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Europe Urged To Follow Openreach Route By Splitting Telco Services And Networks

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The European Commission wants telecoms companies elsewhere in Europe to follow the UK’s lead by encouraging national market leaders to split their services and infrastructure divisions. In the UK, BT (NYSE: BT) in 2005 split off its network access business from its main consumer activities, naming the new subsidiary Openreach, charged with giving rival telco’s access to the former monopoly’s exchange lines – through local loop unbundling for broadband, for example.

European media and information society commissioner Vivianne Reding today said she would introduce her plans to the European Parliament and member-state regulators on November 13, but separation of businesses will be voluntary rather than enforced, Dow Jones said. The creation of Openreach has led to intense competition in the UK broadband market, as competitors gain access to BT’s “last-mile” lines to bring the internet to doors at ever-lower prices. European moves could herald similar effects elsewhere on the continent. Dow Jones said France Telecom (NYSE: FTE) believes the move will cause confusion over accountability amongst customers, however. Other plans include the creation of an EU-wide telecom regulatory authority.