The European Commission approved and warmly favoured the initiative. "I welcome the precedent set by Ofcom's proposal to define sub-national geographic markets," commented Information Society Commissioner Viviane Reding.
The complex procedure of dividing national markets in different local sub-markets is considered by many as a key step in overcoming the digital divide between urban and rural areas within countries.
According to the most recent figures, which the Commission will publish next March alongside a new proposal on the digital future of the EU, the average broadband coverage in EU member states varies from 94% in the cities to 72% in remote areas. "Greece, Slovakia, Latvia, Italy, Portugal, Lithuania and Germany feature an even larger gap between coverage in urban and rural areas," reads the document obtained by EurActiv.
Ofcom has split the UK into four markets for wholesale broadband, and in doing so has identified areas where the competition among operators is sufficiently developed not to require further regulation. In addition, in the regions where the regulator counted at least four wholesale providers and a retail market of over 10,000 premises, it decided to lift regulation. This will concern 64.4% of British households.
"The lifting of rules does not create a legislative vacuum because competition law is still applied. Therefore the consumer is not unprotected," explained Commissioner Reding's spokesperson, Martin Selmayr.
"Ofcom's discovery of effective competition in a substantial part of the UK broadband market shows that the more effective a national telecoms watchdog regulates, the faster the move to competition law can be, inbuilt in the EU's telecoms rules," added Commissioner Reding.
Ofcom's proposal is a consequence of the functional separation established in the UK telecoms sector between network and service providers, argued Selmayr. The Telecoms package review proposed by Commissioner Reding last November is trying to introduce functional separation across the EU.