Functional separation works for broadband: UK communications regulator

Stan Beer
Sunday, 06 July 2008 12:28

Opinion and Analysis

While Telstra promotes the ideas that telecoms regulation and functional separation of its wholeslale and retail divisions are anathema, the UK communications regulator begs to differ. In fact, in its latest report the UK Office of Communications (Ofcom) states that functional separation has been a resounding success - especially for broadband competition.

In a report titled Serving Consumers: Competition, Innovation And Investment Through The Next Phase, delivered at the Intellect Conference on July 3, Ofcom chief executive Ed Richards stated in no uncertain terms that regulatory intervention and in particular functional separation have been benefical for competition in the UK telecoms market.

"Today we have some of the most competitive communications markets in the world, and that is largely because we have put effective competition at the heart of our policy making," said Mr Richards.

"But where competition fails or is weak, we will continue to need regulatory intervention – to create the conditions for new competition, for innovation and for investment by other companies."

Mr Richards singled out the UK broadband market as an example of how regulatory intervention resulting in functional separation has benefited the local market.

"To see the merits of appropriate regulatory intervention, one only needs to consider the functional separation of BT and the consequential success of the UK broadband market, where today we have 99% coverage and typical headline speeds of 8mbps and where European authorities are debating the potential inclusion of functional separation into the new European Framework on the back of the UK’s success," said Mr Richards. CONTINUED