The measures proposed by Vodafone to the EU Commission to obtain approval for the acquisition of Unitymedia miss the point, according to German commercial broadcaster association VAUNET.
They should therefore have no impact on the Commission’s evaluation of the case, according to the association. In its concession package, Vodafone proposes an agreement allowing Telefónica Deutschland to offer its own broadband products on Vodafone’s network. Secondly, Vodafone intends to commit itself to maintaining sufficient capacity for OTT services from TV broadcasters and not to restrict the distribution of broadcasters’ content over the internet.
“In view of the differentiated debate and corresponding criticism of the merger project by competitors and affected parties, these woodcut-like proposals can only astonish. All the more so because the commitments offered mainly reflect what Vodafone is already obliged to do under existing laws. For example, the opening up of broadband access to equal, non-discriminatory conditions is already laid down in telecommunications regulation. And maintaining net neutrality must be a matter of course even without a commitment,” VAUNET managing director Harald Flemming said in Berlin.
Since the merged company would bundle around 80% of cable subscriptions in Germany, the association fears that it will be easy for Vodafone to dictate the conditions for visibility of content and the commercial conditions for pay-TV and free-to-air TV in future. This would apply not only to carriage fees, but also, for example, exclusivity windows for the distribution of content on the platform and the capacities made available for broadcasting in DVB-C standard as well as access to data.
“The measures proposed by Vodafone do not in any way consider our concerns in the area of cable distribution beyond IPTV and OTT. Nor do they show any improvement in this respect. Our concerns expressed to the Commission thus remain unchanged. We therefore call on the Commission to take them into account in its examination, as outlined,” said Flemming.
The association also criticises Vodafone for making it too easy for the company to simply take over commitments from the Dutch merger between Ziggo and Liberty Global. The market there can’t be compared with the situation in Germany, argues VAUNET, adding that for the very specific German market, regional commitments would have to be made. This was another reason why the commitments submitted to the EU Commission can’t remove the concerns of commercial media providers in Germany.
The opening of the network to broadband products from third parties would in no way reduce Vodafone’s dominant position regarding commercial media received via a cable, criticises VAUNET. Content providers remained “dependent on an agreement with the new monopolist” if they wanted to create an economic basis for their existence in Germany. The existing IPTV and OTT offers had not disrupted the cemented distribution structures in the cable market and this would hardly change even with a new offer.
Classic cable subscribers would rarely change providers, not least because the cable subscription fees are often paid within the service charges associated with the apartment rent, the association points out. Thus, if the merger takes place, the commercial broadcasters’ ‘bread and butter business’ would remain almost exclusively dependent on Vodafone.