Fulfilling earlier threats, the European Commission (EC) filed suit Wednesday over the German government’s refusal to change a law, enacted in February, which exempts Deutsche Telekom (DT) from having to provide rivals with access to its high-speed VDSL network. DT, the dominant telecom operator in Germany, currently controls more than 9 million of the nation’s 12.9 million fixed phone lines. So far, DT has invested U.S. $1.3 billion to connect 10 major German cities to its broadband VDSL network, through which it will offer customers a three-way package of Internet, telephone and TV services. DT, which hopes to extend its VDSL network to 50 cities, had threatened previously to pull the plug on the project if it was forced to open the network to rivals. Ultimately, the government adopted the legislation that is the subject of the EC suit on grounds that an exemption from network sharing requirements was needed to allow DT to recoup the substantial cost of its investment. Charging, however, that the law contradicts EU rules that give telecom market entrants the right to access incumbent networks, the EC asserted that DT’s substantial share of Germany’s telecom market already gives DT a major advantage over competitors. Following on the failure of negotiations between the EC and Germany, EU Telecom Commissioner Viviane Reding confirmed this week that the EC had taken the matter to the European Court of Justice. Observing that the EC “has repeatedly warned Germany that its new telecom law violates EU telecom rules but without success,” Reding declared: “we want to ensure Germany can benefit from a healthy, competitive and fully functioning market.”