EU Commission De-Regulates British Broadband

12.00.00am GMT Thu 14th Feb 2008

Sharon Bowles MEP, Liberal Democrat Spokesperson on Competition and Intellectual Property, has welcomed the de-regulation of the British Broadband industry by the EU Commission.

The move follows the request by British regulator, Ofcom, to divide the UK broadband network into three separate zones to reflect varying degrees of competition. The decision will remove regulation from 65% of homes and businesses where consumers already benefit from competition between four or more providers.

In the remaining areas where service is dominated by only one, two or three providers, regulation to break up monopolies and encourage competition will remain.

Key to the decision is the policy of Functional Separation introduced by Ofcom in 2001. This forced BT to separate its telecoms infrastructure from its customer service units. This has allowed new broadband service providers into the market and has facilitated equal competition with BT. The result has been increased competition and the Commission's landmark decision.

Commenting, Sharon said "The strength of the British regulatory system has been reflected in the Commission's ruling. The United Kingdom is the first country in Europe where regional regulation has been applied and it reflects the progress made by Ofcom and the Broadband industry.

"I believe this has illustrated regulation at its best. Where necessary it can be used to stimulate competition, investment and provide a fairer deal for consumers. Once regulation has achieved its goals, as it has in this instance, it can and should be removed.

"This is a very timely lesson now that work is just commencing on the EU telecoms package. One of my roles in that will be to press for the rest of the EU to be equally open and competitive, giving the UK access to their markets. Without the EU pressing for such reform, many countries simply would not consider introducing Functional Separation".

ENDS

Further information on the Broadband decision can be found on the Commission's website at: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/232&format=HTML&aged=0&language=EN&guiLanguage=en