Broadband de-regulation: what does it mean?

John-Paul Kamath

Ofcom competition areas
Ofcom has
split the national market for broadband into four main areas and defined them according to the level of competition that exists between broadband providers. These are:

* Hull - those areas covered by exchanges where KCOM is the only operator. This market covers 0.7% of UK premises.

* Market 1 - those areas covered by exchanges where BT is the only wholesale operator. This market covers 19.2% of UK premises.

* Market 2 - those areas covered by exchanges where there are two or three wholesale operators. This market covers 15.7% of UK premises.

* Market 3 - those areas covered by exchanges where there are four or more wholesale operators. This market covers 64.4% of UK premises.

Ofcom has found that KCOM's position in the Hull market gives it a dominant market position. Ofcom reached a similar conclusion in relation to BT's position in Market 1 and Market 2. Accordingly Ofcom will continue to protect consumers by keeping existing rules that are designed to promote retail competition in these markets.

These rules require KCOM and BT to open up their networks to other providers on a fair and equivalent basis and provide a wholesale product on which retail services can be built.

Ofcom believes the supply of wholesale broadband services in Market 3 is increasingly competitive and that no organisation enjoys significant market power there. Consumers have sufficient choice and are therefore protected by competition.

For this reason Ofcom proposes to remove regulation imposed on BT in this market and received approval from the EU.

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