In this first of its kind ruling, reported by the Financial Times, the EC is requiring BT to offer physical unbundling of its fibre-optic lines to its rivals, just as it currently does for its old copper lines. Regulations have been in place for years regarding the open use of copper lines, but many telecoms companies were hoping those rules would not apply to the roll-out of faster fibre lines.
“Physical unbundling should be imposed as soon as possible,” said Neelie Kroes, European Telecoms Commissioner.
BT will get a moment to breathe, however, as the EC has agreed to allow BT to use a more limited form of virtual unbundling for the next four years, a suggestion that originally came from UK regulator Ofcom.
“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,” Kroes said.
The virtual unbundling known as VULA will only allow competitors local access to the lines going to people’s homes, leaving BT still in charge of the exchange. This will allow greater competition and more high-speed broadband access for people throughout the UK, while keeping BT in control of pricing, which is an issue of contention between Ofcom and the EC.
The EC believes that €300 billion (roughly £250 billion) needs to be spent on rolling out fibre-optic broadband lines across Europe as part of a new digital agenda. BT is spending £2.5 billion on its own fibre-optic infrastructure, which will serve over two thirds of UK homes by 2015.