EU accepts BT/Ofcom virtual unbundling plans for fibre broadband
The European Commission have announced that they have accepted plans submitted by Ofcom to require BT to provide virtual unbundled access to fibre connections rather than implementing full LLU for fibre. The proposal was put forward to the EU on the 23rd March when Ofcom opened their review of Wholesale Line Access (WLA) and Wholesale Broadband Access (WBA) to consultation (which ended yesterday).
VULA or Virtual Unbundled Local Access provides a virtual link to connect an end user back to a broadband provider in the exchange over BT's next generation fibre products which offer fibre-to-the-cabinet (FTTC) and fibre-to-the-premises services (FTTP). The end user is offered an Ethernet connection in their home on equipment install by BT. To help give providers the ability to differentiate their products and innovate in a similar way to LLU, they will be given some control over the end user equipment. This should hopefully allow the use of the platform to deploy TV services similar to those offered by Virgin or BT Vision.
The main reason VULA is needed is to help support the deployment of FTTC and open it up to the market. Sub-loop unbundling does exist which allows providers to take over the copper pair from the cabinet to the end users premises, but this is currently rarely used, largely due to costs. The introduction of duct sharing may however make this a more viable option although local planning authorities may object to families of green boxes appearing on street corners.
The Commission did point out that it believes prices should be based on cost (unlike Ofcom's proposal that BT can set prices based on demand and supply costs of NGA services). They are also keen to point out that Ofcom should mandate full fibre LLU as soon as it is technically and economically feasible and that VULA should be deemed a transitory product until it can be replaced. Ofcom stated in the consultation summary that it expects the product to exist for at least four years.