The U.K. Office of Communications set out how...
The U.K. Office of Communications set out how it will deal with competition problems in the provision of leased lines. Such lines offer dedicated symmetric transmission capacity between fixed locations, and their overall value exceeds £2 billion ($3 billion) per…
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year, it said in a statement Thursday (http://xrl.us/borjzt). They're important for business communications and support a range of applications in the public and private sector. They also play a significant role in delivering fixed and mobile broadband services to consumers because communications providers (CPs) use them extensively in their networks, Ofcom said. BT is still by far the largest wholesale supplier of leased lines, and most CPs rely on its network to provide services to their customers, it said. The demand for leased-lines bandwidth is increasing, driven by rises in the penetration and speed of business and consumer data services, it said. Cloud computing adoption, the growing consumption of video content, and the rapid growth of e-commerce and Internet applications have all added to businesses’ bandwidth demands. Simultaneously, providers of consumer broadband services need steadily increasing bandwidth to support the growth in traffic from their end-users, it said. This trend toward demand for leased-lines capacity is likely to continue as companies seek more bandwidth and super-fast and 4G services rollout, it said. New technologies are driving down the unit costs of leased-lines bandwidth, and the number of services that use legacy time-division duplex technologies is falling, although they still account for most installed leased lines, it said. Ethernet transmission equipment is now preferred in most new installations because it’s less expensive and supports higher bandwidth. The trend toward lower unit costs is evident in the growing adoption of wavelength-division multiplex (WDM) technology, which can multiply by several times the bandwidth transmissible in optical fiber, it said. WDM lets CPs aggregate traffic from different services and use fiber efficiently in their core networks as bandwidth demand rises, it said. Ofcom reviewed the retail and wholesale markets for leased lines, and found that BT has significant market power in retail and wholesale leased-line markets except for in Hull, where KCOM has significant market power. It considered, but rejected, making BT provide access to its ducts, poles or dark fiber, opting instead to set requirements such as providing network access on reasonable request, and not discriminating unduly against competitors. Some of the same conditions were imposed on KCOM. Ofcom also imposed new wholesale leased-line charge controls on BT services.