Ofcom’s proposal on EU telecom rules to be approved

The European Commission is believed to be planning to approve a proposal by Ofcom that parts of Britain should be expected from EU telecom market rules.

Under the rules, national telecoms markets have to pass eight tests, including making sure that rivals can establish their business and challenge former monopolies.

Ofcom proposed that Britain should be divided into regions, and suggested that any region with three or four networks competing to offer services should be exempt from the eight tests.

This will allow the companies to be regulated by general competitive principles, reducing the need for specific regulations.

Ofcom’s proposal set a precedent and is likely to be welcomed by Austria, Spain and Italy, who are also interested in this geographical segmentation approach.

Those regions of the UK which are exempt from the EU telecoms tests will still be subject to the EU’s general competition rules which ban price fixing, cartels and abuse of dominant position.

The Commission approved Ofcom’s proposal as a reward for introducing functional separation to boost competition.

The Commission wants other countries to follow the example of former monopoly, BT, which separated its customer and network arms into different business units.

This allowed rivals companies to use the BT network to offer competing services. Once established, these companies were then able to build their own networks.