Broadband News
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Wider Access to BT Assets - OFCOM
23 Mar 2010 | 08.29 Europe/London
OFCOM today launches two consultations into the Wholesale Broadband Access Market and the Wholesale Local Access Market.
The Wholesale Local Access market is defined as that providing business and residential services "based on copper loops, cable networks and optical fibre, at a fixed location" and specifically excludes services based on mobile, fixed wireless and satellite technologies. OFCOM's view is that BT has significant market power (SMP) in the UK excluding Hull and KCOM have SMP in the Hull area. Virgin Media therefore escape from the proposed measures on the basis that they don't have SMP in the defined markets and hence OFCOM can't make them do anything. One wonders what happened to the previous definition of Markets 1,2 and 3 and also why the high market share of VM in areas where they are present (49% ?) does not qualify as SMP.
Two new measures are proposed to address BT's dominance - Virtual Unbundled Access (VUA) to BT's FTTC and FTTP NGA infrastructure and Physical Infrastructure Access (PIA) to allow other providers to use BT ducts and poles to carry fibre. BT would have three months to prepare an offer for PIA and 8 months to launch a product with the clock likely to start around August 2010 after the consultation runs to 1st June 2010.
OFCOM see VUA as the most promising way to offer competition to BT's NGA products in the same way as LLU competes with 1st generation DSL broadband. The difference between VUA and BT Openreach's GEA products is that the latter comes bundled with either a phone line service (FTTC) or a phone service over fibre (FTTP). The VUA proposal is for "naked broadband" not requiring an attendant phone service or line rental.
The Wholesale Broadband Access market was previously reviewed in 2008 leading to the definition of three geographical markets with different levels of competition. The primary proposal of this consultation is to impose cost based charge controls on BT in Market 1 (typically rural area or small exchanges where only BT is present). At first glance charge controls might suggest price reductions, but the mechanism yet to be defined could result in higher charges if the cost of supply in those areas is demonstrably higher than current prices imply.
[ WBA ] [ WLA ]
The Wholesale Local Access market is defined as that providing business and residential services "based on copper loops, cable networks and optical fibre, at a fixed location" and specifically excludes services based on mobile, fixed wireless and satellite technologies. OFCOM's view is that BT has significant market power (SMP) in the UK excluding Hull and KCOM have SMP in the Hull area. Virgin Media therefore escape from the proposed measures on the basis that they don't have SMP in the defined markets and hence OFCOM can't make them do anything. One wonders what happened to the previous definition of Markets 1,2 and 3 and also why the high market share of VM in areas where they are present (49% ?) does not qualify as SMP.
Two new measures are proposed to address BT's dominance - Virtual Unbundled Access (VUA) to BT's FTTC and FTTP NGA infrastructure and Physical Infrastructure Access (PIA) to allow other providers to use BT ducts and poles to carry fibre. BT would have three months to prepare an offer for PIA and 8 months to launch a product with the clock likely to start around August 2010 after the consultation runs to 1st June 2010.
OFCOM see VUA as the most promising way to offer competition to BT's NGA products in the same way as LLU competes with 1st generation DSL broadband. The difference between VUA and BT Openreach's GEA products is that the latter comes bundled with either a phone line service (FTTC) or a phone service over fibre (FTTP). The VUA proposal is for "naked broadband" not requiring an attendant phone service or line rental.
The Wholesale Broadband Access market was previously reviewed in 2008 leading to the definition of three geographical markets with different levels of competition. The primary proposal of this consultation is to impose cost based charge controls on BT in Market 1 (typically rural area or small exchanges where only BT is present). At first glance charge controls might suggest price reductions, but the mechanism yet to be defined could result in higher charges if the cost of supply in those areas is demonstrably higher than current prices imply.
[ WBA ] [ WLA ]