BT Told To Share Fibre Network

BT has been told that it must provide rival Internet Service Providers (ISPs) with the same degree of access to its new fibre optic network that it currently provides to its existing copper-based infrastructure.

So said the European Commission, which backed Ofcom’s proposals that rival ISPs should be able to access BT’s fibre network through the “physical unbundling” of the nation’s communication lines. This is a familiar process which is currently used for the copper network.

Known as Local Loop Unbundling (LLU), it essentially allows for a rival ISP to go into a BT telephone exchange and install their own equipment in order to offer that particular area their unique (and often cheaper) broadband and telephone service. The ISP effectively takes control of the ‘last mile’ connection to its customer’s home.

Virtual Unbundling

However, in what is a major departure from the existing arrangement, under the new rules BT will be allowed to offer rival ISPs access to the new fibre network through a Virtual Unbundled Local Access (VULA), or “virtual unbundling” in other words.

With the VULA approach, BT instead will install the equipment in the telephone exchange, and will be able to set a fee for rival ISPs to gain control of the customer’s line. This is because there will not be a cap on pricing when it comes to VULA – a move that is sure to concern rival ISPs.

The Commission said that price plans for VULA should be “cost-oriented,” so prices can be adjusted to take into account investment risk.

BT Regains Control

This move to allow BT to offer “virtual unbundling” will hand back to BT an element of control of its next generation network compared to the last decade. It will also allow BT greater control over how competitors access the new fibre optic network.

However, the European Commission has warned that the VULA move is at best an interim solution, until full fibre unbundling can be introduced in the future, as soon as it is technically and economically feasible for rival ISPs to do so.