BT's (NYSE: BT) ambitious Fiber to the X rollout--one that the incumbent carrier says will now reach 66 million homes by 2012--will come with the regulatory price of providing competitors access to its fiber lines.
Although BT got a near-term regulatory break from U.K. regulator Ofcom that will allow the incumbent provider to provide only "virtual unbundling" of its last mile fiber network, the European Commission mandates that BT will have to eventually provide physical access to its last mile fiber lines similar to the way it currently provides competitors access to its existing copper network. Through the current unbundling rules, U.K.-based competitors as TalkTalk can get access to BT's copper lines to deliver broadband service to consumers and businesses.
While Neelie Kroes, the European telecom commissioner, supported the initial virtual structure, she pointed out that "virtual unbundling" is only a temporary measure.
"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 in a Financial Times article," adding that "this interim solution is not a long-term alternative to physical fibre unbundling, which should be imposed as soon as possible."
Under Ofcom's current rules, BT will be able to provide competitors virtual access to its fiber lines over the next four years, but the regulator could conduct a review to accelerate the introduction of physical unbundling.
For more:
- Financial Times has this article (sub. req.)
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