http://www.bundesnetzagentur.de/cln_1912/EN/Areas/Telecommunications/TelecomsRegulation/AnalyticalCostModel/analyticalcostmodel_node.html

Use of Analytical Cost Models

Telekom regulation in Germany

Telecoms regulation aims to promote competition and to guarantee defined levels of service across the country. Price regulation is therefore a requirement for dominant companies. The price determinations themselves have to be made within a set of constraints anchored in the Telecommunications Act (TKG) and the Telecommunications Rates Regulation Ordinance (TEntgV).
Section 2 of the TEntgV sets out the supporting documents a company must submit with its price proposals. Common costs must be given as well as direct costs, and also their allocation to the given services. The cost statements must also provide information on the costing methodology.
The benchmark specified in Section 3 of the TEntgV is the costs of efficient service provision. These are derived from the long run incremental costs of providing the service plus an appropriate mark up for volume-neutral common costs - both inclusive of an appropriate return on capital employed - to the extent that these costs are required to provide the service.