Ofcom has identified four distinct UK broadband markets, which will allow it to remove regulation in areas where competition is regarded as sufficiently strong.
The move is a first for an EU regulator and is in line with the European Commission's goal to create a single European market for digital services.
Viviane Reding, EU Commissioner for Information Society and Media, said, 'I welcome the precedent set by Ofcom's proposal to define sub-national geographic markets.'
The approach is intended to help to ensure competition in broadband service provision and is seen as key in helping to bridge the gap between access in urban and rural areas.
EU-wide access to high speed internet services is regarded as essential if digital distribution of film is to become a reality in Europe.
A recent report by Screen International for Cine-Regio highlighted the discrepancy in broadband provision across Europe, and in particular between cities and rural areas. The report noted that this was one of the main obstacles to the uptake of new digital services such as Video on Demand.
Currently, rollout of high-speed services across the EU is extremely fragmented. There is a 25.6% difference between the leading EU country and the lowest, with 10% of the EU having no broadband access at all.
The speed of broadband available is also an issue with transfer rates in cities running at twice those available in more rural areas.
Ofcom's approach has implications for other telecoms regulators across the EU.
As Commissioner Reding points out, '[This allows the Commission] to provide clear guidance and policy principles for all national regulators in this important area. This should now be a solid basis for a coherent European regulatory approach to regional markets and give the required legal certainty to the market.'
Ofcom welcomed the European Commission's support. A spokesperson commented, 'As this approach is unprecedented, we wanted to ensure that the EU was happy with it. EC approval gives us the green light to proceed to the next step of our proposal.'
A final statement is expected from Ofcom in the Spring, following completion of the current consultation process.