Thursday, June 03, 2010

BT: virtual unbundling of fibre accepted by EC - for now

The European Commission has accepted Ofcom's proposals for virtual unbundled local access (VULA), which would have to be provided by BT wherever it deploys its NGA network. Ofcom's proposals were set out in two consultations which began in March and closed on 1st June - more details here.

The EC's press release makes it clear that any such virtual mechanism should only be an interim solution:
"The European Commission has decided to accept, in view of the specific circumstances of the case, the proposal of UK telecoms regulator Ofcom to oblige telecoms operator BT to provide 'virtual' access to its optical fibre infrastructure to alternative operators. Ofcom’s proposal will allow product differentiation and innovation similar to that possible through physical local loop unbundling. Ofcom’s plans will maintain competition on UK broadband markets following the roll-out of next generation access (NGA) networks by allowing alternative operators to offer competitive broadband services on these networks. However, the Commission underlined that this should only be a transitional measure and that full fibre unbundling should be imposed as soon as technically and economically possible...Only fibre unbundling will give alternative operators full and direct control over the product they offer to end-users."
The FT (BT told to share infrastructure) offered this commentary:
"The EC's decision, in the first case about fibre regulation, underlined how there will be no wholesale overhaul of the rules in spite of a step change in the infrastructure...Ian Watt, analyst at Enders Analysis, said the EC's intervention seemed aimed primarily at Ofcom rather than BT, given the UK telecoms regulator sometimes sets a standard that other national watchdogs follow. He said it was currently not technically feasible for BT to offer rivals the sort of fully unbundled solution sought by the EC. He also expressed doubts that rivals such as British Sky Broadcasting and Talk Talk were likely to want to use such a solution widely. BSkyB and Talk Talk have sought changes to BT's virtual unbundled products."

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