EU Okays Historic Ofcom Plan for Regional Broadband Deregulation
A U.K. Office of Communications (Ofcom) plan to deregulate 65 percent of Britain’s wholesale broadband market won enthusiastic approval from the European Commission (EC) Thursday. The case marks the first time a regulator has tailored regulation on a regional, rather than national, basis, and will serve as a template for other EU countries, a spokesman for Information Society and Media Commissioner Viviane Reding said at a press conference. This is “one of the most important cases since the creation of the EU telecommunications code 10 years ago,” he said.
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In November, Ofcom proposed subdividing Britain’s wholesale broadband market into those with one operator -- British Telecom or Kingston Communications -- at the local exchange offering wholesale broadband; those with two or three wholesale broadband providers but where the exchange serves less than 10,000 premises; and those with four or more such providers and the exchange serves more than 10,000 premises. Ofcom then recommended deregulation of the markets in the third category, which covers around 65 percent of U.K. premises, the EC said. Deregulation means the lifting of sector-specific (ex ante) rules, the spokesman said.
The case shows that EU telecommunications rules work well if there is an effective regulator that ensures evolving infrastructure and adequate investment, Reding’s spokesman said. It shows as well that the U.K. is beginning to reap the benefits of having one of Europe’s most independent regulators, he said. This is also the first time a national regulator has been willing to look at its national market at a regional level, and the EC letter of approval will give guidance and legal certainty to others moving in that direction, he said.
The EC made clear that analyzing regional rather than national markets isn’t easy. Not all regulators will be able to repeat Ofcom’s exercise because they will have to show there are at least four competitors in a particular regional market and provide a sound economic analysis backing up their proposals, he said.
The EC is aware that other regulators are monitoring the situation and expects to receive similar notifications in coming months, the spokesman said. But the threshold for identifying regional markets it high and most member countries aren’t as far advanced as the British market, he said.
Ofcom welcomed the decision and said that in the absence of EC objections it will publish a statement in the spring after its consultation on the proposal is complete.