German Federal Network Agency adopts classification for telecommunications services, clarifying role of autonomous vehicle radio connections

Autonomous driving requires a variety of radio connections. Until now, there has been uncertainty as to whether these connections are telecommunications services subject to regulation. The Federal Network Agency (FNA), as the regulatory authority responsible for the Federal Republic of Germany, recently issued its first statement on the classification of such services, which confirmed the previously prevailing view in the market.

Radio connections in autonomous driving

Autonomous vehicles communicate with their surroundings and central server infrastructures in various ways.

The immediate environment is scanned using LiDAR (light detection and ranging) to detect obstacles. LiDAR sensors detect the environment using a laser beam and a photo sensor that measures the time until the laser beam hits an object and is reflected.

Communication with other vehicles and the traffic infrastructure (Car to X – C2X) takes place in C-ITS, for example. C-ITS stands for cooperative intelligent transportation systems. Information about traffic situations, such as traffic jams, weather conditions and road conditions, information about rescue and police operations, wrong-way drivers and obstructing vehicles is transmitted. Vehicles or roadworks permanently transmit signals that are received and processed by the approaching vehicle. The data is exchanged via WLAN or, alternatively, mobile communications technology.

The connection to the car manufacturer’s servers to, for example, download updates or check the vehicle status is usually established via the mobile phone network or WiFi.

In addition to the services mentioned, a vehicle generally uses the mobile network to provide connectivity for other services. For example, eCall, which is required by law in the EU, is provided via a SIM card (eSIM), which is built into the vehicle. Infotainment services (concierge and service calls, navigation, location and weather services) also require a connection to the mobile network. In addition, in some cases users can also generate a wireless hotspot in the vehicle and surf the open Internet.

Importance of the telecommunications service classification

Whether a telecommunications service is subject to the German Telecommunications Act (TKG) is of considerable importance for service providers. Many provisions of the TKG, in particular those relating to customer protection and public safety, are linked to the existence of a telecommunications service.

This applies, for example, to requirements in the TKG for the design of contract summaries prior to and upon conclusion of a contract or for the design of invoices. Certain customer data must be stored (in some cases domestically) and handed over to the FNA or security authorities on request. Furthermore, in addition to general data protection requirements of (GDPR), the provision of special telecommunications data protection must also be complied with.

If a telecommunications service exists, these requirements must be implemented, and the service provider must report its activities to the FNA.

Statement by the FNA

In March 2023, the FNA issued a statement on the question of how such services should be classified. Although the statement concerns M2M (machine-to-machine) services in general, it is clear that autonomous driving is also to be addressed.

The issues that have now been clarified have long been the subject of discussion among manufacturers and their (legal) advisors, who have tended to refrain from asking the authority for assessments—so as not to provoke a decision that would be detrimental to them. The regulator has now made a statement—thanks to a number of M2M and IoT (Internet of Things) service providers from various business sectors who have submitted inquiries in the meantime.

The regulatory authority has now explained how it classifies and distinguishes certain constellations.

1. Telecommunications services only exist if they are provided for third parties. Radio connections from vehicle to vehicle or vehicles to infrastructure (C2X), as in the case of C-ITS, are not telecommunications services and are therefore not subject to regulation.
   
2. The M2M service in itself is not a telecommunications service. This is clear from the explanatory memorandum to the law, which separates signal conveyance (connectivity) from the content component. The content component, such as a weather app, is a so-called over-the-top (OTT) service, which is provided via the open Internet.
   
3. The underlying signal conveyance (connectivity) is usually a telecommunications service. The provider of this service (at an upstream level) is the (virtual) mobile network operator.
   
4. Particularly relevant is the case in which the provider of the M2M service sells the user a “package,” combining signal transmission and a content component. While the resale of telecommunications services can lead to the reseller itself also becoming a provider of such services and thus also subject to regulation, the FNA has now clarified that the connectivity is an upstream product and that the providers of the M2M or infotainment services are therefore not to be classified as providers of the underlying connectivity. The key prerequisite is that signal transmission is only a necessary but subordinate component of the offering. Such an M2M or infotainment service is then not subject to regulation under the TKG.
   
5. By contrast, a telecommunications service exists if the provider of the M2M service concludes an independent contract with the user for the connectivity service, or if the signal transmission is also used for other applications, such as surfing the open Internet or for telephony or messenger services. However, this does not apply when it is only possible to call certain, predefined numbers, as it is the case with eCall, concierge services or calls to the manufacturer’s service center. In such constellations, the service is not equivalent to classical telephony and therefore not classified as a telecommunications service.

Significance for the automotive industry

Generally, the FNA statement is to be welcomed. Even though the view had already prevailed on the market that providers of M2M and infotainment services were not regularly to be classified as providers of telecommunications services, the regulatory authority’s assessment now gives many providers legal certainty. In particular, the fact that C2X/C-ITS connections do not constitute telecommunications services provides certainty. Previously, some argued that although they were telecommunications services, the car manufacturer should not be regarded as the provider of these automatically established connections, and therefore should not be subject to regulation.

Providers of connectivity-based services in the vehicle must be aware before the rollout whether the service in question is a telecommunications service. There are various technical and contractual options to avoid this classification, and the respective mobile communications provider should be involved in the discussion and the specific design. In any case, it must be carefully examined who assumes which obligations resulting from the TKG and which information must be made available to the user at what time.

If the carmaker takes the step of becoming a provider of telecommunications services itself (German automakers have already gone down this path in some cases), it is important that the relevant processes in the areas of customer contact, cybersecurity, billing, data storage and data protection be implemented within the company, which can involve considerable effort.