Access Structural Separation And Regulation Gain Traction

Despite the success of the liberalization of communications markets that began in the early 1980s, near-monopolies still exist in many countries at the access layer (from the street cabinet to the customer's premises). In 2005 in the UK, the regulator (Ofcom), incumbent (BT), and the wider industry agreed through the framework of the Telecoms Strategic Review (TSR) to address this by creating a separate access division inside BT called Openreach. This model has been successful in simulating local access competition (Openreach has now provided 4.3 million unbundled local loop lines to competitors) and attracted admiration from regulators and policy makers across the globe. The UK model has attracted a lot of attention from National Regulatory Authorities (NRAs) across the world. As a consequence, regulation is back on the agenda in many countries. Telco strategists need to understand the latest developments and formulate an appropriate response; they must also adopt a new mindset and treat this conversation as an opportunity to negotiate a positive outcome — not a confrontation. If they fail to do so, they may be forced to dance to the regulator's tune.