatory authori- impede the availability or general quality of internet ty concerned to either withdraw or adjust their access services. Providers of internet access services measure. Alternatively, the European Commission can may implement traffic management measures under withdraw its opinion of serious doubts. However, certain conditions. In particular, appropriate traffic European Commission recommendations of this management measures must be transparent, commen- nature are not binding on the national regulatory surate and non-discriminatory. authorities. Furthermore, a minimum degree of transparency is In 2015, the European Commission launched a Phase II required with respect to contracts for internet access. investigation in four cases; in each case BEREC drew up Contracts must contain details such as information on its opinions within the tightly prescribed time period. the effects of significant deviations from the speed For the most part it supported the European advertised. BEREC is required to publish guidelines on 88 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

network neutrality by 30 August 2016. These guidelines will closely supervise the next stages of the review are intended to ensure the consistent implementation process as part of its BEREC chairmanship in 2016. of the provisions by national regulatory authorities. The regulation assigns responsibility to the Bundes- International spectrum management netzagentur for monitoring and ensuring compliance Committee work in the European Conference with the rules on open internet access, enforcing the of Postal and Telecommunications Administrations transparency measures, and requiring the continuous (CEPT) availability of internet access services at a quality level The Bundesnetzagentur, together with the Federal that reflects advances in technology. It is also required Ministry of Transport and Digital Infrastructure, to publish annual reports on its monitoring activities represents national interests in connection with and findings and submit these reports to the European telecommunications matters on the Electronic Commission and BEREC. Communications Committee (ECC) of the European Conference of Postal and Telecommunications A central element of the new roaming rules is the Administrations (CEPT). In 2015 this related in part to phase-out of roaming surcharges from 15 June 2017. the harmonisation and implementation of broadband From 30 April 2016, operators have a transition period communication between aircraft and ground stations. during which they may levy end customers a fixed The primary aim is to offer passengers in-flight surcharge for roaming services on top of their domestic internet access. In addition, a decision was reached on tariffs. In addition, the operators can opt to apply a fair the harmonised use of mobile earth stations on land use policy that prevents users from incurring excessive and water operating with non-geostationary satellites roaming charges. Roaming providers who cannot offer based on the cross-border and liberal use of these earth their regulated roaming services on a profitable basis stations. Moreover, following detailed studies, spec- and would thus undermine their national pricing trum regulation for intelligent transportation systems model can apply to the national regulatory authority was revised and re-published. for approval to receive a top-up. In Germany, the Bundesnetzagentur is responsible for granting such Outcome of the World Radiocommunication Conference approvals. (WRC 15) The World Radiocommunication Conference (WRC) Digital Single Market/telecoms review adopts resolutions on amendments to the Radio Digital Single Market strategy Regulations necessary to reflect technical and political On 6 May 2015 the European Commission published its development and hence makes significant decisions on Digital Single Market strategy, which addresses not future international frequency management. only the "classic" telecommunications market but also numerous other areas such as e commerce, platform Preparatory work on the German stance is transparent regulation, audio-visual (media) services, copyright, and non-discriminatory and takes place under the consumer law, data protection and data security rules, stewardship of the Federal Ministry of Transport and as well as standardisation. The section on needs-based Digital Infrastructure. The Bundesnetzagentur was telecommunications regulation summarises core mandated with convening working parties for the elements which include a review of the European various standpoints. Participation in these working regulatory framework for electronic communications, parties was open to all stakeholders. the performance of an in-depth examination of the role of "over-the-top" services, and the revision of the From a German perspective, the outcome of the WRC legal framework for audio-visual media. 15 on the following points was of particular interest:

Telecoms review • Extension of the frequency band allocated to the A central component of the European Commission's Earth exploration-satellite service to allow use by Digital Single Market strategy planning comprises the high-resolution satellite systems overhaul of the existing legal framework for electronic • Allocation of additional frequencies to the non- communications (telecoms review). In this context, the navigational radiolocation service, including for use European Commission has positioned a number of by automotive radar systems issues with BEREC to be addressed. These concern an • Worldwide harmonisation of existing frequency evaluation of the existing legal framework on the basis bands (in particular 700 MHz and 1.5 GHz) for public of practical experience, as well as considerations on radio applications how it could be updated. BEREC issued an extensive response on 10 December 2015. The Bundesnetzagentur INTERNATIONAL COOPERATION | TELECOMMUNICATIONS | 89

• Recommendation on tuning ranges for the radio transportation systems. Furthermore, a recommenda- services of authorities and organisations concerned tion was drawn up regarding the demands on the with public safety technical capabilities of the next-generation mobile • Creation of an option for uninterruptible global standard (IMT-2020/5G) compared with IMT-Advanced flight tracking following the disappearance of (4G). Malaysian Airlines flight MH370 Lastly, stances were reviewed and/or established on the As a whole, Germany and Europe were able to assert co-existence of power-line telecommunications with their positions successfully. The outcome garnered was wired services and aeronautical radio services as well thus a major success and speaks for the continued use as threshold values for smart grid applications and of the established preparatory process. technologies including global or regional frequency bands used for the wireless charging of (mobile/ The WRC-15 also approved the agenda for the WRC 19 portable) devices and electric vehicles. and a review was opened in connection with a total of 30 GHz spectrum above the 24 GHz band for additional use by 5G applications. Furthermore, numerous topics were examined with the aim of allocating additional frequencies or making existing rules more flexible, for example for transport telematics systems, machine-to- machine communication and potential WLAN expansion areas.

Committee work in the European Union in the Radio Spectrum Policy Group (RSPG) and the Radio Spectrum Committee (RSC) Another field of activity in European Union bodies is work in the Radio Spectrum Policy Group (RSPG) and the Radio Spectrum Committee (RSC), where the Bundesnetzagentur and the Federal Ministry of Transport and Digital Infrastructure address aspects of European spectrum harmonisation. The RSPG drafted recommendations on the future use of the UHF radio band (470 to 790 MHz).

The RSC approved a decision to implement har- monised technical conditions for mobile/fixed communications networks within the 1,452 to 1,492 MHz frequency band. In addition, draft implementa- tion decisions were drawn up in particular with respect to the harmonisation of the 700 MHz band.

Committee work in the International Telecommunica- tion Union (ITU) As part of its work with the International Telecommu- nication Union, the Bundesnetzagentur represents Germany's interests in the working groups and conferences. In the radiocommunication sector (ITU-R), technical developments relating to radio technology are discussed, reports drawn up and recommendations made to the administrations.

With the Bundesnetzagentur's involvement, a new report was completed on broadband radio applications for radio services of authorities and organisations concerned with public safety, as well as on intelligent POST

Markets shaped by e-commerce Increasing digitisation characterised the postal market. Posi- tive changes including an increase in the range of services offered were seen in particular in the parcels market. The parcel operators responded to the dynamic growth in e commerce with guaranteed delivery periods, pre-arranged delivery times, nationwide services, standardisation and automation.

Inhalt

Market watch 92 Consumer protection and advice 100 Rulings, activities and proceedings 104 International cooperation 108 In 2015 the Bundesnetzagentur focused on the chang- ing conditions in the postal market. The letters market still faced the challenge of e substitution, with elec- tronic forms of communication increasingly replacing letter mail. The parcels market by contrast enjoyed significant growth through the boom in e commerce, with parcel services progressively taking over the lead role in the postal sector.

Process innovations led to an acceleration in compa- nies' transport chains, and it was possible to realise significant savings potential. Changes in consumers' buying habits and the rapid development of online retail platforms resulted in the expansion of e com- merce. The Bundesnetzagentur reacted to these developments and made them a focus of its activities and market monitoring.

The Bundesnetzagentur ensures the existence of fair competitive conditions and an efficient infrastructure across the country. In times of changing communica- tion habits postal services remain a key component of our infrastructure – especially in the context of a well-functioning community. Large volumes of messages are still being sent in written form. And the boom in parcel logistics shows just how much society and the economy based on a division of labour depend on the availability of high-quality postal services.

92 | BUNDESNETZAGENTUR | ANNUAL REPORT 92 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Market watch Competition Postal market Market watch and continuing digitisation The overall positive development in the postal sector Competition and continuing continued in the year under review. In 2014 revenues in The overall positive development in the postal sector the postal markets totalled €28.8bn, representing a digitisationpaved the way paved for thenew way for continued in the year under review. In 2014 revenues in year on year increase of 2.5%. services and optimised the postal markets totalled €28.8bn, representing a new services and optimised year on year increase of 2.5%. delivery in the parcels Of this, around €8.6bn were accounted for by licensed delivery in the parcels mar- letter services (letters up to 1,000g). Courier, express Of this, around €8.6bn were accounted for by licensed and parcel (CEP) services reported a significant ket.market. The Theletters letters market market was letter services (letters up to 1,000g). Courier, express increase, with revenues of approximately €19.3bn. was marked by overall and parcel (CEP) services reported a significant marked by overall stability. increase, with revenues of approximately €19.3bn. stability.

Revenues in the postal markets: 2014 €bn

0.8 1.1

Total revenue 28.8

Competitors* Deutsche Post Group* Courier, express and parcel (CEP) services Addressed newspapers and magazines * Licensed letter services

The postal markets were driven by the marked increasesincreases inin revenue andand volume recorded in the parcel sector. ThereThere waswas aa slightslight decreasedecrease inin 20142014 in in the the volumes reported for licensed letter services and addressed newspapernewspaper and and magazinemagazine delivery (part ofof the postal market), while revenues remained stable. Overall, though, furth furtherer growth growth is is anticipated anticipated in in 2015 2015 thanks toto thethe expectedexpected increaseincrease in in online online retail retail sales. sales.

Licensed letter services

Revenues and volumes RevenuesThe letters and market volumes saw no significant changes in 2014 Thecompared letters to market the previous saw no year.significant Licensed changes letter inmail 2014 comparedrevenues totalled to the previous €8.6bn, year. Licensed letter mail revenues totalled €8.6bn, a level that is not anticipated to change in 2015.

MARKET WATCH | POST | 93

MARKET WATCH | POST | 93

a level that is not anticipated to change in 2015. Revenues are expected to remain stable in 2015 at €4.8bn. Access mail revenues generated by the In 2014 letter volumes totalled 15.9bn items. The Access mail volumes in 2014 totalled approximately In 2014 letter volumes totalled 15.9bn items. The competitors remained unchanged at €0.1bn or around volume is expected to fall in 2015 to approximately 10.5bn items. These included approximately 2.6bn items volume is expected to fall in 2015 to approximately 2%, and similar revenues are anticipated for 2015. 15.7bn, continuing the moderate decline in letter delivered by the competitors to Deutsche Post AG. The 15.7bn, continuing the moderate decline in letter volumes seen in previous years. remaining items comprise mail delivered directly by bulk volumes seen in previous years. Access mail volumes in 2014 totalled approximately mailers to Deutsche Post AG and letter mail handled by a 10.5bn items. These included approximately 2.6bn combination of Deutsche Post Group companies. Volumes and revenue items delivered by the competitors to Deutsche Post AG. Billion items/€bn The remaining items comprise mail delivered directly End-to-end competition by bulk mailers to Deutsche Post AG and letter mail 16.4 16.7 16.3 The second pillar in the letters sector alongside access 16.1 handled by a combination of Deutsche Post Group 15.9 15.7 competition is end-to-end competition, where an companies. operator undertakes the entire process from collecting to

delivering mail. Provided they have the required delivery End-to-end competition network structure, operators can handle the whole postal The second pillar in the letters sector alongside access chain from collection to delivery to the recipient without competition is end-to-end competition, where an having to access Deutsche Post's network. operator undertakes the entire process from collecting 9.0 8.9 8.7 8.6 8.6 8.6 to delivering mail. Provided they have the required In 2014 Deutsche Post Group handled 3.4bn items end to delivery network structure, operators can handle the end, generating €2.9bn in revenue. A volume of around whole postal chain from collection to delivery to the 3.3bn items and similar revenue are expected in 2015. In recipient without having to access Deutsche Post's 2014 the competitors' end-to-end volumes totalled 2.0bn network. items, with end-to-end revenues of around €0.9bn. The

competitors anticipate a volume of approximately 2.1bn In 2014 Deutsche Post Group handled 3.4bn items end items in 2015, with a slight increase in revenues to around to end, generating €2.9bn in revenue. A volume of €1.0bn. All in all, the competitors expect to see a modest around 3.3bn items and similar revenue are expected 2015* increase in both volume and revenues, while Deutsche in 2015. In 2014 the competitors' end-to-end volumes Post Group anticipates another slight decline in volume totalled 2.0bn items, with end-to-end revenues of and a small increase in revenue in 2015. Revenue (€bn) Volume (billion items) around €0.9bn. The competitors anticipate a volume

*Forecast figure of approximately 2.1bn items in 2015, with a slight Market shares in the letters market increase in revenues to around €1.0bn. All in all, the Deutsche Post Group's dominant position in the licensed competitors expect to see a modest increase in both letter services sector remained unchanged in 2014. The volume and revenues, while Deutsche Post Group Group consolidated its position with a slight year-on-year anticipates another slight decline in volume and a increase in its market share by revenue to 87.8%. The small increase in revenue in 2015. other operators together held a market share of 12.2%,

Revenues generated by competitors to Deutsche Post showing a slight upward trend. Deutsche Post Group's Revenues generated by competitors to Deutsche Post Market shares in the letters market Group totalled €1.05bn in 2014 and are expected to be market share is forecast to fall to 87.3% in 2015. Group totalled €1.05bn in 2014 and are expected to be Deutsche Post Group's dominant position in the around €1.1bn in 2015. Revenues remained stable year on In terms of volume the competitors achieved a small around €1.1bn in 2015. Revenues remained stable year licensed letter services sector remained unchanged year, while mail volumes fell slightly. This is due to a increase in their share, as in previous years. Their share in on year, while mail volumes fell slightly. This is due to a in 2014. The Group consolidated its position with a small increase in the stamp prices charged by both 2014 at 12.5% is expected to increase further in 2015.. small increase in the stamp prices charged by both slight year-on-year increase in its market share by Deutsche Post Group and its competitors. Prices have Deutsche Post Group and its competitors. Prices have revenue to 87.8%. The other operators together held a therefore risen slightly across the market. therefore risen slightly across the market. market share of 12.2%, showing a slight upward trend. Deutsche Post Group's market share is forecast to fall to Network access Network access 87.3% in 2015. In the licensed letter services sector, the dominant In the licensed letter services sector, the dominant In terms of volume the competitors achieved a small operator is required to provide access to its incidental operator is required to provide access to its incidental increase in their share, as in previous years. Their share services. The majority of letter mail is handled under services. The majority of letter mail is handled under in 2014 at 12.5% is expected to increase further such access arrangements. Access mail revenues in- such access arrangements. Access mail revenues in 2015. creased slightly from €4.7bn in 2013 to €4.8bn in 2014. increased slightly from €4.7bn in 2013 to €4.8bn in 2014. Revenues are expected to remain stable in 2015 at €4.8bn. Access mail revenues generated by the competitors remained unchanged at €0.1bn or around 2%, and similar revenues are anticipated for 2015.

94 | | BUNDESNETZAGENTURBUNDESNETZAGENTUR | | ANNUAL ANNUAL REPORT 2015

94 | BUNDESNETZAGENTUR | ANNUAL REPORT

Market shares shares in in the the licensed licensed letter letter services services sector sector by revenue by revenue and volume and volume MarketMarket sharesshares shares shares (%) (%) in in the the licensed licensed letter letter services services sector sector by revenue by revenue and volume and volume 1) YearMarket sharesshares (%) (%) 2010 2011 20122012 20132013 2014*2014* 20152015 1) Revenues 1) RevenuesYear 2010 2011 20122012 20132013 2014*2014* 20152015 1) Deutsche Post Group 89.6 90 88.5 87.7 87.8 87.3 DeutscheRevenues Post Group 89.6 90 88.5 87.7 87.8 87.3 CompetitorsDeutsche Post Group 10.489.6 1090 11.588.5 12.387.7 12.287.8 12.787.3 Competitors 10.4 10 11.5 12.3 12.2 12.7 CompetitorsDeutsche Post Group 10.489.6 1090 11.588.5 12.387.7 12.287.8 87.312.7 Volumes* Competitors 10.4 10 11.5 12.3 12.2 12.7 DeutscheVolumes**Volumes* Post Deutsche Group 89.8 89.4 88.6 87.7 87.6 86.8 CompetitorsPostDeutscheVolumes** Group Post Deutsche Group 89.810.289.8 89.410.689.4 11.488.688.6 12.3 87.787.7 12.5 87.687.6 86.813.286.8

CompetitorsCompetitorsPost Group 10.289.810.2 10.689.410.6 11.411.488.6 12.312.387.7 12.512.587.6 13.286.813.2 * RoundingCompetitors differences 10.2 10.6 11.4 12.3 12.5 13.2 ** Deutsch Post Group volumes include all access mail items * Rounding* Rounding differences differences 1)** Forecast Deutsch figures Post Group volumes include all access mail items *** Rounding Deutsch differencesPost Group volumes include all access mail items 1) 1)Forecast Forecast figuresfigures ** Deutsch Post Group volumes include all access mail items 1) Forecast figures Competitors' market structure InDeutsche 2014 the Post ten Group's largest tencompetitors largest competitors to Deutsche antici Post - In 2014 around 570 operators other than Deutsche Post GrouppateIn 2014 further generated the increases ten aroundlargest in competitors€0.5bnrevenues in (+6.2%)revenues to Deutsche and and volumes Post Competitors'AG provided markettheir own structure licensed letter services. Of handled(+7.3%)Group in generated1.1bn 2015. items. This around group This is €0.5bnis approximately the main in revenues driver 50% behind and of the InparticularCompetitors' 2014 around note market again570 operators isstructure the continued other than high Deutsche proportion totalgrowthhandled revenues in 1.1bncompetition, generated items. This with and is competitors aroundapproximately 54% focusingof the50% total of the PostofIn small 2014 AG providedcompanies around 570their with operators own an licensedannual other revenue letter than services. Deutsche of less than Of volumemainlytotal revenues onof items the business handlegeneratedd customer by and all ofaround Deutsche segment. 54% Post of the Group's total particular€100,000.Post AG providedTherenote again are their 325 is the such own continued companies,licensed high letter more proportion services. than Of competitors.volume of items The ten handle largestd by competitors all of Deutsche recorded Post Group's a ofhalfparticular small of the companies total note number again with is an ofthe companiesannual continued revenue operating high of proportion less in than the yearStampcompetitors.-on prices-year increase The ten in largest revenues competitors of €70m, recorded with a a €100,000.market.of small By companies There contrast, are 325therewith such anare annual companies,120 larger revenue companies more of lessthan than similarlyDeutscheyear-on positive -Postyear AG'sincrease development stamp in revenuesprice in for volumes. standard of €70m, letterswith a has halfwith€100,000. of a therevenue total There ofnumber more are 325 thanof companies such €1.0m companies, per operating annum. more in than the risensimilarly several positive times sincedevelopment 2013. As in from volumes. January 2016, market.half of Bythe contrast, total number there of are companies 120 larger operating companies in the Deutschesending a Poststandard Group's letter ten costs largest €0.70. competitors withInmarket. 2015 a revenue a numberBy contrast, of moreof companies there than are €1.0m 120again per larger withdrew annum. companies from anticipateDeutsche further Post Group's increases ten ilargestn revenues competitors (+6.2%) and thewith market a revenue owing of to more insolvency than €1.0m or having per annum. merged with volumesOverall,anticipate however,(+7.3%) further in Deutsche increases2015. This Post in group revenues AG's isprices the (+6.2%) main for driver and Inother 2015 licensees. a number The of numbercompanies of licensedagain withdrew operators from with behindindividualvolumes growth (+7.3%)letter in items competition, in 2015. (eg postcards, This with group competitors standard is the main letters, driver theanIn annual market 2015 a revenue owingnumber to of of insolvency over companies €10.0m or again havingwas morewithdrew mer orged less withfrom the focusingcompactbehind mainlygrowthletters) onremainedin thecompetition, business relatively customerwith stablecompetitors segment. in the othersamethe marketinlicensees. 2014 owingas Thein the tonumber insolvencyprevious of licensed year. or having These operators mercompanies,ged with with periodfocusing from mainly when on the the letters business market customer was liberalised segment. to anhavingother annual operatedlicensees. revenue in The of the over number market €10.0m of for licensed somewas more considerable operators or less with Stamp2015. prices thetime,an same annual have in been 2014revenue able as in ofto the overestablish previous €10.0m viable year. was business moreThese or less DeutscheStamp prices Post AG's stamp price for standard letters companies,models.the same in having 2014 operatedas in the previousin the market year. forThese some hasDeutsche risen several Post AG's times stamp since price 2013. for As standard from letters considerable companies, time,having have operated been able in the to marketestablish for viable some Januaryhas risen 2016, several sending times a standard since 2013. letter As fromcosts €0.70. businessInconsiderable 2014 the models. ten time,largest have competitors been able toto Deutscheestablish viablePost January 2016, sending a standard letter costs €0.70. Groupbusiness generated models. around €0.5bn in revenues and Overall, however, Deutsche Post AG's prices for handled 1.1bn items. This is approximately 50% of the individualOverall, however, letter items Deutsche (eg postcards, Post AG's standard prices for letters, total revenues generated and around 54% of the total compactindividual letters) letter remained items (eg relatively postcards, stable standard in the letters, volume of items handled by all of Deutsche Post periodcompact from letters) when theremained letters relatively market was stable liberalised in the Group's competitors. The ten largest competitors toperiod 2015. from when the letters market was liberalised recorded a year-on-year increase in revenues of €70m, to 2015. with a similarly positive development in volumes. Licensed letter service operators by revenue* (withoutLicensed Deutsche letter Postservice Group) operators by revenue* Revenue(without Deutsche PostUp Group) to >€100,000 >€500,000 >€1m to >€10m Total Revenue €100,000Up to to €500,000>€100,000 to>€500,000 €1m €10m>€1m to >€10m Totalnumb 2010 €100,000~ 330 to €500,000108 to €1m 44 €10m 93 20 numb 595

20112010 ~ 330~ 330 117108 4244 9093 2220 601595 20122011 ~ 350~ 330 113117 3642 10390 2822 630601 20132012 ~ 350~ 350 94113 4236 94103 2628 606630 20142013 ~ 325~ 350 9794 2842 9294 2726 569606

*2014 The number of companies in the breakdown~ 325is lower than the total number97 of licensed operators since28 in several cases the parent92 company or group provided27 data for all 569 affiliated licensed companies. * The number of companies in the breakdown is lower than the total number of licensed operators since in several cases the parent company or group provided data for all affiliated licensed companies.

MARKET WATCH | POST | 95

Sttamampp p prricicees sf ofor rle lttetteresr*s: 2010(in EUR) to 2*01: 6 (20€) 10 to 2016

Yeeaarr 2010 -20120120- 20132013 20142014 201 52015 20162016

Sttaannddaradr dle ttleettr (eurp (tuop 20 tgo) 20g) 0.55 0.55 0.58 0.58 0.60 0.60 0.62 0.62 0.700.70

Coompmpaactc tle ltteettre (ur p(u top 5t0og 50) g) 0.90 0.90 0.90 0.90 0.90 0.90 0.85 0.85 0.850.85 Large letter (up to 500g) 1.45 1.45 1.45 1.45 1.45 Large letter (up to 500g) 1.45 1.45 1.45 1.45 1.45 MARKMARKETET WATCH WATCH | P O S |T POST | 95 | 95 Maxi letter (up to 1,000g) 2.40 2.40 2.40 2.40 2.60 94 | BUNDESNETZAGENTUR | ANNUAL REPORT Maxi letter (up to 1,000g) 2.40 2.40 2.40 2.40 2.60

Poosstctacradrd 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.450.45

* Prices as at 1 January of each year * Prices as at 1 January of each year

Sttamampp p prricicees sf ofor rle lttetteresr*s: 2010(in EUR) to 2*01: 6 Market shares shares in in the the licensed licensed letter letter services services sector sector by revenue by revenue and volume and volume (20€) 10 to 2016

Market sharesshares (%) (%) Yea r 2010 -2012 2013 2014 2015 2016 Year 2010- 2013 2014 2015 2016 1) Revenues and volumes Year 2010 2011 20122012 20132013 2014*2014* 20152015 1) TSatkainndga ridn lteott earcc (uopu ton t20 pgr)i ce incr0.5ea5s es up to 02.50815 , stamp 0.60 0.62 0.70 Standard letter (up to 20g) 0.55 0.58 0.60CE P mar0.62kets : 20130.70–2014 Revenues prices for letters have decreased by 0.6% in real term s Revenues Compact letter (up to 50g) 0.90 0.90 0.90 0.85 0.85 Deutsche Post Group 89.6 90 88.5 87.7 87.8 87.3 (iCe oadmjpuasctted le ttfoerr i (nupla ttoio 50n)g s)i nce 2010.900. 0.90 0.90 0.85 0.85 2013 2014 Percentage Large letter (up to 500g) 1.45 1.45 1.45 1.45 1.45 CompetitorsDeutsche Post Group 10.489.6 1090 11.588.5 12.387.7 12.287.8 87.312.7 Large letter (up to 500g) 1.45 1.45 1.45 1.45 1.45 Change

Competitors 10.4 10 11.5 12.3 12.2 12.7 Maxi letter (up to 1,0�00g) 2.40 2.40 2.40 2.40 2.60 ThMisa xisi lleottweerr ( tupha tno t 1h,e000 incgr)ea se in t2.40he g eneral c2.40ost of 2.40Re venue2.40 (€bn ) 2.60 18.6 19.3 +4.0%

Volumes* Postcard 0.45 0.45 0.45 0.45 0.45 0.45 0.45 liviPonsgt cianrdde x in the same period. 0.45 0.45 Vo lume 0.45 DeutscheVolumes** Post Deutsche Group 89.8 89.4 88.6 87.7 87.6 86.8 (b illio n items ) 2.5 2.7 +4.9% CompetitorsPost Group 89.810.2 89.410.6 11.488.6 12.387.7 12.587.6 86.813.2 * Prices as at 1 January of each year * Prices as at 1 January of each year Workforce development Source: MRU GmbH Competitors 10.2 10.6 11.4 12.3 12.5 13.2 * Rounding differences The licensed letter service operators (excluding

*** Rounding Deutsch differencesPost Group volumes include all access mail items subcontractors) had a total average number of 1)** Forecast Deutsch figures Post Group volumes include all access mail items TakingTaking into into accountaccount priceprice increasesincreases upup toto 2015,2015 ,stamp stamp ParcelRevenu serviceses and vaccountedolumes for the largest share of the 1) Forecast figures employees in 2014 of 167,306, around 89% of whom CEP markets: 2013–2014 prices for letters have decreased by 0.6% in real terms wpricesere e formp lettersloyed b havey De utdecreasedsche Pos tby Gr 0.6%oup a innd real abo termsut 11% revenues in 2014, with 46% or €9.0bn. (ie adjusted for in lation) since 2010. Parcel services accounted for the largest share of the In 2014 the ten largest competitors to Deutsche Post b(iey adjustedthe other for ma inflation)rket playe sincers. Th 2010.ese igures comprise This compares to express 201 services'3 34%201 4(€6.6bn) Pe randcenta ge revenues in 2014, with 46% or €9.0bn. Change

Group generated around €0.5bn in revenues and staff employed on a� full-time, part-time and mini-job courier services' 20% (€3.8bn) share. This is lower than the increase in th� e general cost of TRheisv ecnuomep (a€rbnes) to express 18se.r6vi ces'19 34.3% (€6.6b+n4.0%) and

Competitors' market structure handled 1.1bn items. This is approximately 50% of the bThisasis is. lower than the increase in the general cost of living index in the same period. courier services' 20% (€3.8bn) share. In 2014 around 570 operators other than Deutsche total revenues generated and around 54% of the total living index in the same period. Volume (billion items) 2.5 2.7 +4.9% Post AG provided their own licensed letter services. Of volume of items handled by all of Deutsche Post Group's There was a year-on-year decrease in the number of Workforce development Source: MRU GmbH particular note again is the continued high proportion competitors. The ten largest competitors recorded a sWorkforcetaff emplo developmentyed in the licensed letter services segment CEP revenue shares: 2014 The licensed letter service operators (excluding of small companies with an annual revenue of less than year-on-year increase in revenues of €70m, with a aThet bo licensedth Deuts letterche Po servicest Grou operatorsp and its c (excludingompetitors . Given (%) subcontractors) had a total average number of €100,000. There are 325 such companies, more than similarly positive development in volumes. tsubcontractors)he overall decli nhade in a m totalail vo averagelumes, inumbert can be ofass emploumed- employees in 2014 of 167,306, around 89% of whom half of the total number of companies operating in the tyeeshat tinhe 2014 num ofbe 167,306,r of emp laroundoyees w 89%ill co ofnt whominue to were fall were employed by Deutsche Post Group and about 11% market. By contrast, there are 120 larger companies Deutsche Post Group's ten largest competitors semployedlightly. St rbyuc Deutschetural chan Postges i nGroup the m andarke aboutt resu 11%lted ibyn a Parcel services accounted for the largest share of the by the other market players. These igures comprise with a revenue of more than €1.0m per annum. anticipate further increases in revenues (+6.2%) and ftheurt hotherer in crmarketease i nplayers. the num Theseber o figuresf emplo ycompriseees switc staffhing revenues in 2014, with 46% or €9.0bn. staff employed on a full-time, part-time and mini-job volumes (+7.3%) in 2015. This group is the main driver bemployedetween li conen as efull-time,d and non part-time-licensed sand�erv imini-jobces, since basis. This compares to express services' 34% (€6.6bn) and basis. In 2015 a number of companies again withdrew from behind growth in competition, with competitors many companies operate both types of service. courier services' 20% (€3.8bn) share. the market owing to insolvency or having merged with focusing mainly on the business customer segment. There was a year-on-year decrease in the number of 46 There was a year-on-year decrease in the number of other licensees. The number of licensed operators with Cstaffou remployedier, exp inre thess alicensednd pa rlettercel ( servicesCEP) se segmentrvices staff employed in the licensed letter services segment CEP revenue shares: 2014 an annual revenue of over €10.0m was more or less Stamp prices at both Deutsche Post Group and its competitors. Given at both Deutsche Post Group and its competitors. Given (%) the same in 2014 as in the previous year. These Deutsche Post AG's stamp price for standard letters Rtheev eoverallnues a nddecline volum ines mail volumes, it can be assumed companies, having operated in the market for some has risen several times since 2013. As from the overall decline in mail volumes, it can be assumed Ththate ptheosi numbertive deve oflo pemployeesments see nwill in tcontinuehe CEP se torv fallices that the number of employees will continue to fall considerable time, have been able to establish viable January 2016, sending a standard letter costs €0.70. mslightly.arket b Structuraletween 20 1changes0 and 2 01in 3the co marketntinued .resulted In 2014 in a slightly. Structural changes in the market resulted in a business models. rfurtherevenue increases in the C inEP the ma numberrket tota oflled employees €19.3bn. switchingThis further increase in the number of employees switching Overall, however, Deutsche Post AG's prices for rbetweenepresen tlicenseds a year- andon-y non-licensedear increase o services,f 4.0%, w sincehich is between licensed and non-licensed services, since individual letter items (eg postcards, standard letters, hmanyigher companies than the ov operateerall eco bothnom itypesc grow ofth service. rate of 1.6% many companies operate both types of service. compact letters) remained relatively stable in the for 2014. Parcels period from when the letters market was liberalised Express 46 Courier, express and parcel (CEP) services to 2015. Courier, express and parcel (CEP) services Courier

Revenues and volumes Revenues and volumes The positive developments seen in the CEP services The positive developments seen in the CEP services Source: MRU GmbH market between 2010 and 2013 continued. In 2014 Licensed letter service operators by revenue* market between 2010 and 2013 continued. In 2014 revenues in the CEP market totalled €19.3bn. This (without Deutsche Post Group) revenues in the CEP market totalled €19.3bn. This represents a year-on-year increase of 4.0%, which is Revenue Up to >€100,000 >€500,000 >€1m to >€10m Total represents a year-on-year increase of 4.0%, which is €100,000 to €500,000 to €1m €10m numb higher than the overall economic growth rate of 1.6% higher than the overall economic growth rate of 1.6% 2010 ~ 330 108 44 93 20 595 for 2014. for 2014. Parcels 2011 ~ 330 117 42 90 22 601 Express 2012 ~ 350 113 36 103 28 630 Courier 2013 ~ 350 94 42 94 26 606

2014 ~ 325 97 28 92 27 569 Source: MRU GmbH

* The number of companies in the breakdown is lower than the total number of licensed operators since in several cases the parent company or group provided data for all affiliated licensed companies. 96 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

96 | BUNDESNETZAGENTUR | ANNUAL REPORT

Growth in the three segments varied in 2014: parcel This enables regional operators, for example, to offer services had the largest increase in revenue at 6.7%, national delivery services to their customers. while express services had a 2.2% increase and courier Growthservices in 1.0%. the threeParcel segments services havevaried long in 2014: been theparcel main ThisTo enable enables the regional Bundesnetzagentur operators, for to example, follow market to offer servicesdriver behind had the growth largest in increase the CEP in market. revenue at 6.7%, nationaldevelopments, delivery Deutsche services Post to their Group customers. must submit all while express services had a 2.2% increase and courier access contracts to the Bundesnetzagentur within one servicesFollowing 1.0%. the trendParcel of services recent years,have long total been volumes the main in Tomonth enable of conclusion.the Bundesnetzagentur A distinction to is follow made market between driverthe CEP behind market growth also continued in the CEP to market. increase in 2014, up developments,contracts with Deutscheoperators Post primarily Group providing must submit trans all- by 4.9% on 2013 to 2.7bn items. Based on the informa- incidentalport, pre-sorting service or contract frankings to services. the Bundesnetzagentur Followingtion provided the trendfor this of report, recent years,total revenue total volumes increased in the in within one month of conclusion. A distinction is made CEP2015 market by approximately also continued 3.5% to and increase volume in 2014,by around up by betweenIn 2015 Deutsche agreements Post with Group operators concluded primarily 16,782 new 4.9%4.0%. on 2013 to 2.7bn items. Based on the information providingaccess contracts, transport, including pre-sorting 22 with or frankingcompetitors services. for provided for this report, total revenue increased access services (outward letters, inward letters, inward inThe 2015 increase by approximately in internet bandwidth 3.5% and volumeand mobile by around InInfopost 2015 Deutsche items), 97 Post with Group end customers concluded for 16,782 access new 4.0%.internet availability are key drivers behind growth in e agreements,services (outward including letters, 22 withinward competi letters,tors inward for commerce, with changes in consumer habits also incidentalInfopost items) services and (outward 33 with end letters, customers inward for letters, coopera - Theboosting increase online in internet retail sales. bandwidth In the parcels and mobile segment, in inwardtion in conveyingInfopost items), Infopost 97 withitems. end customers for internetparticular, availability all the signs are arekey pointing drivers behind to a further growth in incidental services (outward letters, inward letters, eincrease-commerce, in volumes with changes and revenues. in consumer habits also inwardDeutsche Infopost Post also items) concluded and 33 16,380with end new customers access boosting online retail sales. In the parcels segment, in forcontracts cooperation for franking in conveying end customers' Infopost it andems. competitors' particular, all the signs are pointing to a further items and 232 contracts for electronic franking increaseAccess inservices, volumes and PO revenues. box facilities and (letters)/franking items using data processing equip- change-of-address information Deutschement and Postmailing also systems.concluded 16,380 new agreements Incidental services, PO box facilities and for franking end customers' and competitors' items and change-of-address information 232 agreements for electronic franking (letters)/franking items using data processing Access services equipment and mailing systems. IncidentalDeutsche Postservices Group, as the dominant operator in the Deutsche Post Group, as the dominant operator in the market for licensed letter services, is required to offer market for licensed letter services, is required to offer parts of these services separately. Access to Deutsche some of its services separately as incidental services. Post Group's network is open on the same terms to Access to Deutsche Post Group's network is open on the both competing operators and end customers. same terms to both competing operators and end

customers.

Agreements Number

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Competitors (outward letters, inward letters, inward Infopost items)

End customers (outward letters, inward letters, inward Infopost items)

End customers (cooperation in conveying Infopost items) MARKET WATCH | POST | 97

In some cases, companies have the option of a supple- tive offence proceedings. The companies and individu- mentary agreement allowing items from affiliated als concerned are first contacted for comment and may companies to be handled as well. Companies then then be ordered to cease their activities and face mailing larger volumes together would qualify for coercive or administrative fines. In 2015 the Bundes- better discounts on postage. The full scope of options netzagentur searched the premises of several postal has yet to be exhausted. Supplementary agreements are operators in North Rhine-Westphalia and Saxony- generally available to both end customers and compe- Anhalt following reports from other companies and ting operators. In 2015 18 such agreements were the police of serious infringements in operating their signed. letter services. In one instance letters had been opened illegally, and in another letters had been disposed of Changes of address, PO box facilities illegally. The Bundesnetzagentur's checks revealed that Deutsche Post Group, as the dominant operator, is the companies concerned had been operating letter required to offer competitors access to change-of- services without the required licence. The Bundesnetz- address information in return for a fee. In 2015 five agentur therefore opened prohibition and administra- new agreements were concluded for access to such tive fines proceedings against the companies. Where information. the activities constituted criminal offences, investiga- tions were launched by the police and public The Bundesnetzagentur carried out a market survey in prosecutors. 2015 to look more closely at this access product. The survey revealed that in most cases information about Subcontractor survey individual addresses was requested. The results of the survey conducted in 2014 on working conditions at licensed operators' subcontractors were The dominant operator is also required to allow evaluated and the project was completed in 2015. The competitors to deliver PO box addressed mail to its PO survey questioned transport companies and post office box facilities, again in return for a fee. In 2015 one new agents separately, covering a total of about 2,600 agreement was concluded for PO box access. transport companies and 1,200 agencies. The survey showed that in 2013 the national average gross hourly The Bundesnetzagentur also looked more closely in rate for workers at the transport companies (drivers 2015 at this access product. One of its findings was that and delivery staff) was €8.31, which is below the only one in four active postal operators uses this current minimum wage. It also revealed that in option. One of the reasons is that many letter service economic terms letter services were only of minor operators focus mainly on collecting mail, which is importance to the subcontractors participating in the then delivered to the recipients by other operators, in survey. particular Deutsche Post AG. Notification obligation Operators of licence-exempt postal services are Market access required to notify the Bundesnetzagentur in writing and within one month when they commence, change Licensing or cease operations. The postal services that are Between 1998 and 2015 the Bundesnetzagentur issued notifiable include: licences for the conveyance of letters up to 1,000g to a • conveying letters with an individual weight of more total of 2,952 companies and individuals. In 2015 53 than 1,000g; new licences were issued. In the same year 13 licensed • conveying addressed parcels weighing up to 20kg; operators withdrew from the market, for instance • courier services; conveying books, catalogues, because they had ceased business or changed business newspapers or magazines by companies also activities or had their licence revoked by the Bundes- operating letter or parcel services; and netzagentur. The Bundesnetzagentur has no reason to • conveying letters with an individual weight of up to believe that the introduction of the minimum wage 1,000g as a subcontractor of another licensed has had a negative effect on licensed operators' operator. activities.

Should companies or individuals operate services without the required licence, the Bundesnetzagentur may prohibit their activities and initiate administra- 98 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

In 2015 the Bundesnetzagentur identified a number of The new electronic procedures will make communica- 98 | BUNDESNETZAGENTUR | ANNUAL REPORT breaches of the notification obligation. In most cases tion between the public and industry on the one hand the operators had been unaware of their obligations and the Bundesnetzagentur on the other hand under the German Postal Act. This prompted the considerably easier. Bundesnetzagentur to intensify its information servicesconveying and books,contact catalogues, a large number newspapers of sole tradersor The new electronic procedures will make primarilymagazines providing by companies postal alsoservices operating but also letter in particu or - communication between the public and industry on larparcel parcel services; shops affiliated and with the major parcel carriers the one hand and the Bundesnetzagentur on the other and conveying providing letters postal with services an individual as a by-product weight of only. up toIn hand considerably easier. 20151,000g the Bundesnetzagenturas a subcontractor of confirmed another licensed 6,077 new • notifications.operator. Postal market checks/data protection As one of its ongoing tasks the Bundesnetzagentur InElectronic 2015 the forms Bundesnetzagentur identified a number of carried out checks at a number of postal operators' breachesIn 2015 the of Bundesnetzagentur,the notification obligation. in cooperation In most cases with premises in 2015 to verify compliance with the thethe operatorsCentre for had Data been Processing unaware and of theirInformation obligations statutory provisions for postal secrecy and data underTechnology the Ge (ZIVIT),rman Postal designed Act. This a series prompted of electronic the protection and the notification obligations. A total of Bundesnetzagenturforms. During the course to intensify of 2016 its it information will be possible for 580 checks were carried out, 502 of which were routine servicesoperators and to contactsubmit anda large amend number their of section sole traders 36 and 78 prompted by specific circumstances. Postal primarilynotifications providing electronically. postal services Licence but applications also in can be secrecy and data protection was an issue of key interest particularsubmitted parcel and processed shops affiliated online. with Complaint the major and parcel to the operators as well. The Bundesnetzagentur was carriersdispute resolutionand providing forms postal will services be available as a onby- theproduct able to answer their questions in particular about the only.Bundesnetzagentur's In 2015 the Bundesnetzagentur website for different confirmed customer 6,077 requirements for business operations and premises. It newgroups, notifications. making it simpler and quicker for consumers to often emerged that companies not operating as part of a contact the Bundesnetzagentur. network were unaware of their obligation to notify the Electronic forms Bundesnetzagentur of their licence-exempt services. In 2015 the Bundesnetzagentur, in cooperation with the Centre for Data Processing and Information Technology (ZIVIT), designed a series of

Notifications received: 2012-2015 6989

1016 757

184 187 181

1) 2012 2013 2014 2015

Commencement Changes Cessation Total

1) Updated figures

electronic forms. During the course of 2016 it will be The Bundesnetzagentur also carried out spot checks at possible for operators to submit and amend their several Deutsche Post AG premises. These checks were section 36 notifications electronically. Licence prompted by complaints during industrial action at the applications can be submitted and processed online. group and information received by the Complaint and dispute resolution forms will be Bundesnetzagentur indicating that other postal available on the Bundesnetzagentur's website for operators had been asked during the period of different customer groups, making it simpler and industrial action to hand over certain mail items for quicker for consumers to contact the delivery by Deutsche Post AG at special warehouses. Bundesnetzagentur. There was concern that postal secrecy and data protection could not be guaranteed to the same degree in these warehouses as at the mail centres. MARKET WATCH | POST | 99

Postal market checks/data protection The checks revealed neither such external warehouses As one of its ongoing tasks the Bundesnetzagentur nor breaches of the postal secrecy and data protection carried out checks at a number of postal operators' provisions. premises in 2015 to verify compliance with the statutory provisions for postal secrecy and data One of the issues covered in 2015 by the activities in protection and the notification obligations. A total of the field of postal data protection in cooperation with 580 checks were carried out, 502 of which were routine the Federal Commissioner for Data Protection and and 78 prompted by specific circumstances. Postal Freedom of Information was e retail. In respect of secrecy and data protection was an issue of key interest personal data required for proper postal service to the operators as well. The Bundesnetzagentur was provision, the authorities ruled that it was permissible able to answer their questions in particular about the to have the customer's telephone number as well as requirements for business operations and premises. It their name and address on the outside of a parcel. This often emerged that companies not operating as part of could help speed up the delivery process and make it a network were unaware of their obligation to notify more customer-friendly. the Bundesnetzagentur of their licence-exempt services.

Further development of the postal universal service Digitisation has brought about significant changes in the use of postal services over the past few years. This also raises questions about the effects on the universal service, which ensures the availability of basic postal services for all.

The legal framework for this basic service provision The increase in the number of complaints shows that – the German Postal Universal Service Ordinance consumer interests are not always adequately protected. (PUDLV) and the European regulations in the Postal Thought should be given here to strengthening consu- Services Directive – was developed in the 1990s and thus mer rights in the postal sector. at a time when electronic communications had yet to be taken up by the masses.

The Bundesnetzagentur therefore triggered discussions about the postal universal service with its "food for thought" paper published at the end of 2014. Even though the market players do not see an acute need for changes to the universal service requirements at the moment, the present framework needs to be reviewed in light of the advance of digitisation. Given the dynamism of market developments, viable concepts for the future design of the postal universal service should be devel- oped. The responses to the consultation on the "food for thought" paper which are reflected in the Bundesnetzagentur's recommendations on the postal universal service can therefore mark only the beginning of the discussion process. Due account must also be taken of the need for effective consumer protection.

CONSUMER PROTECTION AND ADVICE | POST | 101

100 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Consumer Consumer advice

protection and TheConsumer Bundesnetzagentur advice has established itself as a port Consumer protection of call and provider of advice for consumers with adviceand advice complaintsThe Bundesnetzagentur about letter or has parcel established delivery itselfservices. as a Forport Complaints about letter or theof callBundesnetzagentur's and provider of advice postal for consumer consumers advice with team, Complaints about letter or complaintscomplaints are about a valuable letter or indicator parcel delivery of potential services. For parcel delivery services have irregularitiesthe Bundesnetzagentur's in the nationwide postal provision consumer of advicebasic team, parcel delivery services have postalcomplaints services are (the a valuable universal indicator service). of The potential increasedincreased significantly.significantly. The The Bundesnetzagenturirregularities in the investigates nationwide the provision complaints of basic and Bundesnetzagentur offers askspostal the services operators (the for universal feedback service). after looking The Bundesnetz into the - Bundesnetzagentur offers matter,agentur with investigates the aim of the finding complaints the most and customer asks the- advice and active support. It friendlyoperators solutions for feedback possible. after Consumers looking into who the turn matter, to the advice and active support. It Bundesnetzagenturwith the aim of finding for help the have most a customer-friendly much higher monitorsmonitors the the availability availability of of prospectsolutions of possible. satisfactory Consumers answers who and turnproposals to the from theirBundesnetzagentur postal operators. for help have a much higher basicbasic postal postal services. services. prospect of satisfactory answers and proposals from Complaintstheir postal operators.

TheComplaints number of complaints about letter and parcel deliveryThe number services of complaints increased significantly about letter inand 2015. parcel The Bundesnetzagenturdelivery services increased received significantly a total of 3,318 in 2015.written The complaintsBundesnetzagentur (emails and received letters), a totalup 70% of 3,318 on 2014 written (1,950complaints complaints). (emails In and 2015 letters), the Bundesnetzagentur up 70% on 2014 (1,950 alsocomplaints). dealt with In around 2015 the 1,800 Bundesnetzagentur calls from postal also dealt consumers.with around 1,800 calls from postal consumers.

Written complaints

3,318

1,950

1,230

2013 2014 2015

SomeSome complaints complaints related related to to several several issues. issues. 47% 47% of of the the complaintscomplaints received received were were about about letter letter services services and and 28% 28% aboutabout parcel parcel services. services. The The remainder remainder was was broken broken down down asas follows: follows: newspaper newspaper delivery delivery (5%), (5%), postboxes (2%),(2%), fixedfixed-location-location facilities facilities such such as as post post office office branches branches and agenciesand agencies (2%), (2%), and otherand other matters, matters, including including postal postal operators'operators' complaint complaint handling handling (11%). (11%).

100 | BUNDESNETZAGENTUR | ANNUAL REPORT 100 | BUNDESNETZAGENTUR | ANNUAL REPORT CONSUMER PROTECTION AND ADVICE | POST | 101

100 | BUNDESNETZAGENTUR | ANNUAL REPORT Letter services Complaints by reason: 2015 LetterLetter services services Complaints (%) by reason: 2015 The majority of complaints about letter services (%) 5 TheTheconcerned majority majority delivery. of of complaintscomplaints Customers about complained letter services about the 5 11 concernedconcernedlack of delivery delivery. delivery. on Customers certainCustomers days complainedcomplained of the week aboutabout or over the a 11 Complaints by reason: 2015 Letterlacklacklonger servicesof of delivery delivery period ofon on time, certain certain letters daysdays being ofof thethe deli weekweekvered oror overtoover aa 2 (%) Thelongerlonger majority period period of complaints of of time, time, lettersletters about being letterbeing services delivereddelivered toto 2 alternative or wrong addresses, and letters being 5 2 concernedalternativealternativereturned delivery. withoutor or wrong wrong Customers any addresses, addresses, obvious complained andreason. and letters letters about This being being wasthe 2 5 11 lackreturnedreturned of delivery without without on certain anyany obviousobviousdays of the reason.reason. week ThisorThis over was a followed by frequent complaints about "lost" letters, 5 longer period of time, letters being delivered to 2 47 followedfollowedtransit times,by by frequent frequent stamp complaints prices,complaints redirection aboutabout "lost""lost" services, letters,letters, 47 alternative or wrong addresses, and letters being transittransitregistered times, times, post stamp stamp and prices, prices,damaged redirectionredirection letters. services,services, 2 returned without any obvious reason. This was registeredregistered post post and and damaged damaged letters. letters. 5 followed by frequent complaints about "lost" letters,

47 transitThe times, strike stamp and its prices, impact redirection was also services, reflected in the TheThe strike strike and and its its impact impact waswas also also reflectedreflected inin thethe registeredcomplaints post andabout damaged delivery letters. and transit times. The slow 28 complaintscomplaintsrate of improvement about about deliverydelivery at Deutsche andand transittransit Post times.times. DHL afterThe slowthe 28 raterate of of improvement improvement at at Deutsche Deutsche PostPost DHLDHL after the Thestrike strike angeredand its impact many was customers, also reflected as did in the the move to Letters Parcels Newspapers complaints strike strike combine angered angered about delivery deliverymany many areas customers, customers, and during transit the as astimes. did didsummer thetheThe move moveslow holidays, toto 28 Letters Parcels Newspapers rate combine combine which of improvement Deutsche delivery delivery atPostareas areas Deutsche AG during during was Post slow thethe DHL summersummer to aftercommunicate the holidays, and

Fixed-location Postboxes Other strikewhichwhichwhich angered Deutsche Deutsche prompted many PostPost customers, a large AGAG waswas number as slowslow did ofthe toto complaints. communicate communicatemove to and Fixed facilities-location Postboxes Other Letters Parcels Newspapers combine which which deliveryprompted prompted areas a a large large during number number the summer ofof complaints.complaints. holidays, facilities Strike which At Deutscheone point Post in 2015 AG was there slow was to communicatea noticeable peakand in the Fixed-location Postboxes Other Strike whichAtAt one one prompted point point in in a 2015large2015 therenumber there was was of acomplaints. a noticeable noticeable peak peak in in the the facilities complaints received by the Bundesnetzagentur from

complaintscomplaintssome parts received received of Germany, by by the the including Bundesnetzagentur Bundesnetzagentur Berlin and Hamburg, from One difference compared to the previous year was the Strike At one point in 2015 there was a noticeable peak in the OneOne difference difference comparedcompared toto thethe previous year was thethe somesomewhere parts parts there of of Germany, wereGermany, considerable includingincluding problems Berlin andand in Hamburg,letterHam- strike at Deutsche Post DHL accounting for 5% of the complaintswhere there received were by considerable the Bundesnetzagentur problems infrom letter strikestrike at at Deutsche Deutsche Post Post DHL DHL accountingaccounting for 5% ofof thethe burg,deliveries. where thereIn some were cases considerable there were problems no deliveries in letter for a complaints. Complaints were made about the some parts of Germany, including Berlin and Hamburg, complaints.complaints.One difference Complaints Complaints compared were to the mademade previous about year the was disrup the - deliveries.deliveries.number ofIn In days some some at cases casesa time. there there Deutsche were were no Postno deliveries deliveries AG said for when for a a disruption to letter and parcel services caused by the where there were considerable problems in letter tionstrike to letter at Deutsche and parcel Post DHLservices accounting caused for by 5% the of strike, the numbernumber of of days days at at a a time. time. Deutsche Deutsche PostPost AGAG said when disruptionstrike, about to letterthe problem and parcel frequently services experienced caused by the by contacted by the Bundesnetzagentur that the lack of complaints. Complaints were made about the deliveries. In some cases there were no deliveries for a aboutstrike, the about problem the problem frequently frequently experienced experienced by custo by- contactedcontacteddeliveries by by had the the been Bundesnetzagentur Bundesnetzagentur due to an unexpectedly that the high lack of customersdisruption toof letternot being and parcel able to services collect causedpost themselves by the number of days at a time. Deutsche Post AG said when merscustomers of not ofbeing not beingable to able collect to collect post themselves post themselves from a deliveriesdeliveriesnumber hadof had staff been been off due sick,due to to changes an an unexpectedly unexpectedly in delivery highhigh areas and fromstrike, a aboutpost office the problem branch frequently or sorting experienced office, and aboutby contacted by the Bundesnetzagentur that the lack of postfrom office a post branch office orbranch sorting or sortingoffice, and office, about and the about lack numbernumorember staff of of staff staff on holiday. offoff sick, The changes Bundesnetzagentur in delivery areasareas then and thecustomers lack of ofproper not being informatio able to ncollect and the post long themselves delays in deliveries had been due to an unexpectedly high of proper information and the long delays in dealing moremorerequested staff staff on on detailed holiday. holiday. information TheThe BundesnetzagenturBundesnetzagentur on staffing, then thedealingfrom lack a post ofwith proper office the backlog branchinformatio or of sorting postn and after office,the thelong and strike. delays about in number of staff off sick, changes in delivery areas and with the backlog of post after the strike. requestedrequested detailed detailed information information onon staffing,staffing, interrup- dealingthe lack with of proper the backlog informatio of postn and after the thelong strike. delays in moreinterruptions staff on holiday. in delivery, The Bundesnetzagentur and delivery rounds. then The tionsinterruptions in delivery, in delivery,and delivery and rounds.delivery The rounds. Bundesnetz The - Indealing 2015 withthe majoritythe backlog of complaintsof post after camethe strike. from requestedBundesnetzagentur detailed information was in on continuous staffing, contact with the In 2015 the majority of complaints came from custo- interruptionsagenturBundesnetzagentur was in in delivery, continuous was and in delivery contactcontinuous rounds. with contact the The company with the In customers 2015 the inmajority North Rhineof complaints-Westphalia came (451), from followed company about the shortcomings in its letter services mers in North Rhine-Westphalia (451), followed by Bundesnetzagenturaboutcompany the shortcomingsabout thewas shortcomings in continuous in its letter contactin services its letter with and servicesthe called customersbyIn 2015Berlin the (351),in majority North Hamburg Rhine of complaints-Westphalia (317) and came Lower (451), from Saxonyfollowed Berlin (351), Hamburg (317) and Lower Saxony (315). As comforpany long-term about the improvement shortcomings in in the its lettersituation. services Up to the by(315).customers Berlin As (351), in in 2014 North Hamburg the Rhine smallest- Westphalia(317) num andber Lower(451), of complaints followedSaxony in 2014 the smallest number of complaints came from end of the period under review, however, problems in (315).cameby Berlin Asfrom in (351), Saarland2014 Hamburg the (15).smallest (317) num andber Lower of complaints Saxony Saarlandcame (315). from As (15). in Saarland 2014 the (15). smallest number of complaints certain areas were still being reported. Complaintscame from by Saarland federal (15).state: 2015 Complaints by federal state: 2015 Complaints by federal state: 2015 Reasons for complaints – letter deliveries: 2015 Complaints by federal state: 2015

317 Reasons for complaints – letter deliveries: 2015 (%) Reasons for complaints – letter deliveries: 2015

317 (%) 201 11 38 317 (%)

38 201 29 11

38 201 11 29

29 351 5

315 351 5 351 5 315

315

37 73 8

451 37 73 8 8 37 73 451451 42

255 18 4242 255255 1818 78 9 7878 15 9 9

15 15 313 219 67 313 219 313 67 219 67

Delivery Loss Transit times Prices Other Delivery Loss Transit times Prices Other Delivery Loss Transit times Prices Other

102 | BUNDESNETZAGENTUR | ANNUAL REPORT

and called for long-term improvement in the situation. Universal service provision Up to the end of the period under review, however, The Bundesnetzagentur monitors the provision of 102 | problemsBUNDESNETZAGENTUR in certain areas | ANNUALwere still REPORT being 2015 reported. sufficient and affordable postal services across the country. The Postal Universal Service Ordinance Parcel services specifies the content and scope of this basic service The majority of the complaints about parcel services provision (universal service). The Ordinance designates Parcelconcerned services delivery. Many consumers complained about Universalspecific postalservice services provision as universal services and defines Thefinding majority a missed of the delivery complaints card inabout their parcel letter services box Thecertain Bundesnetzagentur quality standards monitors for letter the and provision parcel services. of concernedalthough theydelivery. could Many prove consumers they had been complained at home and sufficient and affordable postal services across the abouttheir findingdoorbell a wasmissed working delivery properly. card in They their also letter pointed box country.One of these The Postal is the requirementUniversal Service that there Ordinance must be at althoughout that theyneighbours could prove had been they at had home been who at homecould andhave specifiesleast one the letter content and parceland scope delivery of this per basic working service day in theirtaken doorbell their parcel was working instead. properly.Other subjects They ofalso complaint pointed provisionGermany. (universal This statutory service). requi Therement Ordinance was met designates in 2015, outwere that parcels neighbours being hadreturned been toat homethe sender who forcould no have specificeven though postal indications services as ofuniversal possible services deficits andincreased. takenproper their reason parcel and instead. lost or Otherdamaged subjects parcels. of complaint definesThere wascertain a noticeable quality standards increase infor the letter number and parcel of wereDissatisfaction parcels being with returned parcel trackingto the sender systems, for nowhich proper did services.complaints received by the Bundesnetzagentur about – reasonnot always and lost run or smoothly, damaged also parcels. played Dissatisfaction a large part. The sometimes persistent – shortcomings in delivery. One of withpostal parcel strike tracking and the systems, very slow which improvement did not always in run Onethe ofcontributing these is the f actorsrequirement was most that certainly there must the bestrike at at Deutsche Post DHL and in particular the slow smoothly,services atalso Deutsche played Posta large DHL part. after The the postal strike strike were and also least one letter and parcel delivery per working day in improvement in delivery after the strike. thereflected very slow in the improvement complaints inabout services parcel at delivery.Deutsche Post Germany. This statutory requirement was met in 2015, DHL after the strike were also reflected in the comp- even though indications of possible deficits increased. Another requirement is that there must be at least laints about parcel delivery. There was a noticeable increase in the number of 12,000 fixed-location facilities in Germany where complaints received by the Bundesnetzagentur about customers can conclude contracts for the conveyance of – sometimes persistent – shortcomings in delivery. One letters and parcels. In 2015 Deutsche Post AG alone Reasons for complaints – parcel deliveries: 2015 of the contributing factors was most certainly the operated a total of 13,160 branches or agencies for letter (%) strike at Deutsche Post DHL and in particular the slow and parcel services. Last year customers in many towns improvement in delivery after the strike. 6 and districts could also use fixed-location facilities operated by Deutsche Post AG's competitors to send Another requirement is that there must be at least letters. 12,000 fixed-location facilities in Germany where customers can conclude contracts for the conveyance In 2015 the Bundesnetzagentur once again identified of letters and parcels. In 2015 Deutsche Post AG alone progress in enhancing the infrastructure for collecting operated a total of 13,160 branches or agencies for letter and transporting parcels. The upward trend from and parcel services. Last year customers in many towns previous years continued – with Deutsche Post DHL as and districts could also use fixed-location facilities well as with other major parcel operators such as DPD, operated by Deutsche Post AG's competitors to send GLS Germany, Hermes Logistik Gruppe and UPS. These letters. 4 five companies together put the number of parcel shops

operated in Germany in 2015 at around 40,000. 8 In 2015 the Bundesnetzagentur once again identified progress in enhancing the infrastructure for collecting Delivery Loss and transporting parcels. The upward trend from Damage Transit times previous years continued – with Deutsche Post DHL as well as with other major parcel operators such as DPD, Tracking Other GLS Germany, Hermes Logistik Gruppe and UPS. These five companies together put the number of parcel shops operated in Germany in 2015 at around 40,000.

CONSUMER PROTECTION AND ADVICE | POST | 103

One condition is that they must have first tried – and failed – to settle the issue with their postal operator. Another is that their operator must be willing to

cooperate in the proceedings. CONSUMER PROTECTION AND ADVICE | POST | 103 CONSUMER PROTECTION AND ADVICE | POST | 103 Where possible, the Bundesnetzagentur's dispute

resolution panel suggests ways for the two parties to settle the dispute amicably. The parties are not obliged to follow the Bundesnetzagentur's suggestions and are to follow the Bundesnetzagentur's suggestions and are Onefree condition to end the is voluntary that they mustprocess have at anyfirst time. tried – and free to end the voluntary process at any time. failed – to settle the issue with their postal operator. AnotherIn 2015 isthe that Bundesnetzagentur their operator must received be willing 62 requests to In 2015 the Bundesnetzagentur received 62 requests for cooperatefor dispute in resolution, the proceedings. up around 10% on the previous dispute resolution, up around 10% on the previous year's figure of 56. The Bundesnetzagentur rejected year's figure of 56. The Bundesnetzagentur rejected Whereeight requests possible, that the didBundesnetzagentur's not meet the preconditions dispute for eight requests that did not meet the preconditions for resolutionresolution panel proceedings. suggests The ways remaining for the two 54 partiescases went to resolution proceedings. The remaining 54 cases went settlebefore the the dispute panel foramicably. amicable The settlement. parties are The not majority obliged before the panel for amicable settlement. The majority toof follow the cases the initiatedBundesnetzagentur's and concluded suggestions during the and year are Hermes of the cases initiated and concluded during the year freeunder to endreview the resultedvoluntary in process successful at any mediation time. by the under review resulted in successful mediation by the Bundesnetzagentur and agreement between the Bundesnetzagentur and agreement between the Inparties, 2015 the with Bundesnetzagentur providers reimbursing received their 62 customers requests parties, with providers reimbursing their customers forwith dispute on average resolution, around up 68% around of the 10% amount on the under previous with on average around 68% of the amount under Another of the statutory requirements is that sufficient year'sdispute. figure of 56. The Bundesnetzagentur rejected dispute. postboxes must be provided in Germany so that eight requests that did not meet the preconditions for customers in urban areas are, as a rule, within resolution proceedings. The remaining 54 cases went Reasons for dispute resolution requests 1,000 metres of a postbox. In 2015 Deutsche Post AG before the panel for amicable settlement. The majority

had 111,269 postboxes across the country. In addition, of the cases initiated and concluded during the year Hermes private customers in several towns and districts had under review resulted in successful mediation by the access to postboxes provided by competing operators. Bundesnetzagentur and agreement between5 the parties, with providers reimbursing their customers

The Ordinance requires that at least 80% of national with on average around 68% of the amount under Another of the statutory requirements is that sufficient Anotherletters be of deliveredthe statutory on the requirements working day is afterthat sufficientcollection dispute. postboxes must be provided in Germany so that 4 postboxesand 95% withinmust be two provided working in days. Germany Deutsche so that Post AG customers in urban areas are, as a rule, within 1,000 customerscommissions in urban an external areas are,quality as a and rule, market within research metres of a postbox. In 2015 Deutsche Post AG had Reasons for dispute resolution requests 1,000institute metres to measure of a postbox. its actual In 2015 delivery Deutsche times. Post The AG 111,269 postboxes across the country. In addition, hadmeasurements 111,269 postboxes are certified across by the TÜ country.V Rheinland In addition, and the private customers in several towns and districts had privateresults customers presented inon several a quarterly towns basis and to districts the had access to postboxes provided by competing operators. 5 accessBundesnetzagentur. to postboxes provided The results by competing show that inoperators. the period under review Deutsche Post AG met the delivery The Ordinance requires that at least 80% of national Thetargets. Ordinance However, requires the impact that at of least the strike80% of and national the letters be delivered on the working day after collection letterssluggish be ratedelivered of improvement on the working after daythe afterstrike collection were and 95% within two working days. Deutsche Post AG 4 andclearly 95% reflected within two in the working statistics. days. Deutsche Post AG commissions an external quality and market research commissions an external quality and market research institute to measure its actual delivery times. The 2014 2015 instituteDispute resolutionto measure its actual delivery times. The measurements are certified by TÜV Rheinland and the measurementsA request for dispute are certified resolution by TÜ canV Rheinland be made byand the results presented on a quarterly basis to the Bundes- Delayed/no delivery resultscustomers presented in particular on a quarterly when postal basis items to the have been netzagentur. The results show that in the period under Damage Bundesnetzagentur.lost, stolen, damaged The or resultsdelayed. show that in the period review Deutsche Post AG met the delivery targets. Loss/theft under review Deutsche Post AG met the delivery However, the impact of the strike and the sluggish rate targets. However, the impact of the strike and the of improvement after the strike were clearly reflected sluggish rate of improvement after the strike were in the statistics. clearly reflected in the statistics. 2014 2015 Dispute resolution Dispute resolution A request for dispute resolution can be made by A request for dispute resolution can be made by Delayed/no delivery customers in particular when postal items have been customers in particular when postal items have been lost, stolen, damaged or delayed. Damage lost, stolen, damaged or delayed. Loss/theft One condition is that they must have first tried – and failed – to settle the issue with their postal operator. Another is that their operator must be willing to cooperate in the proceedings. Where possible, the Bundesnetzagentur's dispute resolution panel suggests ways for the two parties to settle the dispute amicably. The parties are not obliged

104 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Rulings, activities Price cap benchmarking and proceedings In its 2013 price cap benchmarking decision the Bundesnetzagentur defined Deutsche Post AG's scope Changes in the legal basis for for pricing letters up to 1,000g for the period from 2014 to 2018. The legal basis for this decision was, however, regulating prices required the modified through the amendment of the German Bundesnetzagentur to deve- Postal Rates Regulation Ordinance (PEntgV) on 29 May 2015 and, more specifically, through the revision of lop a new price cap frame- section 3(2) of the Ordinance. This subsection defines the components of the costs of efficient service work. Higher stamp prices provision – a core benchmark in rates regulation. were approved. The revised Ordinance specifies that for the purpose of comparison in particular the profit margins of companies operating in other European countries in markets comparable with the licensed sector should be used instead of the business risk when determining the appropriate profit mark-up, one of the components of efficient service provision. In addition, the pricing intervals within the price cap procedure should be combined into a price approval period, taking into account the expected rate of price increases in the economy overall for the period. This means that there will be no individual price cap intervals within the benchmarking period.

The legislator's aim was to enable the regulated company to increase returns in order to reshape the postal networks and be able to respond appropriately to the economic challenges posed by competition from digital services such as email. The associated utilisation risks of the very staff-intensive letter service processes were to be adequately reflected in pricing.

Deutsche Post AG, referring to the amendment of the Ordinance, requested that the benchmarking process that had been effectively concluded in 2013 be resu- med. The competent ruling chamber granted the request in its notice issued on 15 June 2015. The Bundesnetzagentur then set new benchmarks in its decision published on 23 November 2015.

The Bundesnetzagentur defined a new rate of growth in productivity, or "X factor", of 5.8% for the subse- quent three years. This factor takes account of the relation between the initial rate level and the appli- cable costs according to the revised Ordinance.

Together with the expected rate of inflation of 1.7%, this enables Deutsche Post AG to make price adjust- ments of up to 7.5% in the period from 2016 to the end of 2018. RULINGS, ACTIVITIES AND PROCEEDINGS | POST | 105

The 2015 benchmarking involved both a re-examina- Approval of rates for E Postbrief mit klassi- tion of the costs and a reassessment of the structure scher Zustellung and forecast of mail volumes. It was otherwise based on more or less the same assumptions as those taken in On 18 December 2015 the competent ruling chamber the benchmarking conducted in 2011 and 2013. approved the follow-up application submitted by Deutsche Post E POST Solutions GmbH for its E Postbrief mit klassischer Zustellung with effect from Approval of letter prices for 2016 to 2018 1 January 2016.

Following the benchmarking decision Deutsche Post E Postbrief items are posted electronically by the AG submitted its proposed price changes for the period senders and delivered either electronically (to regis- from 2016 to 2018. The decision on letter prices in the tered addresses) or physically. Items that are delivered three-year period was published on 4 December 2015 physically are sent as electronic messages by the sender and was based on the new benchmarks. The decision and printed, folded, inserted in an envelope and relates to the products for personal customers that are franked with the postage payable for the comparable subject to price cap regulation, including national and Deutsche Post AG product – for instance €0.70 for a international standard, compact, large and maxi standard letter – by Deutsche Post E POST Solutions letters, postcards, and special services such as con- GmbH or one of its subcontractors. The letters are then firmed delivery. One product included for the first time passed on to Deutsche Post InHaus Services GmbH – a in the price cap was national secured delivery for cash mail consolidator which hands them over to Deutsche or valuables. Post AG – for delivery to the recipient.

The most significant change was the increase in the Each of the rates put forward for approval by Deutsche rate for a standard letter from €0.62 to €0.70. The Post E POST Solutions GmbH is the charge payable for stamp price for a maxi letter rose from €2.40 to €2.60. physically transporting the letters, just part of the Charges for special services (confirmed delivery) and service provided by the company. In other words, the some rates for international letters were also raised. rates do not correspond to the full charge payable by a Deutsche Post AG's proposed increases were near the customer. Senders also have to pay for electronic maximum allowed under the regulatory framework. posting, for producing the letter, and the applicable VAT. A private customer would for instance need to pay Following several successive increases, the decision €0.70 for a Standard-E Postbrief and not the approved will ensure that letter prices remain stable in the rate of €0.42. The rates approved are valid until period from 2016 to 2018. New benchmarks will not be 31 December 2016. set until 2018, with any consequent changes to the pricing framework becoming effective from 2019. The ruling chamber found that the prices proposed for two of the products – compact letters and maxi letters The Bundesnetzagentur's approval of the new letter – were below cost. The chamber determined that the prices is now under judicial review. volumes and hence discounts assumed by the company when calculating its costs were too high, and ruled that the rates be increased so as not to disadvantage competitors.

The ruling is currently being reviewed by Cologne Administrative Court. The main point of appeal is that the prices are based on a business model of consolida- tion applied by a Deutsche Post AG subsidiary. 106 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Review of rates for business parcels Proceedings concluded against the Bundesnetzagentur's rulings Competitors had raised complaints about Deutsche Post DHL's rates for parcels sent by mail order compa- Federal Administrative Court on rates approvals for nies being too low. The rates were – in the competitors' 2003 to 2005 view – below cost, or at least the internal transfer Following a complaint from a postal customer, the prices paid by DHL Vertriebs GmbH for its parent Federal Administrative Court partially annulled the company's services were too low. Business customers' approvals granted in price cap proceedings by the parcels were said to be cross-subsidised by the prices Bundesnetzagentur for Deutsche Post AG's rates from paid in particular over the counter by personal 2003 to 2005. customers, which were above cost. The court's decision is based on the following reasons: The preliminary investigations showed that Deutsche A postal customer is entitled to appeal against a rates Post DHL is the dominant operator in the relevant approval granted under postal legislation in so far as postal market for business parcels and is therefore violation of the customer's rights appears possible. On subject to regulation by the Bundesnetzagentur. The account of its effects on private law the contested rates relevant product market includes standard business approval can violate the customer's personal autonomy parcels up to 31.5kg (B2X) and hence in particular in so far as the customer has actually used the service parcels from mail order companies. The ruling for which the rates have been approved. chamber defines the market as a single national market for business parcels comprising both the B2B and the The guarantee of legal redress requires that the B2C segments. Deutsche Post DHL is the dominant examination of the material requirements for approval operator in this market and is thus subject to regula- in the two-stage price cap procedure should cover both tion under postal law. Yet the investigations ultimately the benchmarking decision in the first stage and the did not find anything to suggest that the prices are in rates approval in the second. The court found the breach of the Postal Act, even when taking a consolida- benchmarking decision of 26 July 2002 – underlying ted look at the costs and revenues for DHL Vertriebs the rates approvals for 2003 to 2005 – to be unlawful. GmbH and for Deutsche Post AG's business parcels A legal error had been made in determining the rate of area. However, the chamber's findings showed that the growth in productivity. In its first price cap procedure transfer prices would need to be increased if Deutsche the ruling chamber – with a view to not imposing too Post AG's specific cost situation and cost increases were much price pressure on actual and potential competi- to be reflected in the transfer pricing system. tors – had enabled Deutsche Post AG to charge higher rates. This action – justified by the regulatory aims of Deutsche Post AG will therefore modify its transfer the Postal Act – conflicted with the statutory require- pricing as from 2015 in line with the chamber's ments. Although the ruling chamber had scope for findings, without calling into question the market and determining the expected rate of growth in producti- transfer pricing system agreed with the European vity, its scope was limited by law. The benchmark of Commission. There will be progressive, moderate the extended costs of efficient service provision, which increases in the transfer prices for business parcels. at the same time formed the content of the prohibition This will ensure that Deutsche Post DHL's prices for of surcharges, had binding character and served not business parcels remain consistent with postal only as a point of reference for the subsequent exami- legislation within and beyond the current assessment nation. The annulment of the rates approvals for 2003 period. to 2005 granted on the basis of the unlawful price cap decision is, however, restricted by the Federal Adminis- trative Court to the legal relationship between the plaintiff customer and Deutsche Post AG.

The assumption that rates approvals can be subjec- tively divided corresponds to judicial decisions on rates approvals granted under telecommunications law.

The Federal Administrative Court's decision made it clear that the postal customer can obtain legal redress against all decisions taken in connection with price cap rates regulation under postal law. RULINGS, ACTIVITIES AND PROCEEDINGS | POST | 107

Submission of Deutsche Post InHaus This was clear from the fact that the company's general Services GmbH's access contracts terms and conditions required customers to pre-sort their mail themselves – which itself constituted a In its judgment of 1 December 2015 Cologne Adminis- partial service – before handing it over to Deutsche trative Court confirmed that the requirement to Post InHaus Services GmbH. The court also made it submit access contracts as laid down in section 30(1) of clear that the relation between Deutsche Post AG and the Postal Act applied not only to Deutsche Post AG as Deutsche Post InHaus Services GmbH did not consti- a dominant parent company but also to its subsidiaries. tute an access service relationship within the meaning Deutsche Post InHaus Services GmbH, as Deutsche of section 28 of the Postal Act but rather a licence- Post AG's "in-house" consolidator, provides services to exempt service provided internally within the com- its customers that are relevant in terms of access, or pany group. The judgment is final. partial, services. By consolidating postal items from various senders Deutsche Post InHaus Services GmbH achieves larger mail volumes which it then delivers directly to Deutsche Post AG's mail centres under the terms of an access contract. These higher volumes qualify Deutsche Post InHaus Services GmbH for larger discounts from Deutsche Post AG than the individual senders delivering their mail to Deutsche Post AG themselves. Deutsche Post InHaus Services GmbH passes on these discounts – minus a charge for processing and transporting the mail – to its custo- mers. In 2012 the Bundesnetzagentur requested Deutsche Post InHaus Services GmbH to present its access contracts with its customers as required by section 30(1) of the Postal Act to enable a review of the market conditions in this segment. Deutsche Post InHaus Services GmbH did not meet this request. In the administrative court proceedings following Deutsche Post InHaus Services GmbH's objection to the request for information, the company stated that it had an access service relationship with Deutsche Post AG but not with its customers.

Cologne Administrative Court made it clear that Deutsche Post InHaus Services GmbH was required to submit the contracts with its customers in accordance with section 30(1) of the Postal Act. According to section 36(2) of the German Competition Act (GWB), Deutsche Post InHaus Services GmbH – as an affiliated company of the dominant company Deutsche Post AG – was also to be regarded as dominant. In addition, it could be assumed that Deutsche Post InHaus Services GmbH – as part of the Deutsche Post AG group – provi- ded access services to its customers, hence the contrac- tual relations constituted access contracts that were required to be submitted.

108 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

In 2015 the European Commission and CEN/TC 331 International cooperation began intensive talks about a further mandate from In 2015 the Bundesnetzagen- the Commission to CEN. The main issues of discussion were e commerce, developing interfaces between post, tur supported digitisation logistics and retail operations, digitisation and automation, and transport security. Since 2015 the in the postal and logistics players have been taking a closer look at the interfaces markets. At European level it between post and logistics. At the centre of digital developments in the retail sector, online retailers promoted the development operate primarily with GS1 standards – part of a globally recognised merchandise information system of open standards. – using standardised parcel labels for cross-border e commerce.

In 2015 a new working party was created within the national body DIN with the objective of standardising the technologies used by delivery staff and addressees to access parcel boxes. The aim is for all authorised courier, express and parcel operators to be able to deposit items in the same parcel boxes for retrieval by the recipients, with optional procedures for processing returns between addressees and parcel service providers. European and international standardisation

The European Commission supports the development of open standards in the postal sector through its ERGP mandates to the European Committee for Standardiza- tion (CEN). Postal standardisation is focused on The Bundesnetzagentur is a member of the European harmonising technical methods at EU level for the Regulators Group for Postal Services (ERGP). The ERGP external measurement of quality of service perfor- facilitates the dialogue between regulatory authorities mance within the universal service and on improving and the development of common positions in joint interoperability between postal industry stakeholders. reports and position papers. One of its main tasks is to A dedicated CEN Technical Committee (TC 331) is advise and assist the European Commission in working on these aims by defining European standards consolidating the internal market for postal services. and technical specifications for postal services. In this context, the ERGP is particularly concerned with the consistent application of the regulatory CEN's working groups comprise representatives of post framework for postal services across all Member States. and logistics companies, courier, express and parcel The Group is composed of the regulatory authorities of operators, online retailers and industry, as well as the EU Member States, the European Economic Area regulatory authorities, professional associations and and EU candidate countries, with the European consumer organisations, all of whom are also members Commission participating as an observer and provid- of the national standardisation body DIN. At national ing secretarial services. Only the representatives of the level the relevant DIN committee was chaired in 2015 EU Member States' national regulatory authorities are by the Bundesnetzagentur. entitled to vote, with each authority having one vote.

The Bundesnetzagentur's tasks include combating In 2015, Lithuania's regulatory authority RRT chaired barriers to market entry for competitors resulting from the ERGP. The 2015 plenary meetings of the Group, non-open standards and promoting transparency in during which fundamental decisions – for instance standardisation and the provision of clear information reports and position papers developed by the various for all competitors in the market. With a view to this working groups – are adopted, took place in Vilnius in second task, the Bundesnetzagentur has supplemented early July and in Brussels in early December. An its website with key information on current standardi- internal workshop to draw up the work programme for sation activities and an up-to-date list of published 2016 was also held the day before the plenary meeting standards. in Vilnius.

INTERNATIONAL COOPERATION | POST | 109

In 2015, the ERGP's work programme was managed by Universal Postal Union four sub-groups dealing with the following issues: (1) accounting and price regulation, (2) universal service In 2015, under the leadership of the Federal Ministry costs/effects of VAT exemption, (3) consumer issues, for Economic Affairs and Energy, the Bundesnetzagen- and (4) cross-border e commerce parcels delivery. The tur contributed to the work of the Universal Postal Bundesnetzagentur and the French regulatory Union (UPU), a UN specialised agency with 192 authority ARCEP jointly chaired the sub-group for member countries that serves as a forum for coopera- cross-border parcels delivery. The ERGP Task Force set tion between postal sector players worldwide. In 2015, up at the end of 2014 to deal with current issues was preparations were made for the Universal Postal primarily concerned in 2015 with analysing the Congress to be held in 2016. possible impact of the judgment of the European Court of Justice (ECJ) concerning the interpretation of Article The Postal Operations Council (POC) strives to enable 12 of the EU Postal Directive (case C 340/13 (bpost)). players to react more quickly to the challenges and developments in the market. In this context the POC The reports and common position papers produced by promotes a seamless and comprehensive postal the sub-groups in 2015 included reports on the network that – by integrating networks, products and development of the universal service obligation, services – will enable players to accommodate the quality of service, consumer protection and complaint changes triggered by digitisation and e commerce handling in 2014, and core indicators for monitoring better than before. Here, the POC assumes that while the market. The ERGP also published a report looking letter volumes in almost all the member countries are at the legal regimes applicable to domestic and declining, parcel volumes are increasing. Its efforts are cross-border e commerce parcels delivery and the therefore directed at speeding up customs procedures extent to which these regimes may coincide or conflict and enhancing a parcels delivery network adapted to with each other. The ERGP Task Force presented a increased security requirements. report on the possible impact of the ECJ's judgment in case C 340/13 (bpost). The UPU believes that the growth in e commerce may lead to changes in what is required of the universal In addition, in the second half of 2015 the ERGP and service, which in turn may necessitate changes to the the Body of European Regulators for Electronic international regulatory framework. Communications (BEREC) produced a joint opinion on price transparency and regulatory oversight of In the context of the universal service, quality and cross-border parcels delivery. The Bundesnetzagentur costs are set against each other. One question to be acted as the ERGP Chair of the joint expert working considered here is whether all parcels need fast delivery group. The joint opinion was delivered following two or whether slower and cheaper but still reliable working group meetings and a joint internal workshop delivery would also be an option. aimed at facilitating dialogue between the telecommu- nications and postal regulation sectors in the context In 2015 proposals were discussed with a view to of the digital internal market. reshaping the UPU in terms of accelerating voting procedures, defining responsibilities more clearly, and Further information on the ERGP's reports and streamlining structures by reducing the number of consultations is available at working groups. This means the UPU will be facing http://ec.europa.eu/growth/sectors/postal-services/ergp/ index_ significant challenges in the coming year. Decisions on en.htm. the proposed reforms are expected at the Universal Postal Congress in 2016.

EISENBAHNENRAIL

Rail and Competition In the course of numerous individual proceedings, the Bundesnetzagentur has specified and improved the frame- work for competition in the railway sector. It has objected to a number of rules and arrangements for the use of the DB Netz AG rail network – and has ordered adjustments in the track access charging system with a view to the future calculation of the costs.

Inhalt Inhalt Marktentwicklung 00 VerbraucherschutzMarket watch und -service 11200 Entscheidungen,Rulings, activities Aktivitäten, and proceedings Verfahren 11600 InternationaleInternational cooperation Zusammenarbeit 12200 The Bundesnetzagentur works to increase competition in the railway sector. To accomplish this, it monitors the railway sector to ensure that competitors are able to use the railway system on fair terms and at reasona- ble prices.

The share held by competitors in the rail freight transport segment continued to grow in 2015 and is likely to have since reached 36%. The share of the short-distance passenger transport sector held by competitors has also developed positively. Deutsche Bahn AG (DB AG) undertakings accounted for approxi- mately 84% of traffic volume in 2010. This figure fell to only 79% in 2015. At more than 99%, Deutsche Bahn AG undertakings continue to handle most of the traffic EISENBAHNEN in the long-distance transport segment. However, several enterprises have announced that they will be entering the market in the long-distance segment in 2016. 112 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015 112 | BUNDESNETZAGENTUR| ANNUAL REPORT 2015

112 | BUNDESNETZAGENTUR| ANNUAL REPORT 2015

AAtt 1 115bn15bn t otonnenne k ikilometreslometres (tk (tkm),m), tra trafficic volum volumee in th ein the Market Mark ewatcht watch rail freight segment in 2015 is expected to have rail freight segment in 2015 is expectedf� to have increased slightly over 2014, extending the positive 112 | BUNBDEundSNETZAeGEsNTnURe| tzANNaUAgL eREnPOtRTu 2015r surveys increasedAt 115bn tslightlyonne kil oovermetr 2014,es (tk mextending), tra ic vo thelum positivee in the Bundesnetzagentur surveys trend observed in this segment in recent years. The Market watch trendrail fr eobservedight segm inen tthis in 2 segment015 is exp inec trecented to h ayears.ve The traf- of market players show that tra ic volume attributable to Deutschef� Bahn AG’s ficin crvolumeeased s lattributableightly over 2 0to14 Deutsche, extendin gBahn the p oAG’ssitiv ecompeti - of marketBundes nplayersetzage nshowtur su thatrvey s competitors rose to 38% of the rail freight market in trf�end observed in this segment in recent years. The the situation in the railway 20tors15 rose. to 38% of the rail freight market in 2015. theo situationf market pinlay theers railway show tha t At 11t5rabni tco vnonleum kielo amttertirbeuts a(btklem t)o, tDraeutics cvhoel umBahen in A tGh’es Mmarkarkete wt ahatcsh i mproved rail frceoimghpte steitgomrse rnot sien t2o0 3185% is oefx tpheec tredail tfore higahvet market in Comf�petition in the rail freight segmf� ent marketthe s hasitua tiimprovedon in the rslightly.ailway increa20se1d5 .s lightly over 2014, extending the positive Bundslighestlny.e tzThaigse isn tpuarr sticuruvleayrlsy By traffic volume, percentage shares trend observed in this segment in recent years. The Thism isark particularlyet has impr otheved case in 114 114 115 oft mhea rckaeset pinlay seegrms sehnotws t thahatt tra i108cC voom lumpetieti aottnr iinb utthaeb rla111ei lt ofr eDieguthts s113cehgem Beanhtn AG’s segmentsslightly. that This areis p aregulatedrticularly compBeyt ittroarffisc r voolsuem toe ,3 p8e%rce ontfa tghee s rharile sfr eight market in the situation in the railway f� 2 2 3 3 3 3 are regulated by the 2015. 114 114 115 the case in segments that 108 111 113 bym Batherkunde Bundesnetzagentur.te hasnse itzmpagreonvteudr . are regulated by the Compe2tition in th2e rail freig3ht segmen3t 3 3 slightly. This is particularly By traffic volume, per centage sha res 7 7 7 6 6 6 Bundesnetzagentur. 114 114 115 the case in segments that 108 111 113 Key trends 7 2 7 7 6 6 6 arAes irn eg2014u, rleavetneued fr obm ylo ntg-hdiesta nce passenger 2 3 3 3 3 2010 2011 2012 2013 2014 2015e transport is expected to stagnate again in 2015. Key trends BundRevenuees frnome rtzegioangal epanssetnugerr .t ransport, including As in 2014, revenue from long-distance passenger public compensation payments, is expected to have 2010Sh are o2011f com petito2012rs Sha2013re of feder2014ally ow ne2015ed RUs transport is expected to stagnate again in 2015. 7 7 increased slightly in 2015, continuing the trend seen in 7 6 6 6 Revenue from regional passenger transport, including Key trends2014. It is assumed that revenue in the rail freight Share of competitors Share of federally owned RUs Key tpreundblisc compensation payments, is expected to have Competition in the long-distance passenger transport segment As int 2014,ransp orevenuert segme fromnt also long-distance increased in 20 passenger14 and 201 5. It increased slightly in 2015, continuing the trend seen in By traffic volume, percentage shares As icna 2n0 g14en, erreavlleyn ube fsraoidm t lhoantg a-lld issetagnmceen ptsa sshaevneg seer en transport is expected to stagnate again in 2015. 2010 2011 2012 2013 2014 2015e trans20po1rt4 i. sI te ixsp aescstumed edto sthtaagtn raetvee anguaein in in t h2e0 r15ai.l freight Revenuevirtu fromally co regionalntinual gr passengerowth over atransport, period of iincludingve years. Revetnruaen sfrpoomrt rseeggiomneanlt p aalsssoe ingcreear tsredan sipno 20rt,1 i4n calnud i2n0g1 5. It Competition in the long-distance passenger transport segment public compensation payments, is expected to have B

increasedincrReaveivsretudnu slightly aslleliy gd htceovlneytl oiininp u m22015,a0el1 ngr5t ,o ic nwcontinuingo tthnhte ion rvuaeilnrw gaa thpy e ether iotred trendn odf sieeve nseen y iean r sin . market 99 99 99 99 99 99 2014.201 4It. Iist i sassumed assumed that that rrevenueevenue i nin t hthee ra railil fr efreightight By type of transport � <1 <1 <1 <1 <1 <1 Competition in the long-distance passenger transport segment transporttran€sbRpneo vret segment nusegem devnet l aoalsolpsmo ie nincreasedncrt iean tshede rina ini l20w 2014a1y4 an andd 20 2015.15. It It By traffic99 vol ume, perc99en tage share99s 99 99 99 canca ngenerally gmenaerrkaellt y bebe saidsaid tthathat a allll s esegmentsgments ha haveve see seenn virtuallyvirtuaBllyy t continualycpoen toinf utraaln gr sgrowthpoowrtth 18 o.v 6overe r a p ae 18rperiodio.7d of iofv1 e 9five y.0ea r years.s. 1 9.2 €bn 117.7.9 1717..1 <1 <1 <1 <1 <1 <1 � 2010 2011 2012 2013 2014 2015e 4.7 4.8 5.0 5.5.1 Revenue develop 4m.7e nt in the railway 1 9.2 4 .3 18.6 18 .7 1 9.0 99 99 99 99 99 99 market 117.7.9 Share of federally owned Share of competitors 1717..1 By type o f transport 4.4.1 4.4.0 44..0 4.4.0 2010 railw2011ay und ertak2012ings 2013 2014 2015e 3 .7 3.8 4.7 4.8 5.0 5.5.1 €bn 4 .3 4.7 At 37bn paSsshaerneg oefr f keidloermalleytr owes n(pekdm ) tShhea rtera onfs cpoomrtp voetiltumorse 4.4.1 4.4.0 44..0 1 9.2 4.4.0 railway undertakings 3.7 9.4 3.8 18.6 9.8 18.7 9.9 1 9.010.0 10.0 in the long-distance passenger transport segment in 9.1 117.7.9 1717..1 in 2015 increased slightly over the previous year. 2010 2011 2012 2013 2014 2015e 4.7 4.8 5.0 5.5.1 At 37bn passenger kilometres (pkm) the transport volume Once again, the vast majority of the transport services 4.7 4 .3 9.4 9.8 9.9 10.0 10.0 in the long-distance passenger transport segment in 9.1 2015e – morSeh tahraen o 99f fe%de –r awllay sow prnoevidd edS bhya rDee ouft sccohmep Beatihtonr s 2010 2011 2012 2013 2014 in 2015 increased slightly over the previous year. 4.4.0 railway undertakings 4.4.1 4.4.0 44..0 (DAtB 37bn AG) u passengerndertaking skilometres. DB AG's co (pkm)mpetit others a transportccounted 3 .7 3. 8 Once again, the vast majority of the transport services for less than 1% of the total. Looking at the domestic volume – more t hina nthe 99 %long-distance – was provide passengerd by Deuts ctransporthe Bahn 2010 Frei2011ght tr ansp2012ort 2013 2014 2015eA t 37trabn ipc amssaernkgeet,r n koinloem oef tDeresut (spckhme )B tahhen t rAaGn’sp coortm pvoetlumito res

segment(DB AG) uinnde 2015rtak increasedings. DB AG slightly's compe overtitors the acc opreviousunted 9.1 9.4Lo ng-dista9.8nc e passe9.9nge r tran10.0sport 10.0 in thpero lovnidge- dai sgrtaenacte rp naumssebnegre ro ft rtarnaisnp omrovt semgmenentst einv ery day year.fof�r le ssOnce than again, 1% of thethe tvastotal. majorityLooking a tof th thee do transportmestic in 20o1f 5th ien cryeaears oend as lpigrhto liyt- ovmaekri nthge b parseisvio. Tuhse yeeantr.er prises Freig ht transpo rt servicestra ic m a–r moreket, no thanne of 99%Deut s–c hwase Ba providedhn AG’s co bymp Deutscheetitors Regional passenger transport (incl. public Oncede argsacihnn, tehllez uvga.sdet m GamjobrHit ya nodf t Lhoec tormanosrpeo Grtm sbeHrvi &c eCso KG co Lmopnegn-dsiastitaonnc pea pyamsseenntgs)e r transport Bahnprovi d(DBe a grAG)ea tundertakings.er n�umber of tra DBin m AG'sovem competitorsents every da y 2010 2011 2012 2013 2014 2015e – mohraev tef�h aannn 99ou%nc –e dw tahsa pt rthoeviyd wedill b bye De enuttesrcihneg Bahn (DB accountedAoGf )th uen ydeearrt aforoknin a lessg ps.r Do thanBit -AmGa' s1%k cino gmof bp atheestiist. o total.Trsh ea cce nLookingotuenrptedris es at the Regional passenger transport (incl. public for ledess rtshcahnn 1ell%z uogf .tdehe G tomtbalH. L aoondk Linogc oamt tohree d GommbeHst i&c Co KG compensation payments) domestic traffic market,� none of Deutsche Bahn AG’s Freight transport tra ihc amvaer aknnet,o nuonnce do ft hDeatut thsecyh ew Billa hbne AenGt’se rcionmg petitors competitors provide a greater number of train move-

Long-distance passenger transport provide a greater number of train movements every day 1 Annual figures marked with an “e” are estimated values. It is not possible to determine f�ments every day of the year on a profit-making basis. the actual values at the present time. of the year on a pro it-making basis. The enterprises The enterprises derschnellzug.de GmbH and Locomore Regional passenger transport (incl. public derschnellzug.de GmbH and Locomore GmbH & Co KG GmbH & Co KG� have announced that they will be 1 Annucalo fimgurpese mansraketido wnith p aan y“em” aeren etssti)m ated values. It is not possible to determine have announced that they will be entering the actual values at the present time. entering the market next year, starting March 2016 and September 2016 respectively. In addition, RDC 1Annual figures marked with an “e” are estimated values. It is not possible to determine the actual values at the present time.

1 Annual figures marked with an “e” are estimated values. It is not possible to determine the actual values at the present time.

MARKET WATCH| RAIL | 113

MARKET WATCH | RAIL | 113 MARKET WATCH| RAIL | 113

the market next year, starting March 2016 and DB AG undertakings accounted for some 84% of the September 2016 respectively. In addition, RDC relevant traffic in 2010, but by 2015 they were DeutschlandDeutschlandthe market next GmbH year, (Railroad(Railroad starting DevelopmentDevelopment March 2016 and Corpora - DBcontributing DB AG AG undertakings undertakings only about accountedaccounted 79%. One for reason some 84%for the of of thethe tionCorporationSeptember Deutschland 2016 Deutschland GmbH)respectively. plansGmbH) In to plansaddition, offer tocar offer RDCtrain car relevantcompetitors’relevant traffic traffic increasing inin 2010, butsharebut by by of2015 2015 transport they they were were volume contri was- servicetrainDeutschland service to and to GmbHfrom and thefrom (Railroad island the island ofDevelopment Sylt. of Sylt. butingthecontributing launches only about ofonly the about79%. enterprises One 79%. reason One Vlexx, reason for a thesubsidiary for competitors’ the of Corporation Deutschland GmbH) plans to offer car increasingRegentalbahn,competitors’ share increasing the of NEB transport Betriebsgesellschaft share volume of transport was the volume and launches the was Competitiontrain service in to the and regio fromnal the pass islandenger of Sylt. ofHessischethe the launches enterprises Landesbahn of the Vlexx, enterprises, which a subsidiary took Vlexx, over ofa subsidiary Regentalbahn,DB AG of transport segment thetransportRegentalbahn, NEB Betriebsgesellschaft services. the NEB Betriebsgesellschaft and the Hessische and the BCompetitiony traffic volume, in the percentage regional pass sharesenger Landesbahn,Hessische Landesbahn which took, which over DBtook AG over transport DB AG

transport segment services.Markettransport assessment services. By traffic volume, percentage shares

18 19 19 MarketMarket assessment assessment 17 21 In the annual survey of the factors influencing the 16 In the annual survey of the factors influencing the railway market, railway undertakings (RUs) were 18 19 19 railway market, railway undertakings (RUs) were 17 21 In the annual survey of the factors influencing the 16 invitedinvited toto assessassess the the categoriescategories listed listed in in thethe chartchart by railway market, railway undertakings (RUs) were givinggiving a rating between 1 and 5. 1 standsstands forfor "excellent""excellent" invited to assess the categories listed in the chart by 84 83 82 81 81 79 andand 55 means means “inadequate”“inadequate”. giving a rating between 1 and 5. 1 stands for "excellent" 84 83 82 81 81 79 and 5 means “inadequate”. AccordingAccording to the RUs,RUs, the situation inin thethe railway railway

marketmarket hashas improvedimproved slightly.slightly. The average rating According to the RUs, the situation in the railway 2010 2011 2012 2013 2014 2015e improved,improved, fromfrom 2.8 toto 2.7.2.7. One One reasonreason forfor thisthis isis thethe market has improved slightly. The average rating improvedimproved ratingsratings inin thethe categories “tariffs“tariffs andand sales”,sales”, Share of competitor Share of federally owned RUs improved, from 2.8 to 2.7. One reason for this is the 2010 2011 2012 2013 2014 2015e “access“access to to service service facilities” facilities” andand “access“access to to tracks”.tracks”. TheThe improved ratings in the categories “tariffs and sales”, AtAt 54bn54bn passenger passenger kilometres, kilometres, traffictraffic volume in the ratingsratings forfor networknetwork qualityquality and scope and for the Share of competitor Share of federally owned RUs “access to service facilities” and “access to tracks”. The regionalregional passengerpassenger transporttransport segmentsegment in 2015 re- customercustomer friendlinessfriendliness of infrastructure managers managers (IMs) (IMs) At 54bn passenger kilometres, traffic volume in the ratings for network quality and scope and for the mainedremained constant, constant, as as it didit did in in the the previous previous year. year. Traffic Traffic improvedimproved againagain overover thethe previousprevious year.year. regional passenger transport segment in 2015 customer friendliness of infrastructure managers (IMs) volumevolume inin this segment has however increased by more remained constant, as it did in the previous year. Traffic improved again over the previous year. thanthan 30%30% over over a a ten-year ten-year period. period. The The shareshare of of thisthis volume in this segment has however increased by more marketmarket heldheld byby competitorscompetitors has also developeddeveloped in a than 30% over a ten-year period. The share of this positivepositive directiondirection in 2015. market held by competitors has also developed in a positive direction in 2015. Factors influencing the railway market

Based on averaged ratings of 1 (excellent) to 5 (very poor) Factors influencing the railway market Based on averaged ratings of 1 (excellent) to 5 (very poor) IMs’ customer friendliness 2. 2.3

IMs’ customer Access friendliness to tracks 2.2.3 2.52.3

Access to service facilities 2.4 2.6 Access to tracks 2.3 2.5 Non-discriminatory Access tocharging service systems facilities 2.42.6 2.82.6

Non-discriminatory charging Averagesystems 2.62.7 2.8

Availability of resources Average 2.72.8 2.92.8

Price-performance Availability ratio of of resources the IMs 2.83.0 3.02.9

Price - performance Network quality ratio andof the scope IMs 3.0 3.13.0

Network quality Tariffs andand scopesales 3.0 3.3 3.53.1

International Tariffs and access sales 3.3 3.33.5

International access 3.3 3.3

Not regulated by the BNetzA Regulated by the BNetzA Average from previous year

Not regulated by the BNetzA Regulated by the BNetzA Average from previous year 114 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

114 | BUNDESNETZAGENTUR| ANNUAL REPORT 2015

Average track access charge of IMs Indexed; 2010 = 100

114.3 113.3 113.2

107.1 104.7

100.0

2010 2011 2012 2013 2014 2015e

Consumer price index Producer price index Rail freight Long-dist. Regional passenger passenger transport transport

Infrastructure access charges Since 2010 the average station usage charge (railway Between 2010 and 2015, the consumer price index and undertakings pay station usage charges to Infrastructure access charges the producer price index for industrial products rose infrastructure managers for the use of their train Between 2010 and 2015, the consumer price index and Since 2010 the average station usage charge (railway by 4% and 7% respectively, while track access charges platforms and stopping points) increased by more than the producer price index for industrial products rose by undertakings pay station usage charges to infrastruc- increased by some 13% in the freight transport and 12%. This rate of increase is also significantly higher 4% and 7% respectively, while track access charges ture managers for the use of their train platforms and regional passenger transport segments and by more than the increases seen in the consumer price index increased by some 13% in the freight transport and stopping points) increased by more than 12%. This rate than 14% in the long-distance passenger transport and the producer price index for industrial products. regional passenger transport segments and by more of increase is also significantly higher than the segment. than 14% in the long-distance passenger transport increases seen in the consumer price index and the segment. producer price index for industrial products.

114 | BUNDESNETZAGENTUR| ANNUAL REPORT 2015 Average station usage charge of IMs Indexed; 2010 = 100

Average track access charge of IMs 112.5 Indexed; 2010 = 100

107.1114.3 113.3 104.7113.2

100.0 107.1

2010 2011 2012 2013 2014 2015e 104.7

Consumer price index Producer price index Average station usage charge

100.0

2010 2011 2012 2013 2014 2015e

Consumer price index Producer price index Rail freight Long-dist. Regional passenger passenger transport transport

Infrastructure access charges Since 2010 the average station usage charge (railway Between 2010 and 2015, the consumer price index and undertakings pay station usage charges to the producer price index for industrial products rose infrastructure managers for the use of their train by 4% and 7% respectively, while track access charges platforms and stopping points) increased by more than increased by some 13% in the freight transport and 12%. This rate of increase is also significantly higher regional passenger transport segments and by more than the increases seen in the consumer price index than 14% in the long-distance passenger transport and the producer price index for industrial products. segment.

Average station usage charge of IMs Indexed; 2010 = 100

112.5

107.1 104.7

100.0

2010 2011 2012 2013 2014 2015e

Consumer price index Producer price index Average station usage charge

MARKET WATCH| RAIL | 115

MARKET WATCH | RAIL | 115 Opera ting results of the railway undertakings Specific results of RUs in the long- Compared to 2013, the railway undertakings saw their distance passengeMAr sReKgEmT WeAnTtC H | RAIL | 115

r even ues fall off in all transport service segments. Cents per pkm MARKET WATCH| RAIL | 115 MARKET WATCH| RAIL | 115

Operating results of the railway undertakings M easured in terms of passenger kilometres, the long- Operating results of the railway undertakings Specific results of RUs in the long- Compared to 2013, the railway undertakings saw their dist anceC opmaspsaerendg etor 2tr0a1n3s, pthoer tr asielwgmaye unnt dererptaokritnegds asnaw a vtheerairg e distance passenger segment revenues fall off in all transport service segments. operaOtipnregrv aretiennsuuge ltsr e foasufll l0ots.f5 fo 0ifn ct ahellen ttrr apailnewsrp apoyar undst ssenrevirgtakecer iskneiglgosm m eenttrse. in CSepnetcsi fipce re pskumlt s of RUs in the long- Operating results of the railway undertakings Specific results of RUs in the long- C ompared to 2013, the railway undertakings saw their distance passenger segmen t 20C1o4m, ap asrliegdh tloy 2 lo0w13e,r t hoep erraailtwinagy ruensdeultr tahkainn gins s2a0w1 3th. eIinr diCsteanntcs ep epra spskemn ger segment Measuredre invMeea ntermsuseusr edfa ll ofi no ftpassengerfe rinm asll o tf rpaanss skilometres,peonrgte sr ekrivilocmee s ttheeregsm, tlong-ehnet slo. ng- there rveegniounesa lf aplla sosffe ning aellr ttransport sergvimceen st,e gthmee anvtes.r age Cents per pkm distance passengerdistance p atransportssenger tra segmentnsport seg mreportedent repor anted an average averageoper operatingaMtieanopgse rurerasedtiunlt giresultn wr teeasrusm lt1 s.ofo3 of8 0f0.50 p.c5ea0ns sct ecentsn ptg eeprre per rpk apilssao spassengermesenentgrgeeersr , k ktihilloe mloenttgrre-e in 0.67

Meadsisu20traed1n4c ,ei na p staleisgrsmhetnslyg o elfor pw tareasrns oespnegoreratrt sikneiglo mrmeesenuttlrt r eteshp,a tonhr ietne l d2o 0na1gn3- a . v Ienr a ge kilometretravell edin, 2014,also le as sslightly than in lower2013 w operatinghen the op resulteratin g result distance passenger transport segment reported an average 0.50 was 1o.5pt1ehr eca ertniengtgsio rpneeasrlu ppltak somsfe 0.n T.5ghe0re c treranintl wsppeaoryr pt u asnessdegemnregtnaet,rk itknhilgeo sam vretrpraoegr eitn e d than in 2013. In the regional passenger transport ope20rao1tpi4ne,g ra ar tseilnsigugh ltrte loysfu llt0ow .5we0ar sc oe1pn.3et8 rp aceteirn ptgsa rpseseserun pltga etsshra ekni lgioenmr 2 ke0itl1ro3em .i e nItn r e 0.67 segment,an ave therag eaverage loss of 0 operating.07 cent pe resultr tonn ewas-km 1.38 in th centse rail freight 201t4h,et ra ra esvlgeiiogllhedntal,y la plosaows sleersn sog tephrea rtnra aitninn s2gp0 or1er3ts wuselhtg etmnh aethnet, i n oth p2e0 ra1avt3ie.n r gaIn gr e s ult 0.24 transport segment. In 2013 the average result per tonne- 0.50 per passengerthe rewgioas n kilometre1a.5l 1p acsesnetsn gp etravelled,r tprkamn.s Tphoer also tr saeilgw mlessaye nu t,nthan dethret a inkvien r2013gasg ree p orted operating result was 1.38 cents per passenger kilometre 0.67 whenkm othe pwear operatingsaa t0nin. 1agv1 re ecraesugneltt .resultl wosass o 1f .0was3.087 c ce 1.51enntst p centseerr t poannss peree-nkmg pkm.e irn k tihlo eThe mraeilt rfree ight travelled, also less than in 2013 when the operating result 20120.24 0.672013 2014 transport segment. In 2013 the average result per tonne- 0.50 railwaytra undertakingsvweallsed 1.,5 a1ls coe nletsss preported tehra pnk imn .2 T0 anh1e3 r averagewaihlwenay t hu enloss deopre tofraak ti0.07innggs r r eespuoltr ted Average result per pkm 0.50 wasa n1k .a5mv1 ew creansg et0s .l 1op1se scr e opnfk t0.m .0.7 T cheen rta pilewr atoynn unede-kmrt aink itnhges rraeipl forretiegdh t cent per tonne-km in the rail freight transport 20120.24 2013 2014 an atrvaenrsapgoer lto sesg omf e0n.0t.7 Icne 2n0t 1p3e rt htoenn avee-rkamge i rne tshuelt rpaeilr ftroenignhet- Average result per pkm segment. In 2013 the average result per tonne- 0.24

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1.51 1.51 1.38 1.18 1.38 1.18 2012 2013 2014 2014 (second half-year) 2015 1.51 1.38 1.18 MAvitterlaegrees r Eesrgueltb pneisr jpek Pmkm Traction current only from DB Energie

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TTrraction current nott oonnllyy ffrroomm D DBB E Enneerrggieie 116 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Rulings, activities Track access and proceedings Network Statement 2017 The Bundesnetzagentur objected to several of the In the course of numerous proposed amendments to DB Netz AG's network statement for 2017 (SNB 2017) on 16 November 2015. individual proceedings, the This objection particularly concerned the planned Bundesnetzagentur has deletion of provisions governing trial operations. Test runs, for example, are necessary for testing new, yet specified and improved the unauthorised rolling stock under real operating conditions on the railway network operator’s infra- framework for competition structure. DB Netz AG plans to publish these provisions in the railway sector. This only on the internet in future. Since this information is mandatory and must be included in all network applies not only to access to statements, the Bundesnetzagentur objected to the planned deletion. Should the provisions be published tracks and to service facili- only on the internet in future, equal treatment of the ties but also to infrastructure parties with access entitlements would no longer be ensured. Further, the provisions could be amended at access charges. any time and at short notice. DB Netz AG has filed an appeal against the notice issued by the Bundesnetz- agentur.

Operations and Engineering Works working party In recent months the Bundesnetzagentur has received several complaints from parties with access entitle- ments regarding construction works. These parties reported on various problems regarding how DB Netz AG has organised and carried out construction works to date. The Bundesnetzagentur set up a working party with interested railway undertakings, regional transport authorities and representatives of DB Netz AG with the aim of optimising the flow of the const- ruction work. One reason for many impediments is that the process workflows at DB Netz AG have to be further optimised in order for, for example, construc- tion projects to be coordinated better and at an earlier point in time. This also includes a better and more detailed presentation of planned construction mea- sures and their impact on the railway undertakings’ individual trains. DB Netz AG plans to completely restructure its IT systems by 2020. This should solve many of the identified problems. In the meantime, smaller enhancements are being implementing in the IT systems on an ongoing basis and will bring about some improvement. The working party’s findings and the individual steps for optimising the processes will be published. RULINGS, ACTIVITIES AND PROCEEDINGS | RAIL | 117

Results of the Dispatching Rules working party The Bundesnetzagentur additionally raised objections In response to complaints, the Bundesnetzagentur to a total of 19 planned train path rejections and discussed DB Netz AG’s dispatching rules in a working turned down the objections that a party with access party with the DB Netz AG and parties with access entitlement filed against the allocation process. As entitlement. Dispatching organises the order of train things presently stand, the Sylt train service will be on movements when it is necessary to deviate from the the Bundesnetzagentur’s work agenda beyond the year regular timetable due to delays or breakdowns. The 2015 and will pose new regulatory challenges for the focus here was on the rule that provides for faster Bundesnetzagentur particularly as a result of the new trains taking precedence over slower trains. Some competition in the car train service segment. undertakings criticised that as a result of this, delayed long-distance trains are frequently given priority over Congestion proceedings regional trains which had been punctual prior to this Traffic density in Germany’s railway network is very time. This can lead to missed connections and penalty high in some areas; this has led to numerous declara- payments to the regional transport authorities. tions of congestion. Congestion affects ever greater portions of the DB Netz AG track network. In 2015, the The working party agreed that this was necessary for planned congestion proceedings focused particularly operational reasons but noted that the application of on the lines Cologne-Mülheim – Dortmund and this rule could be improved in individual cases. In Mannheim-Waldhof – Frankfurt – Zeppelinheim future DB Netz AG schedulers are to consider allowing (“Riedbahn”). Both lines are amongst the most impor- exceptions to the rule more often, particularly when tant rail links in the German railway network. exceptions would lead to greater overall train punctua- lity within the network. DB Netz AG has subsequently The proceedings for the Rhine-Ruhr line were complet- revised its dispatching rules. ed with the drafting of a plan to increase rail infra- structure capacity. Although the level of congestion is Train service to Sylt currently quite high and leads to significant delays The Bundesnetzagentur was involved in the allocation every day, the infrastructure measures proposed by DB of railway infrastructure capacity for train service to Netz AG are rather small in scope. DB Netz AG cites and from Sylt in 2015. This first involved framework plans to expand the line for the Rhine-Ruhr-Express agreements for the framework timetable period from (RRX) in the medium to long term as the reason for 2016 to 2020, then the train paths scheduled for the this. It would however be possible to carry out short- 2016 annual timetable and finally the train paths in the term measures such as the construction of a crossover non-scheduled train services segment. Questions and in Mülheim-Heißen. But since realisation of this latter legal disputes concerning the allocation of limited project depends on the commissioning of the Elec- railway capacity had to be clarified, particularly in tronic Railway Control Centre in Duisburg, it cannot be light of the market entry being planned by a second undertaken until the year 2020. Although electronic provider of car train service between Niebüll and railway control centre technology theoretically makes Westerland (Sylt). Due to the single-track sections of it possible to improve network performance, the strict this line it was not possible to implement all frame- IT specifications and high costs also ensure that work work agreement requests or train path requests for the to expand and upgrade the network proceeds very 2016 working timetable and outside the timetabling slowly and at considerable expense, even when it process. involves what are essentially less extensive individual measures (such as, in this case, the installation of two In this connection, the Bundesnetzagentur decided switches). that framework agreements could be concluded for a maximum of two time windows per hour and per The parallel line that runs to the north through the direction to and from Westerland, Sylt. A total of 39 Ruhr area from Oberhausen to Gelsenkirchen and periodic and four non-periodic framework agreement Herne also does little to reduce congestion. time windows were agreed for each direction for this The congestion on the Riedbahn line between Mann- train service which would primarily serve regional heim and Frankfurt is even more problematic than on passenger rail transport purposes. In addition, the Rhine-Ruhr line. The Riedbahn line has also framework agreements for DB AG long-distance trains reached the limits of its capacity and allows only a few to Sylt and, for the first time, framework agreements additional train paths every day for non-scheduled rail for a competitor (RDC Deutschland GmbH) in the car services. In addition to possibilities for smaller-scale train service segment were concluded. operational improvements, signal blocks could be set more closely to one another to increase capacity and 118 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

improve the quality of operations. A significant Ruling on the question of whether trimodal terminals long-term reduction in congestion will come only with are subject to mandatory regulation the construction of the planned high-speed route In 2013 the Bundesnetzagentur obligated Duisburg between Mannheim and Frankfurt. Intermodal Terminal GmbH (DIT) to draft a network statement for the service facilities it operates for the Access to service facilities transhipment of containers. Conflicts over access to service facilities The Cologne Administrative Court dismissed a Infrastructure managers are required to make complaint filed by DIT in this regard because services corresponding proposals – when possible – for all related to railway operations are offered in the requests to use service facilities that parties with access terminal. According to the court, the fact that infra- entitlement submit. Some infrastructure managers, structure also serves other modes of transport does not such as DB Netz AG, use a formal procedure with a set restrict the definition of a service facility. Parts of a deadline to process requests for the next working complex can also be subject to rail regulation. timetable period. When infrastructure managers determine in the course of processing requests that An appeal has been filed against the ruling. Other requested uses overlap they negotiate with the parties litigation is also ongoing with operators of trimodal concerned to find a solution. When a conflict cannot be freight terminals which will be taken up again in the resolved in this way, the infrastructure managers then wake of the ruling that is expected in 2016. apply the priority rules in accordance with their respective network statement for service facilities. Use of the service facilities for loading cars for the Sylt Shuttle The Bundesnetzagentur has the right to review and, if According to rulings of the Federal Administrative need be, object to rejections planned by the infrastruc- Court, DB Fernverkehr AG must grant non-discrimina- ture managers. This is also the case when rejections are tory access to the loading ramp of the Sylt Shuttle. The to be issued even when there is no conflict at hand. question remains unanswered whether this also applies to the asphalted areas in front of the loading In the case of the 2016 working timetable, DB Netz AG ramps. DB Fernverkehr AG argues against this, whereas and DB Fernverkehr AG have notified the Bundesnetz- the Bundesnetzagentur views these areas as a neces- agentur that they plan to reject a total of 54 requests for sary part of the entire loading facility. In order to using infrastructure during the 2016 working time- achieve a timely solution, DB Fernverkehr AG and the table. In nine out of a total of 11 conflicts reported by Bundesnetzagentur signed a contract under public law. DB Netz AG the highest bid decided which request was This contract is valid for one year. to be given priority. The other intended rejections were based on other priority rules in DB Netz AG’s network During this time, the contract will ensure that driving statement. The Bundesnetzagentur did not object to DB on and driving off is unhindered and establish legal Netz AG’s planned rejections in any of these cases. security for competitors in this respect.

The facilities operated by DB Fernverkehr AG in Niebüll and Westerland include Sylt Shuttle ramps that are needed to load vehicles onto railway cars. Conflicts in this connection arose for the first time. In 24 cases, the party with access entitlement had not previously signed an agreement concerning a corresponding train movement. The Bundesnetzagentur did not object to the rejections that were based on this. In the remaining 19 cases, however, the Bundesnetzagentur rejected the planned decision to refuse use solely on the grounds of the applicant’s failure to submit a safety certificate. RULINGS, ACTIVITIES AND PROCEEDINGS | RAIL | 119

Decision regarding the shippers’ right of access Deutsche Umschlaggesellschaft Schiene-Straße mbH The Bundesnetzagentur reviewed the first draft of BLG (DUSS) wanted to exclude all companies wanting to Autoterminal Bremerhaven GmbH & Co.’s network have freight shipped by railway undertakings (ship- statement for service facilities and the changes in pers) from the right to conclude contracts concerning Bremische Hafeneisenbahn’s (BHE) network statement freight handling in railway terminals and to grant this as well. It coordinated both network statements in right exclusively to railway undertakings. consultation with the two undertakings to ensure that due account was taken of the reciprocal deadlines for The Federal Administrative Court confirmed the the allocation of capacity and the development of the Bundesnetzagentur’s ruling that shippers are entitled working timetable, thus ensuring that traffic between to conclude this type of contract themselves. The the port railway and terminal is as smooth as possible. Federal Administrative Court handed down a parallel decision regarding railway infrastructure. According to Infrastructure access charges this decision, shippers are entitled to conclude con- Review of DB Netz AG's track access charging system tracts with DB Netz AG regarding track usage them- for 2011 selves. The Bundesnetzagentur concluded its review of the level of charges in DB Netz AG’s 2011 track access The question of who concludes the contracts for the charging system with the determination that the level use of freight terminals is important for the function- of its charges were in line with railway law. The ing of logistics chains. Freight forwarders and opera- Bundesnetzagentur additionally conducted an tors have overall responsibility vis-à-vis their custo- extensive review of the costs that DB Netz AG incurs mers for ensuring that freight is delivered reliably and for the operation of the railway network plus a normal on time. This key role is better served when the shipper market return. In this connection, the Bundesnetz- is the party that has a contract with the terminal agentur issued a notice requiring DB Netz AG to make operator. its calculations and presentation of the costs more transparent. It was found that the allocation of costs Reviews of network statements for service facilities and revenues and the allocation of assets and financial in 2015 resources are not completely transparent. Differences In 2015 the Bundesnetzagentur reviewed planned were also apparent in how DB Netz AG and the changes in DB Netz AG’s network statement for service Bundesnetzagentur assessed some of the individual facilities. It objected to the planned deletion of cost positions and balance sheet items. For this reason, procedural requirements and other requirements for the Bundesnetzagentur ordered adjustments in the trial runs from the network statement. calculation of the costs in order to avoid possible future violations of railway law. DB Netz AG has filed an Trial runs are necessary for testing new, yet unautho- objection to these orders. As a result the notice that was rised rolling stock under real operating conditions. issued is not yet final. Regardless of this, DB Netz AG They are important for stimulating competition and and the Bundesnetzagentur began holding working- making it easier for new railway undertakings to enter level meetings toward the end of the year in order to the market. This provision must continue to be a coordinate in detail appropriate, practicable options for mandatory part of the network statement for service implementing the orders. facilities in future in order to ensure transparent and non-discriminatory processes. The proceedings will be conducted parallel to the respective objection in connection with the review of the network statement.

In addition, the planned changes to DB Station&Service AG’s network statement for passenger stations were also reviewed. DB Station&Service AG has set up an internet portal for requesting station stops and concluding contracts. Communication via e mail, fax or letter is to be possible only to a limited degree in future. The Bundesnetzagentur’s objection targets this arrangement. The Bundesnetzagentur considers it necessary to have a broad fall-back level in case of technical problems. 120 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Obligation to give notice of the lists of charges imposed Extension of DB Station&Service AG’s transport by infrastructure managers service factor In 2014, the Bundesnetzagentur exempted 30% of the On 27 August 2015 the Bundesnetzagentur concluded railway line infrastructure operators for the 2015/2016 an agreement with DB Station&Service AG supple- working timetable year from the statutory require- menting an existing public-law agreement with the ment to submit to the Bundesnetzagentur lists of their company. In the year 2012 both parties agreed to planned charges in advance. remove the train length factor from the station price Since it is unlikely in the case of these undertakings system and replace it with a simplified transport that this would lead to a distortion of competition, service factor. The train length factor is problematic such a waiver represents a tried and tested means of under regulatory law. Using the transport service regulation in moderation. At the same time, vigorous factor, the station price is 2.4 times higher for stops in efforts were made to ensure that the infrastructure the long-distance traffic segment than for stops in the operators who were not exempted would notify the regional traffic segment. Bundesnetzagentur of all the charges they were planning for the next working timetable period and This transport service factor was originally intended to outline how these charges are in compliance with be applicable for two years, and then be replaced by a railway law. factor based on costs and/or bearability by the market. In order to accommodate changes in the legal frame- As a result it has been possible to increase the total work arising from a new railway regulation law, a number of notifications and the concomitant prelimi- supplementary agreement was concluded during the nary reviews of the charges and, by doing so, help year under review. In this agreement DB ensure a significantly higher level of legal certainty. At Station&Service AG committed itself to introducing a the same time, the Bundesnetzagentur exempted new transport service factor within 12 months another 20% of the infrastructure operators from the following the date on which the Railway Regulation obligation to submit a list of their charges to the Act goes into force. This deadline can be extended only Bundesnetzagentur; the exemptions in these cases are when the new act establishes an entirely new yardstick not expected to lead to any distortion of competition. for pricing.

Notice regarding the charge component “Loading point district transfer trips” of the HPA Based on complaints lodged by parties with access entitlements, the Bundesnetzagentur declared the “loading point district transfer trips” component in the Hamburg Port Authority’s pricing system to be invalid on 30 April 2015. This component makes it possible to charge multiple times for vehicle movements between loading point districts in the Hamburg port railway when the transported wagons can be assigned to various inbound and/or outbound trains. As a result the shunting facilities used are not priced in line with the services provided. There is only indirect pricing via the loading point district transfer trips. The Hamburg Port Authority has applied to the courts for an interim injunction and the Cologne Administrative Court has indicated the need for further investigations. Conse- quently the Bundesnetzagentur has suspended enforcement of the notice. This pricing component will therefore remain effective for the time being. The Bundesnetzagentur however is continuing its investi- gations in the administrative appeal proceedings.

RULINGS, ACTIVITIES AND PROCEEDINGS | RAIL | 121

Development of DB Netz AG’s new track access As a result, a number of points in the new track access charging system charging system were honed and sensible changes were In 2015 the Bundesnetzagentur continued to provide made in order to bring the new, demand-oriented intensive support for the development of a new track system more into line with actual market needs. access charging system which DB Netz AG had begun in 2014. The Bundesnetzagentur participated in the In addition, the Bundesnetzagentur supported and extensive market consultation process conducted in monitored from an early point in time the implemen- spring 2015, during which the market participants tation of the new track access charging system in DB were informed in detail about the continued develop- Netz AG’s network statement. This process was largely ment of the track access charging system. In addition completed during the reporting year. It is no longer to providing expertise, the Bundesnetzagentur had the possible to introduce the new track access charging task of being available with an “open ear” for market system in December 2016 when the new working participants during the consultations and ensuring an timetable goes into effect because there is not enough effective exchange of opinions and information time to conduct the normal process prescribed by between the market and DB Netz AG. railway law due to the significant amount of develop- ment work and the market’s broad participation. In DB Netz AG subsequently initiated comments proceed- addition, the date on which DB Netz AG’s new track ings in which market participants had the opportunity access charging system goes into effect is linked to the to raise questions and express opinions regarding the passage of the draft railway regulation act which is still new track access charging system. DB Netz AG and the in the legislative process. Bundesnetzagentur regularly discussed the opinions expressed during this process.

Sylt-Shuttle Most visitors reach Sylt by train via the Hindenburgdamm which connects the island with the mainland. Travellers who come by car have to use the car train that departs from Niebüll. One of Deutsche Bahn AG’s competitors, RDC Deutschland GmbH, now plans to offer car train service to and from the island of Sylt.

Anyone wanting to compete with DB Fernverkehr AG on the Niebüll - Westerland line needs railway capacity. However railway capacity is in short supply and DB Netz AG allocates it using a process that is regulated in detail by law. In cases where a conflict arises between railway undertakings that want to use this route, the Bundesnetzagentur acts as an arbitrator in keeping with the provisions of the law. The Bundesnetzagentur is intensively engaged in strengthening competition in the railway sector.

In the course of numerous network access proceedings, Similar conflicts had to be settled with regard to the use the Bundesnetzagentur was involved in the allocation of the ramps which are used to load cars onto the Sylt of railway infrastructure capacity for train service Shuttle. The results of the network access proceedings between Niebüll and Westerland in 2015. The first step for RDC: RDC will be able to use the line and can offer here involved ensuring long-term rights of use from car train service to Sylt several times a day. 2016 to 2020 in framework agreements, followed by specific rail links in the 2016 annual timetable and then Issues regarding service to and from Sylt will remain on train paths in non-scheduled rail services. Since some the Bundesnetzagentur’s agenda beyond the year 2015 sections of the line between Niebüll and Westerland as well. The following however is certain: Trains will have only a single track not all requests for the use of run - and competition usually leads to improved this line could be approved. quality and better service for rail passengers.

122 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

Working groups at IRG Rail and in the ENRRB International cooperation In response to the growing importance of international cooperation in the area of railway regulation, two International cooperation bodies have been firmly established that are consulted is taking on increasing on relevant issues at EU level and contribute joint positions: the Independent Regulators’ Group (IRG- importance in the area of Rail)1 which has grown in size to 26 members and the European Network of Rail Regulatory Bodies (ENRRB) rail regulation. Important which is headed by the European Commission. At the parts of this work are carried same time, these bodies provide a platform for an exchange on regulatory practices between participa- out by the Independent ting regulators. The Bundesnetzagentur is a member of Regulators’ Group (IRG- both bodies. IRG-Rail has four working groups and two sub-groups RAIL) and the European that deal with legislative proposals at European level, Network Rail Regulatory the regulation of charges, the regulation of access, and market monitoring. In 2015, the Bundesnetzagentur Bodies (ENRRB) which is chaired the working groups “Emerging Legislative Proposals” and “Access” and the sub-group “Charges for headed by the European Service Facilities”. Commission. The ENRRB meetings in 2015 gave priority to sharing experience with and information on partner regulato- ry bodies’ decision-making practice, particularly with regard to the implementation of the Recast - the Fourth Railway Package - and the different legal instruments for its enforcement. Cross-border freight transport was another important issue on the agenda of these meetings. The European Commission additio- nally established another forum: the European Commission-ENRRB-PRIME (Platform of Rail Infrastructure Managers in Europe).

The European Commission’s Recast One of the central projects of the IRG-Rail working group “Emerging Legislative Proposals in the Railway Sector” in 2015 was the exchange on the implementati- on of the Recast, in other words, the First Railway Package of the European Commission of the European Union2, which will be completed in Germany when the new Railway Regulation Act is passed in 2016.

Fourth Railway Package The European Commission published its Fourth Railway Package with various projects and proposed laws in January 2013.3 Key aspects of the Fourth Railway Package include the improvement of railway competitiveness, the facilitation of market access through non-discriminatory terms and conditions for access, the reduction of barriers to access, the opening of the national passenger transport markets and

1 http://www.irg-rail.eu/ 2 http://ec.europa.eu/transport/modes/rail/packages/2008_en.htm 3 http://www.irg-rail.eu/public-documents/2013/ - IRG-Rail (13) 5_rev2 - Fourth Package position paper INTERNATIONAL COOPERATION | RAIL | 123

competitive tendering in the rail passenger transport European Commission plans to adopt an implementing service segment. It can be assumed that agreement will act for this in 2016. be reached during the Dutch presidency in 2016. The responsible IRG-Rail working group, which is jointly International market monitoring chaired by the Bundesnetzagentur and the British One important task that is part of this international regulatory authority ORR, has developed and submit- cooperation is the participation in the IRG-Rail Market ted position papers on relevant areas under discussion. Monitoring working group and the RMMS (Rail Market The deliberations and considerations revolved around Monitoring Scheme, in other words: market monitor- the role, powers and responsibilities of the regulatory ing at European level) sub-group meetings. The focus authorities. of these activities in 2015 was on developing indicators for establishing ever-greater comparability of national Implementing acts of the European Commission monitoring activities in the railway sector and pursuant to Directive 2012/34/EU fostering an exchange between regulatory authorities Directive 2012/34/EU provides for the introduction of with the aim of increasing transparency in the “implementing acts” by the European Commission to European railway market. An annual market monitor- spell out in more concrete terms the individual ing report provides qualitative and quantitative data sections of the Directive. The European Commission analyses on numerous key issues in the railway market. has commenced work on corresponding legislative texts on access to service facilities and on framework agreements. Implementing acts on rail market monitoring at European level (Rail Market Monitoring Scheme - RMMS), on criteria for parties with access entitlement and on the calculation of the direct costs of a train movement - which is of major importance for the regulation of charges - were adopted in 2015. The work of the IRG-Rail working group on Charges in 2016 will focus on the implementation of the latter act.

Access issues, corridors and service facilities The work done by the working group on Access in 2015 focused on international freight traffic, particularly with a view to “Regulation No 913/2010 concerning a European rail network for competitive freight”. Rail freight corridors are designated railway lines between two or more Member States of the European Union that link terminals along a principal route. Nine European rail freight corridors (initially six, and three more have been added since November 2015) were established to create a European rail network for competitive freight traffic. This includes offering pre-arranged paths. Each corridor has a Corridor One-Stop-Shop (C-OSS) that is responsible for the allocation of the train paths. The aforementioned EU Regulation requires infrastructure managers to work more closely with one another than in the past, to offer continuous cross-border train paths, and to streamline the process for requesting sections of train path. Initial practical experience has raised a number of questions that have to be addressed and resolved in the course of new initiatives. IRG-Rail adopted a document in this connection; this document will be refined and further developed in 2016. In view of the enormous impor- tance that non-discriminatory access to service facilities has for the internal railway market, the The Bundesnetzagentur's core tasks and organisation The Bundesnetzagentur is primarily responsible for promoting competition in the regulated areas and ensuring non discriminatory access to networks. In doing so it profits from a task oriented organisational structure, which meets the many and varied requirements and at the same time al- lows the Bundesnetzagentur to accommodate new tasks in an open and flexible manner.

Functions and structure The Bundesnetzagentur's tasks are complex and highly diversified. They range from cases addressed in quasi- The Bundesnetzagentur, originally known as the judicial proceedings in regulation areas, to reporting Regulatory Authority for Telecommunications and Post, requirements and planning authority responsibilities, was set up on 1 January 1998 as a separate higher federal consumer protection and information activities in the authority under the then Federal Ministry of Economics regulated sectors, right down to the nationwide presence and Technology. It took over the responsibilities of the for investigating and processing frequency interference former Federal Ministry of Post and Telecommunications complaints. and the Federal Office for Post and Telecommunications. On being assigned responsibilities under the Energy Act Below the management level the Bundesnetzagentur and the General Railway Act, the Regulatory Authority comprises ruling chambers and departments. The for Telecommunications and Post was renamed the President's Chamber takes decisions in specific cases, in Bundesnetzagentur für Elektrizität, Gas, Telekommuni- particular on award proceedings for scarce radio kation, Post und Eisenbahnen in 2005. spectrum resources and the imposition of universal service obligations. In the telecommunications sector it First and foremost, the Bundesnetzagentur's remit is to determines which markets require regulation and which promote competition through regulation in the energy, companies have significant market power in these telecommunications, postal and rail sectors and to markets. On the basis of these determinations, the ruling guarantee non discriminatory network access. Alongside chambers then decide on the regulatory measures to be regulatory measures in the energy sector, as the national imposed on companies with significant market power. planning authority the Bundesnetzagentur is also This is how decisions on specific details of obligations are responsible for the expansion of electricity transmission reached, for example in the field of network access lines crossing national or state borders in the context of conditions or ex-ante or ex-post price reviews. In the the Energiewende. In the telecommunications and postal postal sector the ruling chamber focuses on (ex-ante and sectors it ensures appropriate, adequate and nationwide ex-post) rates approval and the control of anti-competi- services and, on the basis of various pertinent laws and tive practices, including the regulation of access to the ordinances, provides regulations for the use of frequenci- postal network. In the energy sector the Energy Act gives es and numbers. the ruling chambers decision-making powers on general and individual issues regarding access to electricity and Furthermore, the Bundesnetzagentur is the competent gas networks and network tariffs. authority under the Electronic Signatures Act (SigG). THE BUNDESNETZAGENTUR'S CORE TASKS AND ORGANISATION | 125

The departments perform specialised and central technical implementation of interception measures, and administrative functions. These include economic and implementing and safeguarding information procedures. legal policy issues in the various areas of regulation and the relevant international coordination, as well as In the energy sector it is the Bundesnetzagentur's duty to technical aspects of frequencies, standardisation, create and secure the basis for efficient competition in the numbering and public safety. The Bundesnetzagentur is electricity and gas markets. This is done in particular involved in international standardisation bodies, through unbundling and regulating non-discriminatory cooperating in the development of next generation access to the energy networks, including rates regulation. networks and new radio systems. In addition, the statutory decision in 2011 to phase out nuclear power as part of the Energiewende and the In the energy sector, the Bundesnetzagentur has been continued expansion of renewable energy require state assigned key market supervisory tasks from the gas and measures with respect to the various market players. electricity network development planning, from the These include, for instance, monitoring the electricity Market Transparency Unit for Wholesale Electricity and and gas wholesale markets, supervising the redistribution Gas Markets set up in 2013, and from its responsibility for mechanism under the Renewable Energy Sources Act safeguarding security of supply. A major departmental (EEG), registering photovoltaic systems to determine the function is to give ruling chambers specialist assistance progressive reduction in the EEG-regulated feed-in tariff in their decision-making. All relevant rail regulation tasks and any interventions necessary to safeguard security of are performed by the rail department, as the General supply, for example if system-relevant power plants are to Railway Act does not yet provide for a ruling chamber. be decommissioned. The latter task is statutorily limited in duration to 2017. The Bundesnetzagentur also All of the Bundesnetzagentur's responsibilities have a monitors the development of upstream generation and strong international element. Coordination at European import markets along with consumer markets. level, in particular, has always been an important aspect of its regulatory activity. This is reflected by the fact that One of the major tasks for the Bundesnetzagentur in the the international activities are mostly concentrated and context of the Energiewende is the fast, large-scale dealt with in one department. expansion of the electricity transmission networks. To achieve this, the Bundesnetzagentur has been given In the telecommunications sector the Bundesnetzagentur wide-ranging authority in network development is mainly responsible for the key decisions and objectives planning and in approving network expansion measures. that promote investment, innovations and competition This includes implementing the federal sectoral planning for the benefit of all citizens. for extra-high voltage lines crossing federal state and Consumer protection remains another key focus area in national borders and, as of 2013, their planning approval. the telecommunications sector. For this purpose, As a part of network development planning, key decision- emphasis is placed on investigating problems that hinder making information was prepared and presented to the a smooth change of supplier. In addition, the Bundesnetz- legislator as a basis for determining the priority needs of agentur continues to vigorously combat misuse as regards network expansion set by the energy sector. Following unlawful use of telephone numbers, anti-competitive the adoption of the Federal behaviour and cold calling. In protecting the consumer, particular attention is given to preventing the illegal Requirements Plan in 2013, planning procedures for billing of call queues. Another primary function is to extra-high voltage lines crossing federal state and ensure transparency of consumer contracts, in particular national borders take place as part of the federal sectoral with respect to the bandwidth guaranteed in the contract. planning process and the subsequent approval procedure. The Bundesnetzagentur also maintains a database of sites As part of the statutory planning process, the network of fixed transmitters operating above a specified power development plan is constantly being updated to take level. Also of particular importance for consumers are the account of the latest developments. This also involves resolution of radio interference, the dispute resolution network planning and connection in the offshore sector. procedure under section 47a of the Telecommunications Act and section 10 of the Postal Services Ordinance In rail regulation the Bundesnetzagentur monitors (PDLV), and general consumer services. Under Part Seven compliance with the legislation on rail infrastructure of the Telecommunications Act, the Bundesnetzagentur access. A core task here is to ensure non-discriminatory plays an important role in ensuring public safety. Its tasks use of the rail infrastructure by railway undertakings and include checking the technical protection measures for other access beneficiaries. The term rail infrastructure critical telecommunications infrastructure, protecting includes the infrastructure and services connected with personal data and telecommunications privacy, the both tracks and service facilities (eg stations, freight terminals). Rates regulation includes the examination of 126 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

the amount and structure of infrastructure charges and Human resources management of other charges levied by the infrastructure managers. Human resources management is a top priority at the A nationwide presence is vital for the Bundesnetzagentur Bundesnetzagentur. It is important both to assign staff to perform its duties well. To ensure consistency the optimally and to recruit new qualified staff. This is only Bundesnetzagentur's regional offices, the contact point possible when human resources management takes with consumers and the industry, are managed and account of work requirements and staff skills and coordinated centrally by a single department. preferences in equal measure. Only a combination of pro-active and appropriate staff deployment and The regional offices are mainly responsible for technical motivated employees will allow the Bundesnetzagentur matters. They provide information, for instance, on to perform its responsibilities in an efficient and cost- compliance with the Telecommunications Act, electro- effective way even in times of tight budgets. Aspiring to magnetic environmental compatibility provisions and modern human resources management, the Bundesnetz- the Electromagnetic Compatibility of Equipment Act. agentur offers not only corporate health schemes, but also They are also in charge of frequency assignment, for models for balancing work and family life. instance for private mobile radio systems, for granting site certificates and for sampling equipment under their In recruiting new staff the Bundesnetzagentur requires market surveillance duties. Another important area is the not only excellent specialist knowledge, but also the investigation and processing of radio interference using ability to structure and address complex new tasks in an state-of-the-art measuring equipment, monitoring interdisciplinary team quickly and with a flair for compliance with regulations generally and carrying out practical solutions. radio monitoring and inspection orders under the Telecommunications Act and the Electromagnetic Given its diverse areas of activity, the Bundesnetzagentur Compatibility of Equipment Act. attaches particular importance to an interdisciplinary work approach. In total the Bundesnetzagentur employs Additional executive tasks are carried out by specific about 2,900 specialists, including legal experts, econo- regional offices. In particular this involves activities in mists, engineers and scientists from various fields, to number administration, number misuse and cold calls, ensure the efficient, proper performance of tasks in all consumer protection and information, the registration of areas. photovoltaic systems and the registration of railway infrastructure. Moreover, they also carry out some The Bundesnetzagentur has been offering apprentice- personnel management functions for other government ships since 1999. In view of the recruitment of future staff bodies and the challenges of demographic change the training qualifications offered by the Bundesnetzagentur have and institutions, primarily those falling under the Federal become ever more diverse. Vocational training is available Ministry for Economic Affairs and Energy. for office communication trainees, electronic equipment and systems trainees, and for IT trainees in system integration and applications development. Since 2011 the Bundesnetzagentur has also offered a practice-oriented study programme to qualify students (Bachelor of Engineering/Electrical Engineering and Bachelor of Science) to work as technicians for electronic equipment and systems at the Bundesnetzagentur.

Moreover, since 2012 two civil servants preparing for the rank of Regierungsinspektor are selected annually to take a university degree in IT in public administration. Vocational training courses are offered at a total of eight Bundesnetzagentur locations, in particular at the regional offices. THE BUNDESNETZAGENTUR'S CORE TASKS AND ORGANISATION | 127

In 2015, a total of 172 young people were trained at the On 19 June 2015 the Bundesnetzagentur’s spectrum Bundesnetzagentur in various occupations. Of the 28 auction for mobile broadband ended after 16 auction days. trainees who successfully completed their training in In total 270 MHz of spectrum from the 700 MHz, 900 2015, 18 decided to stay with the Bundesnetzagentur. MHz, 1500 MHz and 1800 MHz bands were auctioned, Type of income Target Performance Target Additionally, in 2015, for the first time, two students generating a total revenue201 of5 €5.08bn. Revenues2015 from2016 graduated from the Bundesnetzagentur's practice-orien- auctioning the 700 and the(€000 1500) MHz spectrum(€000) totalling(€000) ted study programme. A graduate in IT in public adminis- €1.33bnTelecoms fees, are earmarked for broadband expansion, contributions and tration and an electrical engineering graduate took posts whereas revenues generated from auctioning the 900 and other charges 3,796,438 3,793,987 62,787 at the Bundesnetzagentur at higher intermediate level. 1800Fees and MHz other spectrum totalling €3.75bn go to the federal budget.charges in the postal Budget sector 58 35 6 Fees and other In connection with network expansion, the 2015 budget charges in the rail The Bundesnetzagentur's income and expenditure is estimatedsector income of some €15m,100 but the actual68 income62 budgeted for in the federal budget in the departmental onlyFees and amounted other to €7.4bn in 2015. This is partially owing budget of the Federal Ministry for Economic Affairs and tocharges the continuedin the energy long delays in application submissions Energy. forsector federal (electricity sectoral planning. At the present time, and gas) 6,341 2,199 4,760 however, there are also delays in projects already Fees and other The table below shows the income for 2015 (target and submitted,charges under the as transmission system operators need to performance) and 2016 (target). makeGrid Expansion changes and revise their applications to ensure Acceleration Act statutory(NABEG) priority for underground15,000 cables.7,400 The additional16,303 expectedOther administrative income will be delayed until subsequent Type of income Target Performance Target income, eg fines, 2015 2015 2016 financial years. rents and disposals (€000) (€000) (€000) 1,043 3,917 984 Administrative Telecoms fees, The chart below shows the expenditure for 2015 (target income 3,818,980 3,807,606 84,902 contributions and and performance) and 2016 (target). other charges 3,796,438 3,793,987 62,787 Fees and other Target Target charges in the postal Performance sector 58 35 6 Type of expenditure 2015 2015 2016 (€000) (€000) (€000) Fees and other 135,738 129,942 138,694 charges in the rail Personnel costs sector 100 68 62 General administrative Fees and other expenditure, 56,484 49,968 57,580 charges in the energy appropriations sector (electricity and gas) 6,341 2,199 4,760 Investment 14,909 9,221 17,416 Fees and other Total expenditure 207,131 189,149 213,690 charges under the Grid Expansion Acceleration Act (NABEG) 15,000 7,400 16,303 Other administrative income, eg fines, rents and disposals 1,043 3,917 984 The ceiling was increased to accommodate personnel Administrative joining the Bundesnetzagentur from other government income 3,818,980 3,807,606 84,902 bodies and institutions.

Target Performance Target Type of expenditure 2015 2015 2016 (€000) (€000) (€000)

Personnel costs 135,738 129,942 138,694

General administrative expenditure, 56,484 49,968 57,580 appropriations

Investment 14,909 9,221 17,416

Total expenditure 207,131 189,149 213,690

128 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015 Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen

President Management Office

Press 01 05 06 IR Office of the Advisory Councils and General Office-Berlin „Energy Press, Public Vice President Vice President Ruling Chambers Spokesperson President and Committee of Federal Internal Auditing General Staff Spokesperson Security Data Protection of the Future“ Staff Council for Disabled Relations Office States Representatives Council for Disabled Officer Commissioner Vice Presidents, Persons Administrative Unit Office Persons Procedual Issues Organisation Chart 1 August 2016

Ruling Chamber 1 Z IS 1 2 3 4 5 6 7 President’s Chamber Equal Business Support Information Technology Telecommunications Legal International Relations/ Technical Regional Offices, Energy Regulation Rail Regulation Grid Expansion Decisions under Opportunities and Security Commission Regulatory Telecommunications Postal Regulation Telecommunications Misuse of Numbers Sections 10, 11 and Economics Regulation Issues, Regulation -Start-Up Team- 55(9), 61, 62, 81 TKG, Frequency Regulation Sections 13, 14 PostG

Z1 Z2

Legal Office General Legal Affairs, Grid Expansion Organisation Finances, Approval Coordination Personnel Controlling

Ruling Chamber 2 Z 11 Z 21 IS 10 111 211 220 311 411 421 511 601 608 701 N1 N 11 Regulation of General Legal Affairs Technical and Regulatory Telecommunications Legal Issues, Regulatory Policy and Technical Regulation Transmission Network Retail Markets (Fixed and Organisation, (excluding Civil Law), Data IT Operations and Services, Telecommunications Aspects of Efficient and Strategic Approaches, Radio Monitoring and Access (Electricity), Rail Regulation Sector-Specific Control of Market Surveillance, and Standardisation Economic Policy Issues Legal Issues and Mobile), Leased Lines, Protection, Part 7 TKG Legal Interference-Free Use of Approval Procedures Occupational Health and Data Centre Regulatory Anti-Competitive Practices International Business, Matters relating to the Issues for Fixed and Inspection Service, Cross Border Trade Legal Policy Approval Procedures Subscriber Data, Issues Radio Frequencies, Radio Safety Economic Policy Issues Telecoms Language Services EMC and the R&TTE Act Special Radio Services Measurement Equipment in Electricity Collection Services, Compatibility Porting, Dispute Settlement

Z 12 Z 22 IS 11 112 212 221 312 413 422 512 602 609 702 N2 N 12 Staff Policy, Radio Frequency Innovative Communication Ruling Chamber 3 Personnel Representation Utilisation Concepts Services and Networks, Numbers Misuse Collection Policy Issues, IT Finance, IT Resource Spectrum Management International Gas Transmission Systems – Rail Regulation Economic Legislation, International Affairs Technical EMC Issues, Numbering and Security Investigation, Combating Incentive Regulation, Participation Outstanding Payments Management and Planning, Market Watch Procedures, Market and Coordination Access, International Affairs, Policy, Market Watch, Approval Procedures Senior and Upper Grade Frequency Plan Standardisation Aspects of ICT Standardisation Violations of Competition Benchmarking Regulation of Collection Intranet Editorial Office Telecommunications Cometitions Aspects Telecommunications Network Development Statistics Service Staff, Innovative Radio and ETSI; Focal Point to ITU-T Law and Spam Telecommunications and Rail and ETSI; Coordination Office Public Employees, Applications Wholesale Markets, Special Unit Further Training for ICT Standardisation Fixed and Mobile Z 13 Z 24 IS 12 113 213 222 313 414 423 513 603 610 703 N3 N 13

Budget, Business Management Environmental Impact of Personel Isssues Medium Combating Violations of Access to and Basic Grade Service Budgeting, and Accounting Issues, Frequency Award and International Radio Equipment, EMF Technical Regulation Market Watch, Environmental IT Solutions Development Broadcasting Database, Energy Efficiency Competition Law incurring Electricity Grid Fees Rail Infrastructure and Approval Procedures Staff; Working Time, Tax Matters, Cost Accounting Telecoms, Assignment Policy Coordination and Standardisation Issues Electricity/Gas Monitoring Assessments Ruling Chamber 4 in Information and in Broadcasting Administrative Fines Services Teleworking, Annual Leave, Personnel Management Examination of Energy Communications Technology Special Leave Rate Proposals Individual Electricity Network Tariffs, Z 14 Z 25 IS 13 114 215 223 314* 415 424 604 611 704 N4 N 14 Electricity/Gas Investment Regional offices Regional offices Measures, Cost of Equity, with without International Postal Technical Regulation Energy Grids Procurement, Civil Law, Trunked Radio, 450 MHz Satellite Services, Fixed Recognition of admin unit admin unit Business Coordination, and Standardisation Issues Energy Regulation and Access to Buildings, Accident Compensation, Wireless Access, Special Services below 30 MHZ, Conformity Assessment Use of System Charges GIS, Mitigation and IT Policy, IT Project and Internet Economy Market Participant Checks, for Mobile Services and Renewables Points of Law, Service Facilities Real Property Administrative Offences and Award Proceedings, Use of Short Term Usage, Bodies; ICT Standardisation (Gas) Compensation, Approval Procedures Information Management Universal Mobility; Radio - Augsburg Landshut, Unbundling, Consumer Health Insurance Assistance Public Ways, Business Civil/Military Frequency Postal Privacy and Data – Smart Grids and and Services Monitoring Interference Suppression München Policy Issues Legislation Register Coordination Protection Compliance Industry 4.0 Ordinance Ruling Chamber 5*

Z 15 Z 26 IS 14 115 216 224 315* 416 425 - Berlin Magdeburg, 605 612 705 N5 Rates Regulation and International Mobile Radio Technical Regulation and Kollberg Special Control of Fiscal Regulations, Economic Policy Issues Controlling, Frequency Coordination, Digital Standardisation Issues for Charges for Anti-Competitive Practices Universal Service, of Postal Markets IT-based Data Processing, Information Requests, Cellular Networks, Public Paging Legal and Economic Universal Services and Open Cooperation with State Networks, Admin, Registry, Internal Administration Transaction and Infrastructure Atlas Networks, Railway and Public Regulation, - Dortmund Performance of Duties under Postal Markets Public Affairs, Policy Issues, Network Provision, Securing Service Facilities IT Data Processing Cost Accounts, Civil Defence Market Definition, Kassel, the Renewable Energy Regulatory Authorities, Consumer Issues, Safety Authorities and Dept 4 Legal Affairs Billing Accuracy under Quality Management Organisations, Civil/Military Site Meschede, and Services Dispute Resolution Panel Market Dominance the Telecoms Customer Sources Act EU Coordination Coordination, Maritime Mobile Post Münster and Inland Waterways Services Protection Ordinance Z 16 116 316* - Eschborn Neustadt, 606 613 Ruling Chamber 6 IS 15 225 Saarbrücken, Shared Service Center (SSC) Darmstadt, Leeheim Tasks: Remuneration, Salaries, Business Management and Family Allowance Scheme, Travel Accounting Issues, Distribution Network Access and Relocation Expenses, Qualified Electronic Market Definition and Cost Accounting Post, (Electricity), Grid Development Electricity Grid Separation Allowances, Health Signatures Market Analysis Non Public Radio Applications Examination of Rate - Hamburg Kiel, Technical Policy Issues, Amateur Radio Regulation Insurance Assistance; SSC Section 12 TKG Procedures Proposals, Itzehoe Quality of Supply Management and Coordination Market Surveillance

IS 16 117 317* - Hannover Bremen, 607 MTS 226 Göttingen Legal Policy Issues Distribution Network Task Force Provision Continuity Tele- of Postal Markets Access (Gas), for the Market Ruling Chamber 7 communications and Post, Radio Relay, Aeronautical, Regulation, Transparency Unit for Numbering Policy Technical Policy Issues, Technical Implementation Radionavigation and Licensing Policy, - Karlsruhe Konstanz, Wholesale Electricity and Reutlingen of Intercepts Radiodetermination Services Licence Grant, Quality of Supply Gas Markets / REMIT Special Network Access Enforcement Gas Networks Regulation 118 318* - Köln Mülheim, IS 17 Krefeld Universal Service, Telecommunications Privacy Consumer Issues and and Data Protection Number Administration Dispute Resolution Panel - Leipzig Dresden, Compliance, Emergency Ruling Chamber 8 Post, Chemnitz, Calls, Telecoms Security, Quality of Service Erfurt Internal IT Security Measurement - Nürnberg Fulda, Electricity Grid Fees *The Chair of Ruling Chamber 5 will be in charge of Department 3's DV/IPF Schwäbisch Hall, tasks for Sections 314-318 until further notice. Würzburg Task Force Legend: Digitisation and Interconnectivity; Internet in Bonn Platforms at other locations Ruling Chamber 9 Department under construction

Use of System Charges Contact Points: Gas Headquarters: Tulpenfeld 4 Phone: +49 (0)228 14-0 Email: [email protected] 53113 Bonn Fax: +49 (0)228 14-8872 Internet: http://www.bundesnetzagentur.de | 129 Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen

President Management Office

Press 01 05 06 IR Office of the Advisory Councils and General Office-Berlin „Energy Press, Public Vice President Vice President Ruling Chambers Spokesperson President and Committee of Federal Internal Auditing General Staff Spokesperson Security Data Protection of the Future“ Staff Council for Disabled Relations Office States Representatives Council for Disabled Officer Commissioner Vice Presidents, Persons Administrative Unit Office Persons Procedual Issues Organisation Chart 1 August 2016

Ruling Chamber 1 Z IS 1 2 3 4 5 6 7 President’s Chamber Equal Business Support Information Technology Telecommunications Legal International Relations/ Technical Regional Offices, Energy Regulation Rail Regulation Grid Expansion Decisions under Opportunities and Security Commission Regulatory Telecommunications Postal Regulation Telecommunications Misuse of Numbers Sections 10, 11 and Economics Regulation Issues, Regulation -Start-Up Team- 55(9), 61, 62, 81 TKG, Frequency Regulation Sections 13, 14 PostG

Z1 Z2

Legal Office General Legal Affairs, Grid Expansion Organisation Finances, Approval Coordination Personnel Controlling

Ruling Chamber 2 Z 11 Z 21 IS 10 111 211 220 311 411 421 511 601 608 701 N1 N 11 Regulation of General Legal Affairs Technical and Regulatory Telecommunications Legal Issues, Regulatory Policy and Technical Regulation Transmission Network Retail Markets (Fixed and Organisation, (excluding Civil Law), Data IT Operations and Services, Telecommunications Aspects of Efficient and Strategic Approaches, Radio Monitoring and Access (Electricity), Rail Regulation Sector-Specific Control of Market Surveillance, and Standardisation Economic Policy Issues Legal Issues and Mobile), Leased Lines, Protection, Part 7 TKG Legal Interference-Free Use of Approval Procedures Occupational Health and Data Centre Regulatory Anti-Competitive Practices International Business, Matters relating to the Issues for Fixed and Inspection Service, Cross Border Trade Legal Policy Approval Procedures Subscriber Data, Issues Radio Frequencies, Radio Safety Economic Policy Issues Telecoms Language Services EMC and the R&TTE Act Special Radio Services Measurement Equipment in Electricity Collection Services, Compatibility Porting, Dispute Settlement

Z 12 Z 22 IS 11 112 212 221 312 413 422 512 602 609 702 N2 N 12 Staff Policy, Radio Frequency Innovative Communication Ruling Chamber 3 Personnel Representation Utilisation Concepts Services and Networks, Numbers Misuse Collection Policy Issues, IT Finance, IT Resource Spectrum Management International Gas Transmission Systems – Rail Regulation Economic Legislation, International Affairs Technical EMC Issues, Numbering and Security Investigation, Combating Incentive Regulation, Participation Outstanding Payments Management and Planning, Market Watch Procedures, Market and Coordination Access, International Affairs, Policy, Market Watch, Approval Procedures Senior and Upper Grade Frequency Plan Standardisation Aspects of ICT Standardisation Violations of Competition Benchmarking Regulation of Collection Intranet Editorial Office Telecommunications Cometitions Aspects Telecommunications Network Development Statistics Service Staff, Innovative Radio and ETSI; Focal Point to ITU-T Law and Spam Telecommunications and Rail and ETSI; Coordination Office Public Employees, Applications Wholesale Markets, Special Unit Further Training for ICT Standardisation Fixed and Mobile Z 13 Z 24 IS 12 113 213 222 313 414 423 513 603 610 703 N3 N 13

Budget, Business Management Environmental Impact of Personel Isssues Medium Combating Violations of Access to and Basic Grade Service Budgeting, and Accounting Issues, Frequency Award and International Radio Equipment, EMF Technical Regulation Market Watch, Environmental IT Solutions Development Broadcasting Database, Energy Efficiency Competition Law incurring Electricity Grid Fees Rail Infrastructure and Approval Procedures Staff; Working Time, Tax Matters, Cost Accounting Telecoms, Assignment Policy Coordination and Standardisation Issues Electricity/Gas Monitoring Assessments Ruling Chamber 4 in Information and in Broadcasting Administrative Fines Services Teleworking, Annual Leave, Personnel Management Examination of Energy Communications Technology Special Leave Rate Proposals Individual Electricity Network Tariffs, Z 14 Z 25 IS 13 114 215 223 314* 415 424 604 611 704 N4 N 14 Electricity/Gas Investment Regional offices Regional offices Measures, Cost of Equity, with without International Postal Technical Regulation Energy Grids Procurement, Civil Law, Trunked Radio, 450 MHz Satellite Services, Fixed Recognition of admin unit admin unit Business Coordination, and Standardisation Issues Energy Regulation and Access to Buildings, Accident Compensation, Wireless Access, Special Services below 30 MHZ, Conformity Assessment Use of System Charges GIS, Mitigation and IT Policy, IT Project and Internet Economy Market Participant Checks, for Mobile Services and Renewables Points of Law, Service Facilities Real Property Administrative Offences and Award Proceedings, Use of Short Term Usage, Bodies; ICT Standardisation (Gas) Compensation, Approval Procedures Information Management Universal Mobility; Radio - Augsburg Landshut, Unbundling, Consumer Health Insurance Assistance Public Ways, Business Civil/Military Frequency Postal Privacy and Data – Smart Grids and and Services Monitoring Interference Suppression München Policy Issues Legislation Register Coordination Protection Compliance Industry 4.0 Ordinance Ruling Chamber 5*

Z 15 Z 26 IS 14 115 216 224 315* 416 425 - Berlin Magdeburg, 605 612 705 N5 Rates Regulation and International Mobile Radio Technical Regulation and Kollberg Special Control of Fiscal Regulations, Economic Policy Issues Controlling, Frequency Coordination, Digital Standardisation Issues for Charges for Anti-Competitive Practices Universal Service, of Postal Markets IT-based Data Processing, Information Requests, Cellular Networks, Public Paging Legal and Economic Universal Services and Open Cooperation with State Networks, Admin, Registry, Internal Administration Transaction and Infrastructure Atlas Networks, Railway and Public Regulation, - Dortmund Performance of Duties under Postal Markets Public Affairs, Policy Issues, Network Provision, Securing Service Facilities IT Data Processing Cost Accounts, Civil Defence Market Definition, Kassel, the Renewable Energy Regulatory Authorities, Consumer Issues, Safety Authorities and Dept 4 Legal Affairs Billing Accuracy under Quality Management Organisations, Civil/Military Site Meschede, and Services Dispute Resolution Panel Market Dominance the Telecoms Customer Sources Act EU Coordination Coordination, Maritime Mobile Post Münster and Inland Waterways Services Protection Ordinance Z 16 116 316* - Eschborn Neustadt, 606 613 Ruling Chamber 6 IS 15 225 Saarbrücken, Shared Service Center (SSC) Darmstadt, Leeheim Tasks: Remuneration, Salaries, Business Management and Family Allowance Scheme, Travel Accounting Issues, Distribution Network Access and Relocation Expenses, Qualified Electronic Market Definition and Cost Accounting Post, (Electricity), Grid Development Electricity Grid Separation Allowances, Health Signatures Market Analysis Non Public Radio Applications Examination of Rate - Hamburg Kiel, Technical Policy Issues, Amateur Radio Regulation Insurance Assistance; SSC Section 12 TKG Procedures Proposals, Itzehoe Quality of Supply Management and Coordination Market Surveillance

IS 16 117 317* - Hannover Bremen, 607 MTS 226 Göttingen Legal Policy Issues Distribution Network Task Force Provision Continuity Tele- of Postal Markets Access (Gas), for the Market Ruling Chamber 7 communications and Post, Radio Relay, Aeronautical, Regulation, Transparency Unit for Numbering Policy Technical Policy Issues, Technical Implementation Radionavigation and Licensing Policy, - Karlsruhe Konstanz, Wholesale Electricity and Reutlingen of Intercepts Radiodetermination Services Licence Grant, Quality of Supply Gas Markets / REMIT Special Network Access Enforcement Gas Networks Regulation 118 318* - Köln Mülheim, IS 17 Krefeld Universal Service, Telecommunications Privacy Consumer Issues and and Data Protection Number Administration Dispute Resolution Panel - Leipzig Dresden, Compliance, Emergency Ruling Chamber 8 Post, Chemnitz, Calls, Telecoms Security, Quality of Service Erfurt Internal IT Security Measurement - Nürnberg Fulda, Electricity Grid Fees *The Chair of Ruling Chamber 5 will be in charge of Department 3's DV/IPF Schwäbisch Hall, tasks for Sections 314-318 until further notice. Würzburg Task Force Legend: Digitisation and Interconnectivity; Internet in Bonn Platforms at other locations Ruling Chamber 9 Department under construction

Use of System Charges Contact Points: Gas Headquarters: Tulpenfeld 4 Phone: +49 (0)228 14-0 Email: [email protected] 53113 Bonn Fax: +49 (0)228 14-8872 Internet: http://www.bundesnetzagentur.de | 129 | 130 Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen

President Management Office

Press 01 05 06 IR Office of the Advisory Councils and General Office-Berlin „Energy Press, Public Vice President Vice President Ruling Chambers Spokesperson President and Committee of Federal Internal Auditing General Staff Spokesperson Security Data Protection of the Future“ Staff Council for Disabled Relations Office States Representatives Council for Disabled Officer Commissioner Vice Presidents, Persons Administrative Unit Office Persons Procedual Issues Organisation Chart 1 August 2016

Ruling Chamber 1 Z IS 1 2 3 4 5 6 7 President’s Chamber Equal Business Support Information Technology Telecommunications Legal International Relations/ Technical Regional Offices, Energy Regulation Rail Regulation Grid Expansion Decisions under Opportunities and Security Commission Regulatory Telecommunications Postal Regulation Telecommunications Misuse of Numbers Sections 10, 11 and Economics Regulation Issues, Regulation -Start-Up Team- 55(9), 61, 62, 81 TKG, Frequency Regulation Sections 13, 14 PostG

Z1 Z2

Legal Office General Legal Affairs, Grid Expansion Organisation Finances, Approval Coordination Personnel Controlling

Ruling Chamber 2 Z 11 Z 21 IS 10 111 211 220 311 411 421 511 601 608 701 N1 N 11 Regulation of General Legal Affairs Technical and Regulatory Telecommunications Legal Issues, Regulatory Policy and Technical Regulation Transmission Network Retail Markets (Fixed and Organisation, (excluding Civil Law), Data IT Operations and Services, Telecommunications Aspects of Efficient and Strategic Approaches, Radio Monitoring and Access (Electricity), Rail Regulation Sector-Specific Control of Market Surveillance, and Standardisation Economic Policy Issues Legal Issues and Mobile), Leased Lines, Protection, Part 7 TKG Legal Interference-Free Use of Approval Procedures Occupational Health and Data Centre Regulatory Anti-Competitive Practices International Business, Matters relating to the Issues for Fixed and Inspection Service, Cross Border Trade Legal Policy Approval Procedures Subscriber Data, Issues Radio Frequencies, Radio Safety Economic Policy Issues Telecoms Language Services EMC and the R&TTE Act Special Radio Services Measurement Equipment in Electricity Collection Services, Compatibility Porting, Dispute Settlement

Z 12 Z 22 IS 11 112 212 221 312 413 422 512 602 609 702 N2 N 12 Staff Policy, Radio Frequency Innovative Communication Ruling Chamber 3 Personnel Representation Utilisation Concepts Services and Networks, Numbers Misuse Collection Policy Issues, IT Finance, IT Resource Spectrum Management International Gas Transmission Systems – Rail Regulation Economic Legislation, International Affairs Technical EMC Issues, Numbering and Security Investigation, Combating Incentive Regulation, Participation Outstanding Payments Management and Planning, Market Watch Procedures, Market and Coordination Access, International Affairs, Policy, Market Watch, Approval Procedures Senior and Upper Grade Frequency Plan Standardisation Aspects of ICT Standardisation Violations of Competition Benchmarking Regulation of Collection Intranet Editorial Office Telecommunications Cometitions Aspects Telecommunications Network Development Statistics Service Staff, Innovative Radio and ETSI; Focal Point to ITU-T Law and Spam Telecommunications and Rail and ETSI; Coordination Office Public Employees, Applications Wholesale Markets, Special Unit Further Training for ICT Standardisation Fixed and Mobile Z 13 Z 24 IS 12 113 213 222 313 414 423 513 603 610 703 N3 N 13

Budget, Business Management Environmental Impact of Personel Isssues Medium Combating Violations of Access to and Basic Grade Service Budgeting, and Accounting Issues, Frequency Award and International Radio Equipment, EMF Technical Regulation Market Watch, Environmental IT Solutions Development Broadcasting Database, Energy Efficiency Competition Law incurring Electricity Grid Fees Rail Infrastructure and Approval Procedures Staff; Working Time, Tax Matters, Cost Accounting Telecoms, Assignment Policy Coordination and Standardisation Issues Electricity/Gas Monitoring Assessments Ruling Chamber 4 in Information and in Broadcasting Administrative Fines Services Teleworking, Annual Leave, Personnel Management Examination of Energy Communications Technology Special Leave Rate Proposals Individual Electricity Network Tariffs, Z 14 Z 25 IS 13 114 215 223 314* 415 424 604 611 704 N4 N 14 Electricity/Gas Investment Regional offices Regional offices Measures, Cost of Equity, with without International Postal Technical Regulation Energy Grids Procurement, Civil Law, Trunked Radio, 450 MHz Satellite Services, Fixed Recognition of admin unit admin unit Business Coordination, and Standardisation Issues Energy Regulation and Access to Buildings, Accident Compensation, Wireless Access, Special Services below 30 MHZ, Conformity Assessment Use of System Charges GIS, Mitigation and IT Policy, IT Project and Internet Economy Market Participant Checks, for Mobile Services and Renewables Points of Law, Service Facilities Real Property Administrative Offences and Award Proceedings, Use of Short Term Usage, Bodies; ICT Standardisation (Gas) Compensation, Approval Procedures Information Management Universal Mobility; Radio - Augsburg Landshut, Unbundling, Consumer Health Insurance Assistance Public Ways, Business Civil/Military Frequency Postal Privacy and Data – Smart Grids and and Services Monitoring Interference Suppression München Policy Issues Legislation Register Coordination Protection Compliance Industry 4.0 Ordinance Ruling Chamber 5*

Z 15 Z 26 IS 14 115 216 224 315* 416 425 - Berlin Magdeburg, 605 612 705 N5 Rates Regulation and International Mobile Radio Technical Regulation and Kollberg Special Control of Fiscal Regulations, Economic Policy Issues Controlling, Frequency Coordination, Digital Standardisation Issues for Charges for Anti-Competitive Practices Universal Service, of Postal Markets IT-based Data Processing, Information Requests, Cellular Networks, Public Paging Legal and Economic Universal Services and Open Cooperation with State Networks, Admin, Registry, Internal Administration Transaction and Infrastructure Atlas Networks, Railway and Public Regulation, - Dortmund Performance of Duties under Postal Markets Public Affairs, Policy Issues, Network Provision, Securing Service Facilities IT Data Processing Cost Accounts, Civil Defence Market Definition, Kassel, the Renewable Energy Regulatory Authorities, Consumer Issues, Safety Authorities and Dept 4 Legal Affairs Billing Accuracy under Quality Management Organisations, Civil/Military Site Meschede, and Services Dispute Resolution Panel Market Dominance the Telecoms Customer Sources Act EU Coordination Coordination, Maritime Mobile Post Münster and Inland Waterways Services Protection Ordinance Z 16 116 316* - Eschborn Neustadt, 606 613 Ruling Chamber 6 IS 15 225 Saarbrücken, Shared Service Center (SSC) Darmstadt, Leeheim Tasks: Remuneration, Salaries, Business Management and Family Allowance Scheme, Travel Accounting Issues, Distribution Network Access and Relocation Expenses, Qualified Electronic Market Definition and Cost Accounting Post, (Electricity), Grid Development Electricity Grid Separation Allowances, Health Signatures Market Analysis Non Public Radio Applications Examination of Rate - Hamburg Kiel, Technical Policy Issues, Amateur Radio Regulation Insurance Assistance; SSC Section 12 TKG Procedures Proposals, Itzehoe Quality of Supply Management and Coordination Market Surveillance

IS 16 117 317* - Hannover Bremen, 607 MTS 226 Göttingen Legal Policy Issues Distribution Network Task Force Provision Continuity Tele- of Postal Markets Access (Gas), for the Market Ruling Chamber 7 communications and Post, Radio Relay, Aeronautical, Regulation, Transparency Unit for Numbering Policy Technical Policy Issues, Technical Implementation Radionavigation and Licensing Policy, - Karlsruhe Konstanz, Wholesale Electricity and Reutlingen of Intercepts Radiodetermination Services Licence Grant, Quality of Supply Gas Markets / REMIT Special Network Access Enforcement Gas Networks Regulation 118 318* - Köln Mülheim, IS 17 Krefeld Universal Service, Telecommunications Privacy Consumer Issues and and Data Protection Number Administration Dispute Resolution Panel - Leipzig Dresden, Compliance, Emergency Ruling Chamber 8 Post, Chemnitz, Calls, Telecoms Security, Quality of Service Erfurt Internal IT Security Measurement - Nürnberg Fulda, Electricity Grid Fees *The Chair of Ruling Chamber 5 will be in charge of Department 3's DV/IPF Schwäbisch Hall, tasks for Sections 314-318 until further notice. Würzburg Task Force Legend: Digitisation and Interconnectivity; Internet in Bonn Platforms at other locations Ruling Chamber 9 Department under construction

Use of System Charges Contact Points: Gas Headquarters: Tulpenfeld 4 Phone: +49 (0)228 14-0 Email: [email protected] 53113 Bonn Fax: +49 (0)228 14-8872 Internet: http://www.bundesnetzagentur.de

List of abbreviations

A BEMFV Ordinance concerning the Controls for the AbLaV Interruptible Loads Ordinance Limitation of Electromagnetic Fields

ACER Agency for the Cooperation of Energy BEREC Body of European Regulators for Electronic Regulators Communications

AEG General Railway Act BHE Bremische Hafeneisenbahn

AGVO General Block Exemption Regulation BMBF Federal Ministry of Education and Research

ARCEP Autorité de régulation des communications BMWi Federal Ministry for Economic Affairs and électroniques et des postes Energy

ARegV Incentive Regulation Ordinance (Anreizregu- BNetzA Bundesnetzagentur lierungsverordnung) BRLR Federal guidelines on ducts Art. Article BVerwG Federal Administrative Court ATRT Technical Telecommunications Regulation Committee C CA UPU Council of Administration AusglMechAV Ordinance implementing the Equalisa- tion Scheme Ordinance CAM Capacity allocation mechanism

B CEE Commission on the Rules for the Approval of the B2B Business-to-Business Electrical Equipment

B2C Business-to-Consumer CEER Council of European Energy Regulators

B2X Business-to-Business and Business-to-Consumer CEN European Committee for Standardization LIST OF ABBREVIATIONS | 133

CEN TC 331 Technical Committee of the European EIBV Rail Infrastructure Usage Regulations Committee for Standardization

CEP Courier, express and parcels eIDAS-Regulation Regulation (EU) on electronic CEREMP Centralised European Register for Market identification and trust services for electronic transac- Participants tions in the internal market

CERP European Committee for Postal Regulation EMVG Electromagnetic Compatibility of Equipment Act CFV-SDH Carrier leased lines - Synchronous digital hierarchy ENRRB European Network of Rail Regulatory Bodies

C-OSS Corridor One-Stop-Shop ENRRB-PRIME Platform of Rail Infrastructure Managers in Europe ct/kWh Cent per kilowatt hour ENTSOG European Network of Transmission System CWE Central West Europe Operators for Gas

EnWG Energy Act

D ERGP European Regulators Group for Postal Services DB AG Deutsche Bahn AG ERP Enterprise-Resource-Planning DB Netz AG Deutsche Bahn Netz AG F DB Station & Service AG Deutsche Bahn Station & Service AG FNB Gas transmission system operator

DIN German Institute for Standardisation FSR Florence School of Regulation

DIT Duisburg Intermodal Terminal GmbH FTTB Fibre-to-the-building

DKE German Commission for Electrical, Electronic FTTH Fibre-to-the-home and Information Technologies

DSL Digital Subscriber Line G GasNEV Gas Network Charges Ordinance DSO Distribution network operator GasNZV Gas Network Access Ordinance DUSS Deutsche Umschlaggesellschaft Schiene Straße mbH (German Road-Rail Transshipment GWB Restraints of Competition Act Company) H DVB-T Digital Video Broadcasting-Terrestrial HFC network Hybrid fibre coaxial network

E HVDC High voltage direct current ECC Electronic Communications Committee I ECJ European Court of Justice IM Infrastructure manager

IMSI International Mobile Subscriber Identity

EEG Renewable Energy Sources Act IMT International Mobile Telecommunication 134 | BUNDESNETZAGENTUR | ANNUAL REPORT 2015

IRG Independent Regulators Group O O-NDP Offshore network development plan IRG-Rail Independent Regulators’ Group – Rail ORR Office of Rail Regulation ISMS Information security management system OTT Over-The-Top IT Information technology

ITU International Telecommunication Union P PCI Projects of Common Interest

K PEntgV Ordinance concerning Rates Regulation in the KEP Courier, express and parcel services Postal Sector

km Kilometre pkm Passenger kilometre

KPI Key Performance Indicators POC Postal Operations Council

kV Kilovolt PostG Postal Act

POTS Plain Old Telephone System

L PUDLV Postal Universal Service Ordinance LTE Long term evolution

LRIC Long-Run Incremental Costs R RDC Railroad Development Corporation

M RDCD Railroad Development Corporation Deutschland M2M Machine-to-Machine GmbH

MVNO Mobile virtual network operator REMIT Regulation on Wholesale Energy Market Integrity and Transparency MW Megawatt RMMS (European) Rail Market Monitoring Scheme

RRT Communications Regulatory Authority of the N Republic of Lithuania NABEG The Grid Expansion Acceleration Act RRX Rhein-Ruhr-Express NBS Network statement for service facilities RSC Radio Spectrum Committee NC CAM Network Code on Capacity Allocation Mechanism RSPG Radio Spectrum Policy Group

NDP Network development plan RU Railway undertaking

NEMO Nominated electricity market operator

NGA Next Generation Access LIST OF ABBREVIATIONS | 135

S SIM Subscriber Identity Module

SLA Service Level Agreement

SNB Network Statement

StromNEV Electricity Network Charges Ordinance

T TAR NC Network code on harmonised transmission tariff structures for gas

TEN-E Regulation Regulation (EU) of the European Parliament and of the Council on guidelines for trans-European energy infrastructure

TC Technical Committee

TK Telecommunications

TKG Telecommunications Act tkm Tonne-kilometre

TKÜV Telecommunications Interception Ordinance

TSO Transmission system operator

U UPU Universal Postal Union

V VDE German Association for Electrical, Electronic & Information Technologies

VULA Virtual unbundled local access

VZBV Federation of German Consumer Organisations

W WRC World Radiocommunication Conferences

Z ZIVIT Centre for Data Processing and Information Technology 136 | BUNDESNETZAGENTUR | JAHRESBERICHT 2014

Contacting the Bundesnetzagentur

The Bundesnetzagentur provides reliable information and advice to anyone who wants help or has a complaint.

General enquiries about telecoms and rail Telecom provider switching Tel.: +49 30 22480-500 Fax: +49 30 22480-517 Fax: +49 30 22480-515 [email protected] [email protected] Number information rights General enquiries about electricity and gas Tel.: +49 661 9730-290 Tel.: +49 30 22480-500 Fax: +49 661 9730-181 Fax: +49 30 22480-323 [email protected] [email protected] Number administration General enquiries about postal services Tel.: + 49 661 9730-290 Tel.: +49 30 22480-500 Fax: +49 6131 18-5637 Fax: +49 228 14-6775 [email protected] [email protected] PV system registration Number misuse, spam, cold calling and call queues Tel.: +49 561 7292-120 Tel.: +49 291 9955-206 Fax: +49 561 7292-180 Fax: +49 6321 934-111 [email protected] [email protected] Energy grid expansion public liaison service Radio interference Tel.: 0800 638 9 638 (kostenfrei) Nationwide number (24 hours a day): [email protected] Tel.: +49 4821 895-555 [email protected] Publication orders Tel.: +49 361 7398-272 Fax: +49 361 7398-184 [email protected] Publication details

Editor Typesetting, layout and graphics Bundesnetzagentur für Elektrizität, Gas, Colvin Crowley-Nicol Telekommunikation, Post und Eisenbahnen Paul Preusser Press and Public Relations Tulpenfeld 4, 53113 Bonn Colvin Crowley-Nicol Tel.: +49 228 14-9921 Paul Preusser Fax : +49 228 14-8975 [email protected] Design and production www.bundesnetzagentur.de Edelman.ergo GmbH

Responsible for content. Editorial deadline Fiete Wulff 1 March 2016

Project organisation Photo credits Carolin Heitzer Maurice Weiss (page 2) Bundesregierung / Kugler (page 3) Editorial team Laurence Chaperon (page 4) Carolin Bongartz 123rf.com (kasto) (page 99) Olaf Peter Eul 123rf.com (Konrad Weiss) (page 121) Michael Reifenberg Bundesnetzagentur für Elektrizität, Gas, Fiete Wulff Telekommunikation, Post und Eisenbahnen (übrige)

Print hofmann infocom GmbH

Bundesnetzagentur Annual Report 2015 in accordance with section 122 of the Telecommunications Act Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen Tulpenfeld 4 53113 Bonn Tel: 0228 - 14 0 Fax: 0228 - 14 8872 Email: [email protected] www.bundesnetzagentur.de