Then, a decade or so later, DSL became the new standard. Which, as it happens, didn't work over fibre. I'm assuming they spent more on research into making copper faster because it was much wider deployed). For a long time, your best option for your fibre line was 128kbit/s analog-modem over digital-line.
Eastern Europe's infrastructure may date from around the same time, which may make it easier to improve now. It's a second-mover advantage. Compare NTSC vs. PAL, or (maybe, not completely sure) 230V vs 110V mains.
Also, in terms of "Government regulation" there really isn't anything stopping Deutsche Telekom from improving its network. They operate on a system where they just send a notice, and it's considered to be approved if not replied to within two weeks. I'd say it's mostly a curse of not enough competition (cable isn't much faster), and a network that's currently good enough for most people.