On Monday, the European Union launched a legal case against Germany for passing legislation that would keep rival telecommunications companies off Deutsche Telekom's Internet network through a regulation holiday.

The German Parliament had passed the law last Friday that exempted Deutsche Telekom from regulation or requirement that the company must offer its €3 billion broadband infrastructure to competitors.

Germany should not be surprised with the case being made by the European commission. Last October, the EU competition Commissioner Neelie Kroes sent a letter to the German minister of the economy Michael Glos warning that the draft legislation was not in line with European law.

The case could be escalated to a European court of justice in Luxembourg if Germany decides not to alter the new legislation. Germany will have 15 days to respond to the European commission's letter.

"I regret that Germany has chosen to ignore the Commission's concerns about this new telecom law despite several clear warnings from the Commission," said European Union Telecom Commissioner Viviane Reding in a statement.

Deutsche Telekom controls most of the broadband market in Germany, and as most know is currently working on rolling out FTTC/VDSL2 to 50 cities for their IPTV service. Deutsche Telekom contends they require the capacity of the broadband network to guarantee quality of service to their customers.

Various organizations have speculated that DT would move away from VDSL2 and possibly to ADSL2+ for their IPTV rollout if they didn't receive the protection for unbundling and wholesaling their VDSL2 service.

Germany defends the new legislation stating that Deutsche Telekom should be protected due to the massive investments in their broadband infrastructure.