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LLU failing in Europe – Gartner

Broadband for all still way off

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Industry analysts have called on the European Union (EU) to re-think its strategy for unbundling the local loop (LLU) calling the current policy a "regulatory nightmare".

Gartner Dataquest said that European governments are today putting pressure on telecom incumbents to open the last mile in a bid to increase competition.

But Jean-Claude Delcroix, Research Director of the European Networking and Communications group at Gartner, claims this approach has made it difficult for new companies to enter the market and compete.

The result is that existing telecom operators, such as BT, continue to dominate both the infrastructure and the service market in most countries.

If the European Commission continues with this approach, Gartner believes that the regulatory framework needs to improve in order to create a more level playing field for rival operators.

Said Delcroix: "Governments need to determine whether they want to encourage unlimited competition or sustainable competition in favour of users.

"Governments' regulatory regimes should anticipate a sustainable telecoms infrastructure and ensure regulation in which companies in the service sector can compete effectively offering end-customers reliable continuity of service as well as new services," he said.

Delcroix's comments follow the publication of figures from Gartner which show that only one in a hundred homes in Western Europe has ADSL.

Gartner warned that current delays in rolling out broadband would hamper the EU's chance to compete internationally in an increasingly information intensive society.

Indeed, Delcroix favours an even more radical approach to ensure that Europe doesn't miss out on broadband. Like many others, he believes the industry needs to consider a more profound split between infrastructure and service providers.

This would leave the infrastructure sector with a few companies working in a regulated competitive environment, and a service sector that is open to many operators, he argued.

Last month an EU report found that LLU in Europe was "very disappointing" and that not enough was being done to open up local networks to competition.

The EU threatened legal action against those member states that have failed to progress this new wave of telecoms liberalisation.

Liikanen also said that broadband would be top of the list of priorities for the EC next year. ®

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