Notwithstanding repeated warnings from European Union (EU) Telecom Commissioner Viviane Reding, Germany’s parliament adopted legislation late last week that exempts dominant national telecom operator Deutsche Telekom (DT) from having to provide competitors with access to its new fiber-optic VDSL network. In granting DT a “regulatory holiday,” Germany signaled agreement with DT, which argued that any requirement forcing it to open its broadband infrastructure to rivals would prevent it from recouping its high investment costs. In a letter of “formal notice” sent to Berlin on Monday, the EC gave Germany 15 days in which to respond or to change the law before a formal case is launched at the European Court of Justice. Last October, in a letter to German Minister of the Economy Michael Glos, Reding and her colleague, EU Competition Commissioner Neelie Kroes, voiced strong concerns about the draft law and warned of legal action if the law was passed. As the EC observed that the new German law “jeopardizes the competitive position of DT’s existing competitors and makes it much harder for new competitors to enter German markets,” Reding said: “the granting of regulatory holidays to incumbent operators is an attempt to stifle competition in a crucial sector of the economy, and in violation of EU telecom rules in place since 2002.” Germany, which offered no comment, could face hefty daily fines if the European Court of Justice sides with the EC.