| With the telecommunications market developing rapidly, Ofcom's decision to conduct a 'root-and-branch' Strategic Review of the regulatory regime is timely. In looking at Ofcom's Strategic Review, we have focussed on how it relates to the conclusions of our Report on the UK Broadband Market (Second Report of Session 2003-04, HC 321-I).
We support Ofcom's decision to focus regulation on 'enduring economic bottlenecks' and agree that the local loop constitutes such a bottleneck. Successful local loop unbundling can encourage a more dynamic and varied wholesale broadband market. However we are concerned that the uncertainty around the price of existing wholesale products has the potential to undermine the growth of local loop unbundling.
We agree that Ofcom's proposals on promoting equality of access are the correct strategy for addressing BT's dominant market position. Attempts to force BT to separate should remain very much a last resort. We welcome BT's constructive response to Ofcom's proposals, including its plans for a separate Access Services Division. However, we acknowledge that much still depends on the detail that remains to be established in the final stage of the Review process.
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