In a key development impacting the European telecom market, the European Commission (EC) endorsed plans by Great Britain’s Office of Communications (Ofcom) to deregulate 65% of the U.K. market for wholesale broadband services as determined by the assessment of competition on a regional, rather than national, basis. Terming Ofcom’s proposal as “one of the most important cases since the creation of the EU telecommunications code ten years ago,” a spokesman for EC Information Society and Media Commissioner Viviane Reding described Ofcom’s policy of assessing the U.K. national telecom market on a regional level as a milestone development that provides a template for other EU member states to follow. The EC also noted that the case shows how EU telecom market rules can succeed when they are implemented by an independent regulator, such as Ofcom, that promotes investment in evolving telecom infrastructure. Last November, Ofcom drew up a proposal calling for the division of the U.K. wholesale broadband market into three regional sectors: (1) those with one operator that offer wholesale broadband service at the local exchange level, (2) those with two or three wholesale broadband providers in areas where the exchange serves fewer than 10,000 customer premises, and (3) those with four or more broadband wholesalers where the exchange serves more than 10,000 customer premises. Noting that areas covered by the third category account for more than 65% of U.K. customer premises, Ofcom recommended the deregulation of the wholesale broadband market in that category. Once implemented, Ofcom’s proposal would free operators in that category, including BT, from price regulation and from rules that force them to open their networks to rivals. Praising the EC’s decision, Ofcom said it would publish a statement in the spring as soon as consultations on the plan are complete. BT CEO Ben Verwaayen applauded the EC’s action as “very welcome news” that represents “a step in the right direction.”
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EC approves deregulation of regional UK broadband markets
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