GERMAN CEO PRAISES FCC'S POWELL FOR DEREGULATORY PHILOSOPHIES
Deutsche Telekom CEO Ron Sommer told U.S. Chamber of Commerce Wed. that FCC Chmn. Powell had right idea when he said he must justify effectiveness of regulation. “I would like to think that most, if not all, regulators will move toward” that view, Sommer said. He said he had argued that over last decade or so that “judicious restraint” by regulators had allowed companies such as his to push new and better services out to consumers. He cited as example U.S. govt’s early and “wise” decision to adopt “laissez-faire” approach with Internet. Sommer said that was one reason why proliferation of Internet access had been “so successful.” He also cited European govts.’ similar approach to wireless: “It’s no accident that mobile communications today is the only sector in the telecommunications industry in which Europe is significantly more competitive than the United States.”
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Deutsche Telekom, former German telephone monopoly that entered U.S. market 9 months ago with its purchase of VoiceStream wireless, still gets what Sommer described as “enormous attention” from German regulators, much to his chagrin. He bemoaned German Cartel Authority’s recent decision not to allow Liberty Media to acquire 6 German cable systems from Deutsche Telekom: “I think it was a bad decision, bad for my company, bad for the country.” But he expressed optimism that those systems -- deemed nonstrategic to Deutsche Telekom’s voice and data focus -- would be sold. He declined to give timetable, saying company executives still were in process of putting those systems back on market. One problem with regulators on “both sides of the Atlantic,” he said, is slow pace at which they make their decisions, making companies postpone investments and lose opportunities, ultimately hurting consumers. Deutsche Telekom, in seeking to be global telecom company, also must confront different regulatory rules for each country, he said. “At the moment, the playing field is not level yet, in the sense that definitions, rules and standards have not been harmonized,” Sommer said. He advised U.S. regulators and lawmakers to be more open to foreign investment, obliquely referring to some U.S. objections to VoiceStream purchase. And he said European Union regulators “must rethink” their tendency to increase regulation on Internet.
Sommer’s comments came after company had posted wider- than-expected loss of more than $3 billion for year. Company attributed loss in large part to VoiceStream acquisition. In his U.S. Chamber appearance, Sommer cited SEC regulations in declining to comment on what was widely expected to be IPO later this year for T-Mobile, his company’s mobile operations, including VoiceStream.