TRADE AND INDUSTRY COMMITTEE
COMMITTEE OFFICE HOUSE OF COMMONS
7 MILLBANK LONDON SW1P 3JA
Telephone: 020 7219 5777/5779
PN 37 of Session 2004-05
PUBLICATION OF REPORT: OFCOM'S STRATEGIC REVIEW OF TELECOMMUNICATIONS
The Trade and Industry Committee today publishes its Report on its inquiry Ofcom's Strategic Review of Telecommunications (HC 407 - I).
During its inquiry, the Committee focussed on how Ofcom has addressed some of the issues the Committee raised last year in its Report on The UK Broadband Market (Second Report of Session 2003-04, HC 321-1).
The Committee concludes that in the absence of substantial investment in end-to-end networks or alternative access networks, Ofcom's pursuit of Local Loop Unbundling (LLU) is the best way of introducing a more varied broadband market. However, BT's decision to 'de-average' wholesale prices - to vary them from area to area - has created uncertainty which may jeopardise future LLU plans.
The Committee remains unconvinced by the case for forcing BT to separate and agree with Ofcom that pursuing genuine 'equality of access' is the best regulatory approach to take. Only if this proves unworkable should forcible separation be considered. It may be that implementing equality of access prompts BT to consider voluntary separation, though this is unlikely, in the medium term at least. BT's plans for its '21st Century Network' provides an opportunity for building equality of access into the network from the start.
The Committee welcomes BT's proposals for an Access Services Division and an Equality of Access Board. Whilst BT's competitors may complain that the proposals do not go far enough, the Committee thinks that they represent a constructive engagement with Ofcom's consultation. However, much depends on the detail if these proposals are to be successfully implemented. These details will need to be addressed in the final stage of Ofcom's review.
Martin O'Neill MP, the Chairman of the Committee, said "We are pleased by Ofcom's decision to conduct a root-and-branch review of the telecoms regulatory regime and by the constructive engagement by the industry, including BT. We reiterate our opinion that the case for forcing BT to structurally separate has not been made, and that Ofcom's pursuit of genuine equality of access is the best way forward. It may be that equality of access prompts BT to voluntarily separate; however, that is a matter for BT's management and shareholders".
Copies of this Report may be purchased from the Stationery Office (enquiries: 0870 600 5522) and the Report will be available on our website soon after publication at http://www.publications.parliament.uk/pa/cm/cmtrdind.htm.
For further information please call the Committee Office on 020 7219 5777/5779.
5 April 2005