German Telecommunications Act amendment

In mid-2022, the German federal government’s draft for the transposition of the European regulatory framework for telecommunications (the European Electronic Communications Code) was submitted to the German Bundestag. In the field of market regulation, the principle of regulating market power was retained. New features involved the introduction of co-investment and cooperation models for the roll-out of high-performance networks. When it came to the field of customer protection, numerous new provisions were initiated. Furthermore, an entitlement to provide telecommunications services was added as a successor regulation to the universal service. In the field of security requirements for telecommunications companies, some of the regulations became considerably more stringent. Telecommunications surveillance was also expanded. eco actively accompanied the Telecommunications Act (TKG) amendment and took a regular stand on this topic. On behalf of its members, eco will continue to accompany the further transposition and shaping of the amendment.

Telecommunications Act implementation

The member companies from the telecommunications sector have an ongoing concern about the implementation of the obligations from the amended German Telecommunications Act (TKG). Among other factors, their concerns relate to the fields of customer protection, the right to be supplied with telecommunication services and new security requirements.

In the field of customer protection, what is considered to be important is consumer mitigation regarding deviations in Internet speeds for landlines. eco has submitted comments on this on several occasions.

With regard to the right to the provision of telecommunications services, a more concrete definition was introduced. This right serves the primary care of the Internet and telephones. After the German Federal Ministry for Digital and Transport (BMDV) and the Digital Committee of the Bundestag declared their agreement, the German Federal Council (Bundesrat) also approved the telecommunications minimum supply ordinance regarding the minimum requirements (download, upload, latency).

For the member companies involved, it is important that the privately funded roll-out is not delayed and that no artificial supply gap is created by shutting out the Internet via satellite.

The security requirements were made considerably more stringent in the Telecommunications Act (TKG) amendment and became far more complex. Above all, this affected the 5G network operators. The security catalogue has now been contested via an appeal. The 5G network roll-out is thus delayed and the uncertainty in law and in planning further burdens companies.

The German Federal Ministry for Digital and Transport (BMDV) has adopted a gigabit strategy, while the German Bundestag has expressed its support for this initiative. Ambitious and targeted planning of regulatory measures and other actions by all stakeholders are considered to be essential for successful gigabit roll-out. This roll-out forms part of the provision of services of general interest and strengthens Germany’s competitiveness. eco has commented on this several times and considers the swift implementation of the gigabit strategy’s measures to be a priority.

Fair share – infrastructure levy

In January 2022, the EU Commission presented a “European Declaration on Digital Rights and Principles for the Digital Decade”, in which it envisages the “fair and appropriate participation” of all market participants in the infrastructure costs for connectivity networks. Against this background, the so-called “fair share” debate has unfolded. This deals with the question of whether the large content and application service providers should participate in the costs of digital connectivity networks and whether regulatory intervention in the European Union would be appropriate.

eco is tracking the current debate and the associated processes at national and EU level. For this purpose, eco has written a white paper that reflects the essential aspects of the discussion. The paper, entitled “Internet Interconnection and Infrastructure: On the Debate of Infrastructure Cost Sharing”, has been made available to all relevant stakeholders.

In a BXLTalk, eco took up the discussion and initiated the internal exchange with member companies on this topic.

The EU Commission has announced a consultation on the future of the connectivity sector and connectivity infrastructure, seeking views on the changing technology and market landscape and possible impacts on the electronic communications sector. This focuses on which players should contribute to the investment in connectivity infrastructure in the future.

Net neutrality

In the summer of 2022, the Body of European Regulators for Electronic Communications (BEREC) adopted the updated guidelines for the design of the Telecommunications Single Market Regulation (TSM Regulation), which is intended to protect net neutrality and enable innovation. The main modification is the deletion of the comprehensive assessment guidance for zero-rating offers. The background to this was the 2021 case law of the European Court of Justice (ECJ). This came up with an unexpected ruling, stating that such offers are generally not in accordance with the TSM Regulation. The TSM Regulation is also intended to protect the Internet in terms of a low-threshold opportunity for market access and as a room for innovation. In eco’s view, BEREC should take these objectives even more into account in the future. This was also referred to by eco in its statement.

Digital Services Act

In December 2020, the Digital Services Act (DSA) was presented as the successor to the E-Commerce Directive (ECRL). After negotiations in the Council and the Parliament, the trilogue talks between the institutions involved in the EU legislative process took place at the beginning of 2022. After approximately three months, the Council and the European Parliament reached an agreement on the legislative proposal in April 2022, which was then confirmed in the plenary in July 2022. The DSA finally entered into force on 16 November.

eco actively accompanied the legislative process and raised key points of critique during the negotiations. The DSA introduces new measures for combatting illegal online content and obliging platforms to react quickly, to be more transparent and to be more accountable. It also aims to ensure more traceability and controls on retailers in online marketplaces.

In the transposition of the DSA, its harmonising character means that the German national legal framework must be thoroughly revamped. This applies to the German Telemedia Act (TMG) and the German Network Enforcement Act (NetzDG), and is also likely to apply to the Protection of Young Persons Act (JuSchG). For the German transposition, a national Digital Services Act which will incorporate the TMG is envisaged, while the German Network Enforcement Act (NetzDG) is to be largely revoked. The first preliminary work for the German Digital Services Act was undertaken by the German Federal Ministry of Health (BMDV) at the end of 2022. A draft for the German Digital Services Act is expected in spring 2023. eco will continue to actively accompany the transposition of the DSA.

Digital Markets Act

The Digital Markets Act (DMA) aims to ensure fair and contestable digital markets on the basis of ex-ante obligations for central platform services – so-called “gatekeepers”. In January 2022, the trilogue talks on the DMA began with the participation of the EU Parliament, the EU Commission and the Council. While some contentious issues, such as the extension of the scope of application, could already be resolved before the second meeting in February, more time was required to reach compromises on the identification of gatekeepers, on the associated prohibitions and restrictions, and on possible interoperability obligations. At the fourth meeting on 24 March, final disagreements were resolved, and an agreement was reached on the design of the DMA. Meanwhile, the future enforcement was further discussed in the summer. Factors which were subject to critique were both the increase in competence and the necessary recruitment of staff for the EU Commission.

The DMA was adopted by the European Parliament and the Council on 14 September 2022, entered into force on 1 November 2022, and will apply from 2 May 2023.

CSAM Regulation – Child abuse content

In May 2022, the European Commission adopted a proposal for a “Regulation on laying down rules to prevent and combat child sexual abuse” (the CSAM Regulation). This aims to introduce proactive search and removal obligations for Internet service providers for known and new content, as well as for grooming. What this also entails is a reliance on technological efficiency and a crackdown on end-to-end encryption on the Internet. Further elements of the proposal that are negatively viewed include short deadlines and Internet blocking. What’s more, the proposal introduces the need for an EU Centre and ignores the role of hotlines, the latter which have been successful for over 25 years in combatting illegal online content.

eco first commented on the proposal via a background paper and subsequently published a detailed statement.

One of eco’s goals was to bring more objectivity to the frequently intense discussions by providing relevant information. eco also supported this initiative on the strength of two online workshops.

e-Evidence Regulation

The regulation on the cross-border access to electronic evidence and the release of electronic data (inventory, traffic and content data) was the subject of negotiations between the European Parliament and the European Council over a long period of time. The political trilogue was concluded at the end of 2022, meaning that the adoption of the regulation was set to take place in 2023. eco contributed to the ministries’ and institutions’ discussions at European and national level and has issued several remarks on this topic.

Terrorist content online

At the end of 2020, the negotiators of the European Parliament and the Council of the European Union agreed on a common text for the “Regulation on preventing the dissemination of terrorist content online” (TCO). At the start of 2021, the outcome of the negotiations was endorsed by both the Council and the Parliament and published in the Official Journal on 17 May 2021. As of 7 June 2022, content reported by authorities must be removed within one hour. Service providers have to publish transparency reports on the measures taken.

National legislators are obliged under Article 12 TCO to ensure that competent authorities are designated, empowered and equipped. Under Article 21 TCO, Member States are also mandated by the EU legislator to monitor hosting service providers under their respective jurisdiction and to send the relevant information to the Commission. In addition, as explicitly listed in Article 18 (1) TCO, the Member States are mandated to lay down the rules on penalties applicable to infringements by hosting service providers.

For this purpose, the German Federal Ministry of the Interior (BMI) has issued an implementing law (TerrOIBG). Among other measures, eco has contributed a statement (German-language) and a joint letter on this legislative process.

Data Institute of the German federal government

In its coalition agreement, the German federal government adopted a resolution to establish a Data Institute. This institute is to help make data more usable. Specifically, the agreement states: “A Data Institute is to drive forward data availability and data standardisation and implement data trustee models and licences.” In October 2022, the German federal government launched a stakeholder consultation on the more detailed design of the institute. eco participated in this consultation and formulated its own key points for a Data Institute.

The results of the consultation were incorporated into the key points of the draft, which were presented by the appointed founding commission for the Data Institute at the Digital Summit on 6 December 2022. These cornerstones envisage the establishment of three different use cases that result from concrete problems and needs in the use of data. The aim is to avoid duplicating structures with existing actors. From this, concrete and scalable solutions for problems in the area of data use are to be derived.

The institute is to be funded with a total of 30 million Euro until 2025. In 2022, these funds were not yet released by the German Bundestag, as a complete draft must first be drawn up from the key points that have been presented. The German Federal Ministry of the Interior (BMI) and the German Federal Ministry for Economic Affairs and Climate Action (BMWK) are involved in the process. eco will continue to actively follow the foundation process.

Data economy

The debate on the regulatory framework for the data economy has not only gained relevance in the political discourse via planned legislation such as the Data Act or the Data Institute; namely, since data-driven business models are considered by both the German federal government and the EU Commission to be highly relevant for the future value creation of the European and German economy, further regulatory projects can be expected for the data economy. These are already laid out in the EU Data Strategy and the German federal government’s current coalition agreement.

In this context, eco has drafted guidelines which define principles for a data economy. These will form the basis for the monitoring of future laws and initiatives concerning data-driven business models and data use. In the guidelines, eco calls, inter alia, for legally secure framework conditions for the international exchange of data, more legal certainty in the handling of data overall, as well as the promotion of data standards. In addition, market economy principles must remain valid in the design of an innovation-friendly legal framework for a data economy in Europe, also with regard to the rights of use and access to data.

Digital identities / eIDAS

In the past year, eco also adopted a position regarding the field of digital identities. In connection with the amendment of the eIDAS Regulation at the European level – which is intended to create a legal framework for an ID wallet that can be used and interoperated throughout the EU – eco drafted guidelines for such an ID wallet. In this context, eco’s focus has been placed on an open ecosystem that enables competition between different wallet providers for the most user-friendly solution. The Council already adopted its position on the eIDAS amendment on 6 December 2022. This calls for better protection of data and some additional functions for the wallet. In Parliament, however, the decision on a report is still pending. On the basis of its guidelines, eco will continue to accompany the trilogue that is due to take place in the coming year.

Aspects of sustainable digitalisation

In early 2022, it was announced that the ecolabels developed by the German Environment Agency (UBA) to qualify energy-efficient data centres and climate-friendly co-location data centres are to be revised. The Öko-Institut e.V. has been commissioned by the UBA to revise these ecolabels. In April, eco hosted an expert exchange between member companies and the Öko-Institut e.V. Following this, eco developed key points for the revision of the Blue Angel ecolabels.

At the beginning of 2023, the ecolabels for data centres and co-location data centres were once again revised and consolidated. The Blue Angel ecolabel for data centres is intended to provide a more flexible assessment of the different business models in data centres’ operation. However, eco is of the view that there is still a need for some adjustments for improvement in order to guarantee the ecolabels’ innovation-friendliness and market acceptance.

Energy and climate policy

In January, the EU Commission launched a consultation on projects in the field of renewable energy authorisation procedures and power purchase agreements for the renewed adaptation of the European Renewable Energy Directive. eco drafted a position paper and tabled it in the consultation process.

The Russian military attack on Ukraine at the end of February 2022 brought the meaning of existing geopolitical relations in the field of energy and climate policy to a whole new level. In addition to various sanctions packages in the months that followed, in mid-May, the EU Commission presented a plan entitled “REPowerEU” to reduce dependence on fossil fuels from Russia and to accelerate ecological change. In mid-July, the Committee on Industry, Research and Energy (ITRE) adopted its report on the revision of the Energy Efficiency Directive and the Renewable Energies Directive. In this report, the Committee recommended increasing the share of renewable energies to 45 per cent by 2030 (instead of the 40 per cent set out in the EU Commission’s proposal), and to simultaneously increase energy efficiency by 40 per cent (instead of the 36 per cent also set out by the Commission). The ITRE reports were adopted in the European Parliament in September. To further accompany the trilogue process, eco published two position papers on the Energy Efficiency Directive and the Renewable Energy Directive in December 2022. The conclusion of the negotiations and the approval of the Council and Parliament are expected in spring 2023. The directives are thus expected to enter into force before the end of 2023.

At the national level, the new German Federal Minister for Economic Affairs and Climate Action (BMWK), Dr. Robert Habeck, presented the opening balance sheet on climate protection in January 2022 and introduced two packages of measures – the Easter and Summer Packages – to revise German energy laws. The Easter Package aimed, inter alia, to increase the share of renewable energies in the German electricity consumption, to speed up construction and approval procedures, and to ensure the financing of the surcharge for the expansion of renewable energies from the federal budget. As early as March, the BMWK presented several draft laws to implement the Easter Package.

The intention of the draft law to reduce the cost burden of the Renewable Energy Law (EEG) surcharge and to pass this reduction on to end consumers was to create the legal basis for financing the expansion costs for renewable energies from the federal budget. eco pointed out the competitive situation of the Internet and digital economy in a position paper and called for the Renewable Energy Law (EEG) surcharge to be financed from the federal budget, without exceptions. A few weeks later, the draft bill on immediate measures for an accelerated expansion of renewable energies and further measures in the electricity sector was presented. eco compiled key points on the draft bill, including a reference to the sector-specific climate goal (climate-neutral data centre operation from 2027 or by 2030) and submitted these points to the BMWK’s participation processes. The draft bill was passed by the German Bundestag and the German Federal Council (Bundesrat) before the summer break.

The Summer Package included aims to create a framework for a German Energy Efficiency Act and waste heat utilisation and to promote the establishment and expansion of municipal heating grids. However, due to the increasingly critical energy policy situation, this was not implemented in its original form. Instead, the planned measures, such as the Energy Efficiency Act, are being launched as individual projects.

Electricity price brake

Due to the Russian war of aggression on Ukraine, the energy supply situation in Germany is currently problematic. Natural concerns exist about electricity supply and voltage drops on the grid. In light of these trends, energy prices have risen sharply, in spite of all of the efforts of the German federal government, the regulatory authorities and the energy suppliers. The German federal government has therefore decided to introduce temporary emergency measures to relieve the burden on consumers within the framework of a law which introduces an electricity price brake.

The electricity price brake was passed by the German Bundestag in December 2022 and has applied retroactively since 1 March 2023. However, as a particularly electricity-intensive industry, data centres are not taken into sufficient account. In addition, the provision regarding the levying of special profits due to the crisis runs the risk that PPAs can no longer be offered economically. This would remove a necessary instrument that is indispensable for achieving the German and European climate targets. Even the amendment planned for summer 2023 does not promise any improvements in this regard.