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BT will have to fully open fibre network to rivals

The European Commission has approved BT's virtual unbundling of its fibre network, but warned that this has to be a 'transitional measure'
Written by David Meyer, Contributor on

BT will have to give rival internet providers physical access to its fibre infrastructure, the European Commission has said.

The Commission gave its approval to an Ofcom proposal that would compel BT to 'virtually unbundle' its network, but said this would have to be a "transitional measure". Full fibre unbundling should be imposed on BT "as soon as technically and economically possible", the Commission said on Wednesday.

BT is already virtually unbundling its next-generation access network, letting rivals offer competitive high-speed broadband services on these networks by means of virtual links between customers and the networks. However, this approach falls short of offering all the benefits provided by physical unbundling, the Commission said.

"In this specific instance, virtual unbundling seems the best option to safeguard competition and enable consumers to benefit from a wider range of services provided over next-generation fibre infrastructure," digital agenda commissioner Neelie Kroes said in the statement, released on Wednesday. "However, this interim solution is not a long-term alternative to physical fibre unbundling, which should be imposed as soon as possible."

Almost a decade ago, Ofcom's predecessor Oftel broke BT's near-monopoly on UK ADSL broadband by forcing the company to let rivals install their own equipment in its telephone exchanges — a process known as local loop unbundling (LLU). This approach, which the Commission now says will have to be repeated for fibre, lets rival ISPs offer new types of services, rather than simply having to resell BT's wholesale connectivity or build entire new networks.

According to the Commission, BT's virtual unbundled local access product (VULA) "should allow product differentiation and innovation similar to LLU and thus give access-seekers a sufficient degree of control, including quality of service, over the local connection to the end-user".

"However, it does not give alternative operators the same freedom to offer retail products as they could through a fully unbundled fibre line," the Commission said. "Only fibre unbundling will give alternative operators full and direct control over the product they offer to end-users."

Ofcom told ZDNet UK on Friday that the regulator welcomed the Commission's "broad endorsement" of its proposals to maintain competition in UK broadband markets as the rollout of next-generation access networks gathers pace.

The regulator pointed out that it had proposed two remedies to ensure competition: VULA and physical access to BT's ducts and poles. BT has already agreed, in principle, to both. "We will consider the Commission's detailed comments alongside the other responses to our consultation, taking into account technical and economic considerations affecting the rollout of the UK's fibre infrastructure and the need to sustain effective competition to benefit consumers and businesses," Ofcom said.

A BT spokesperson told ZDNet UK on Friday that the company was "of the view that VULA is adequate to meet our customers' needs, but obviously we'll work very closely with industry and Ofcom over the coming weeks and months on any other requirements".

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