Friday, 12 April 2013

Fibre Unbundling

Back in June 2010 when BT agreed with Ofcom that it could charge what it liked for access to it's new fibre based broadband access service, Ofcom gave them four years of freedom.  We're now three years into this, so perhaps next year will see some changes in the market.

The deal BT struck was two fold, first to forgo caps on pricing - the subject of criticism from TalkTalk and others in recent weeks - and secondly to offer unbundled service rather than bare cables, called "Virtual Unbundled Line Access" or VULA, back then.  This limits competitors to reselling the same services that BT retails, and given BT control the price; this isn't competition at all.

In 2010 the problem was recognised at the highest level.  EU competition commissioner Neelie Kroes 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. However, this interim solution is not a long term alternative to physical fibre unbundling, which should be imposed as soon as possible.
Inevitably I don't think BT will be rushing to meet this objective - they are likely very happy with the "interim solution" and we will hear no more about it.

No comments:

Post a Comment