Germany's telecoms industry regulator BNetzA approved in November Deutsche Telekom's plan to use vectoring technology to double the bandwidth of the existing copper lines running from a fibre-connected central distribution point to give download speeds of up to 100 Mbps instead of running fibre all the way into homes and offices - known as 'fibre to the premises' (FTTP).

However that caused an outcry from competitors, such as Vodafone, who argued that the plan would harm competition.

Vectoring technology only works when applied to a whole bundle of copper cables, meaning individual lines cannot be physically unbundled to give access to alternative operators.

Rivals would get "virtual" access to the copper 'local loop' network, but the Commission said this arrangement would deny the degree of control necessary to differentiate their retail offers from those of Deutsche Telekom.

The Commission said that the plan appeared to have a "considerably restricting effect on alternative operators who buy access from Deutsche Telekom" and would discuss it with the German regulator over the next three months.

If no solution is found at the end of that period the Commission could ask the German regulator to withdraw or amend its decision.

"Our aim is to allow both a network upgrade and high quality access for competitors," said Guenther Oettinger, the EU's commissioner for telecoms.

Vectoring technology is an intermediate solution and the Commission says it has concerns that Deutsche Telekom's plan could have an impact on incentives for fibre investment over the longer term.

However, Deutsche Telekom said that it expected the German regulator's decision would eventually be upheld in Brussels.

"Without vectoring many rural areas will remain in the monopoly of cable providers and will be excluded from competitive offers," the company said in a statement.

Former national network monopolies like Deutsche Telekom and BT in the UK say the application of new copper-based G.fast technology is a far cheaper way to get more people hooked up sooner to high speed broadband than aiming to run new fibre into every building.

ECTA, the European Competitive Telecommunication Association, which represents challenger operators such as Vodafone and TalkTalk, said it welcomed the Commission's investigation.

"ECTA has very serious concerns regarding the consequences of this measure which, if implemented, would jeopardise sustainable competition by wiping out challenger operators from the market and obstructing the path of their fibre investments," said Gijs Phoelich, Chairman of ECTA.

(Additional reporting by Harro Ten Wolde in Frankfurt; Editing by Philip Blenkinsop, Greg Mahlich)

By Julia Fioretti

Stocks treated in this article : Deutsche Telekom AG, BT Group plc, Vodafone Group plc