Travelers used to checking e-mail for free when hopping around the world are often hit by an unpleasant surprise when searching for public Wi-Fi in Germany.

Many restaurants, cafes and hotels restrict access to their hotspots or don’t offer any at all, meaning visitors either struggle to connect or end up paying expensive roaming fees. It’s the result of a 2010 ruling by Germany’s top civil court that’s left public providers being held responsible for the illegal activities of customers using their connection.

Europe’s largest economy offers just 1.9 wireless hotspots per 10,000 inhabitants, compared with 4.8 in the U.S., 29 in the U.K. and 37 in South Korea, according to a study by Eco, a German association representing 800 Internet companies. The scarcity of free Wi-Fi in Germany has caught the attention of Chancellor Angela Merkel, who is vowing to revamp the country’s telecommunications law as part of a broader digital push.

“The thousands of tourists who visit the Reichstag building every year can’t access free Wi-Fi,” Klaus Landefeld, Eco’s board member for Internet infrastructure and networks, said of visitors to the German parliament building in Berlin. “Not because of security concerns but because of the legal liability rule for operators.”

Alexander Fitz, who has Apple Inc. founder Steve Jobs’s life motto “stay hungry, stay foolish” tattooed on his upper arm, intended to bring about his own mini Wi-Fi revolution when he took over his family’s hotel business.

Limited Access

Instead, the CEO had to drop a plan to offer open access at the 60 locations owned by his Bad Arolsen, Germany-based H- Hotels AG out of concern for the possible legal costs of ignoring the court’s ruling. Just 65 percent of German hotels offer public hotspots compared with 80 percent of locations across Europe, according to industry group Hotelverband Deutschland.

“Our international guests in particular expect free and fast Wi-Fi,” the 45-year-old Fitz said. “But German lawmakers really do not make it easy for us.”

Merkel told a hotel lobbying organization this month that Germany, an industrial powerhouse known for innovation, is lagging behind in Internet-related initiatives and badly needs to catch up. Her government is promising to introduce a bill early next year — months behind schedule — to remove the legal risks associated with providing hotspots to the public.

“We are the only ones in Europe who have such a legal construction,” said Tankred Schipanski, a lawmaker from Merkel’s governing CDU party. “We finally need a legal clarification, at least for hotels and restaurants.”

Digital Push

Rewriting the country’s telecommunications law is a key component of Merkel’s digital initiative aimed at helping German technology companies compete with the likes of Facebook Inc. and Google Inc. The plan includes having a high-speed connection in every German household by 2018. Currently about 60 percent of the country’s homes have broadband.

“The distribution of W-LAN in Germany is not as good as it is in other countries,” Merkel told the hotel association at a meeting in Berlin. “I am personally behind the effort to remedy this.”

Ansgar Oberholz, owner of a popular coffee hangout for the start-up community in Berlin’s trendy Mitte district, has developed his own Wi-Fi solution. He did away with open access at “Sankt Oberholz” after receiving cease-and-desist letters complaining his customers had violated intellectual property rights by illegally sharing files.

Legal Fees

Wi-Fi providers like Oberholz are targeted by lawyers asking them to stop any such activity and pay the legal fees for those filing the complaints. The costs can add up to thousands of euros. Choosing to ignore the letters opens up the possibility of eventually being sued.

To get around this, Oberholz’s customers now log on directly via his network provider, meaning the cafe’s IP address is no longer visible and attorneys can’t target him. Telecommunications companies are shielded under German law as network-service providers.

“We had to do something about it,” Oberholz said. “Since we’ve introduced that, we’ve had peace. We haven’t received a single new legal letter.”

Fitz ultimately decided he would require guests to log into the network at his hotels using a code granting short-term access. Starbucks Corp.’s 160 locations send customers a warning telling them not to break the law when using their network, which has helped them avoid any legal complaints, spokeswoman Susanne Richardsen said. Germany’s Internet community says such constructions are not long-term solutions.

Innovation Hampered

“The lack of free access to the Internet hampers innovation in Germany,” said Judith Steinbrecher, a spokeswoman for the Bitkom association, which represents technology companies with more than 140 billion euros ($175 billion) in revenue in Germany. “At the moment there is extreme uncertainty with regard to the legal situation.”

Merkel could start with fixing the hotspot at her party’s Berlin headquarters. At a recent forum she hosted at Konrad- Adenauer-Haus for Germany’s digital community, visitors were unable to connect to the Wi-Fi.

–With assistance from Brian Parkin in Berlin.

To contact the reporters on this story: Arne Delfs in Berlin at adelfs@bloomberg.net; Cornelius Rahn in Berlin at crahn2@bloomberg.net; Karin Matussek in Berlin at kmatussek@bloomberg.net. To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net; Kenneth Wong at kwong11@bloomberg.net; Anthony Aarons at aaarons@bloomberg.net. 

Photo Credit: Bi-lingual sign promoting free Wi-Fi in Berlin. Alper Çuğun / Flickr