The relationship of VULA and LLU/SLU from a European regulatory policy perspective

Abstract

On 9 October 2014, the European Commission adopted its revised Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation. The new Recommendation redefines the boundaries of the broadband markets, no longer differentiating between physical and non-physical access and considering Virtual Unbundled Local Access as an alternative to physical Local Loop Unbundling and Sub-Loop Unbundling. A local loop is the final part of an access network that provides access into homes and businesses.1 Local Loop Unbundling (LLU) is the regulatory process of allowing multiple telecommunications operators the physical use of connections from the telephone exchange’s central office to the customer’s premises.2 A sub-loop is that portion of the local loop which runs from a street side cabinet to a home or premises.3 It therefore excludes that portion of the local loop between the exchange and street side cabinet.4 As a result, Sub-Loop Unbundling (SLU) is the regulatory process where only a part of the local loop is unbundled. With regards to Virtual Unbundled Local Access (VULA), it is in principle to be understood as an electronic means to provide virtual bitstream-type access which is supposed to offer functionalities similar to local physical access.5 In its first draft, the Commission even suggested that VULA could replace LLU and SLU. The relationship of VULA and LLU/SLU from a regulatory policy perspective, considering inter alia the deployment of Very-high-datarate-Digital-Subscriber-Line (VDSL) ‘vectoring’ and the ‘ladder of investments’, are discussed below.