FRANKFURT (Thomson Financial) - Germany's Federal Network Agency is mulling to exempt those cities and urban centres from DSL regulation, where companies besides Deutsche Telekom AG. are operating their own fast networks, Frankfurter Allgemeine Zeitung reported.

"Where markets and competition are working in a sustained way, we don't have to interfere. But besides opportunities, such a regional differentiation also holds risks, meaning that all aspects have to be examined very carefully before a decision is made," Federal Network Agency president Matthias Kurth told the paper.

Such a decision would mean that in highly competitive cities such as Cologne, Hamburg or Munich, Deutsche Telekom would not any longer be obliged to grant other competitors access to its networks, it added.

"Where markets and competition are working in a sustained way, we don't have to interfere. But besides opportunities, such a regional differentiation also holds risks, meaning that all aspects have to be examined very carefully before a decision is made," Federal Network Agency president Matthias Kurth told the paper.

A spokesman for Deutsche Telekom said that the competitive situation is very different regionally which should also find its way into regulation.

On Wednesday, the agency is to publish a position paper for a hearing, the paper added. christoph.steitz@thomsonreuters.com cs1/ak

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