Ofcom to BT: Equivalence or else

After a long period of deliberation Ofcom, the UK regulator, has come to its conclusion on the Strategic Review of Telecommunications Phase 2 (SRT 2 to those in the know). It won’t be forcing the split of BT Retail and BT Wholesale.

For a very long time, most companies in the UK telecoms market have bemoaned BT Retail getting a better deal from BT Wholesale (they own the network) than they were able to achieve. In the competitor’s eyes, the market hasn’t been balanced. Many felt that BT has been expert in ‘playing’ the regulator, especially Ofcom’s previous rendition, OfTel – only making changes just before they were forced.

In SRT 2 Ofcom investigated three options, Full deregulation; Enterprise Act investigation; BT to deliver real equality of access. They’ve come down on the side of the latter, in their words

“Ofcom calls on BT to provide prompt and clear proposals which will achieve these behavioural changes and bring about the level of confidence required.”

and if equality isn’t achieved, they threaten to use the second; an investigation into the market under the Enterprise Act 2002, with the potential for a subsequent referral to the Competition Commission.

In theory, when equal access to the network is given, the need for Local Loop Unbundling (LLU) to provide competing broadband services will be reduced.

When we spoke to Video Networks, the company behind the London-based IP VOD-services, they said the news today would “not impact their LLU plans”. EasyNet, a significant unbundler, didn’t get back to us before we went to press.

The SRT 2 is now open for public consultation until 3 February 2005.

It would appear that the threats from Christopher Bland, Chair of BT, in the Telegraph at the weekend that “No BT would equal No Broadband” were unnecessary.
Update: OfcomWatch comment