EU relaxes rules on UK broadband regulation

Regions deemed to have enough competition will not be regulated

The European Union has endorsed Ofcom proposals to relax the regulation of wholesale broadband access in the UK.

Viviane Reding, EU Commissioner for Information Society and Media, confirmed that plans to regulate the sector are consistent with rules set out in the EU framework.

The EU found that the decision to tailor regulation to local competitive conditions through the identification of sub-national markets is justified.

The ruling follows a consultation document issued by Ofcom in November 2007 which set out proposals for effective regulation.

"In that document Ofcom recognised that competition in the supply of wholesale broadband access services has matured at different rates across the UK and has identified four distinct sub-national markets," said a statement from Ofcom.

"Ofcom proposes to tailor regulation in these sub-national markets according to the level of competition in each."

The decision allows Ofcom to deregulate an area of the UK that covers 65 per cent of UK premises, allowing the standards body to regulate only where it is necessary.

Matthew Howett, an analyst at Ovum, said that he "sympathised" with Reding's view that there may be inherent difficulties with sub-national markets.

"Particularly in reconciling the apparent conflict of making the market review process more effective by allowing regulators to concentrate on areas where structural competition problems still exist and streamlining it," he said.

Howett believes that adding more layers could increase the red tape that the EU is trying to reduce.

"This will be particularly acute for regulators which lack the resource and expertise that Ofcom has," he said.

"In addition, for those areas where regulation is removed, careful monitoring will be needed to see if competition develops as expected."

However, Howett said that the benefits of better-targeted regulation currently outweigh any concerns.