I don't know if it's the case in Germany, but here in France consumer FTTH networks are of the GPON persuasion. These need to handle encryption and be able to properly register on the tree, so I'm not completely shocked they require some form of ISP-provided device to terminate the fiber connection.

There's also a EU law which says that users should be able to bring their own modems / routers, so AFAIK providers say that this particular terminal device is still "on their side of the network".

I've seen such devices come in two varieties.

One is a separate device which plugs on the optical network, does the encryption and stuff, and then exposes an ethernet port which is connected to the actual router which does wifi, etc. With SFR and Bouygues, it was trivial [0] to replace the ISP-provided router with one of your choosing. You get the normal external IPs and you do your thing. The ISP router sleeps in its box in storage. This was my setup up until a few years ago, with both these providers. Now SFR has moved to CGNAT, but the setup is the same, so I expect users to still be able to switch routers (but I haven't tested, since I'm not a client anymore).

Then there's Free, who provides a single device that connects to the fiber, does routing, wifi, etc. In this case, it's possible to flip a switch in its settings for it to act as a bridge (don't know how wifi behaves in this case, if it stays on). It then only accepts a single downstream client, which gets the external IP. SFR had a similar setup for DOCSIS.

I'm not familiar with how Orange, the biggest operator, functions. But I understand they have a general tendency to be a PITA so YMMV with them.

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[0] For Bouygues, this device only talked on a tagged VLAN100 for some reason. On the SFR, the network expected you to send a client id in the DHCP request.

You’d need to be able to replicate whatever configuration the ISP provided device has, and they won’t give you that.

FTTH here in Australia is the same, you’re stuck using the network providers device, which just provides an Ethernet port, and a POTS port if you’re in to that sort of thing, with your LAN device connected behind it.

There was fierce lobbying back in the day (shout out to Simon Hackett / Internode) for our national broadband network to be simple dark fibre and that ISPs could build on top of that to provide innovation and differentiation.

Instead what we got was a bunch of ISPs that resell the National Broadband Network’s expensive wholesale plans with little in the way of either differentiation or innovation.

Edit to add: what the sibling comments said too.

They most likely use GPON so the optic is going to see return traffic for your neighbors. So they make it hard (but not impossible) to bring your own optic or media converter.

If I recall, for something like GPON or XGS-PON, you end up having to clone the various attributes of the original for it to work properly. This typically includes serial number, hardware id, firmware identifiers, etc.