UK to escape EC telecoms wrath

The European Commission is likely to let Britain escape legal action over broadband competition, according to a source familiar with the issue

Claims that Britain could face legal action over the level of competition in its broadband market are wide of the mark, according to those close to the issue.

ZDNet UK understands that a European Commission report due to be published on Monday will say that Britain is making better than average progress in many areas of the telecoms market, despite reports that the EC will express deep concern about the amount of competition in Broadband Britain.

According to an informed source, the latest EC annual report on the telecoms sector -- to be published on Monday -- will say that the UK is doing better than many other European countries in terms of the rollout of 3G networks, domestic Internet use and take-up of digital TV.

The report is also expected to recognise the boom in broadband use over the last 12 months in the UK.

The UK, though, is likely to face criticism for the failure of local-loop unbundling (LLU) to make an impact on BT's dominance of Britain's wholesale ADSL market.

The EU forced all member states to introduce LLU as a way of bringing competition to the broadband infrastructure market. It allows other operators to install equipment in the local exchange of the incumbent operator -- BT, in the case of Britain -- and provide services such as broadband to ISPs, or directly to customers.

Since it came into effect in 2001, LLU has had little effect in Europe. In the UK, fewer than 1,000 telephone lines are thought to have been unbundled. Over 20 companies initially expressed interest but all but a handful have now dropped out -- many accusing BT of deliberately obstructing the process so as to maintain its wholesale monopoly.

BT has denied this, but similar charges have been laid against regulators across Europe, and senior figures in the commission are known to be very concerned about the state of LLU.

The UK government insists, though, that Britain enjoys a competitive broadband market.

"Sixty percent of broadband connections are supplied by NTL and Telewest, and there are over 100 ISPs reselling BT's ADSL," a DTI spokeswoman said, adding that LLU has been generally disappointing across all of the EU, not just in Britain.

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