* Proposes allowing BT’s rivals access to business lines
* BT says move will undermine investment
* Rivals say will increase competition, innovation (Adds BT, TalkTalk comments, shares)
By Sarah Young and Paul Sandle
LONDON, May 15 (Reuters) - Britain’s telecoms regulator Ofcom said BT’s fibre network should be opened to other operators to improve competition in high-speed data links for large businesses and mobile and broadband companies.
Ofcom’s proposals concern the 2 billion pound ($3.2 billion) market for dedicated leased lines that are used by companies as well as universities, schools and other public bodies to move around large amounts of electronic information.
“To ensure that businesses have effective choice, and to encourage competition and innovation, Ofcom is proposing a new requirement on BT -- the largest supplier in the market, upon whose network many competitors’ services rely -- to supply ‘dark fibre’ in areas outside central London,” Ofcom said on Friday.
Dark fibre refers to connections that are not live until an operator connects its equipment to them.
Broadband companies TalkTalk, Sky, business telecoms providers COLT and GTC, and mobile operators Vodafone, 3 and EE , said last year they wanted business lines opened up.
BT’s network company Openreach provides access to its fibre on a wholesale basis. Ofcom said its new proposals would enable competitors to put their own equipment at the end of each dedicated fibre line, a change that would drive innovation.
BT said it already provided a level playing field that allowed hundreds of companies, large and small, to compete.
“Mandating dark fibre risks favouring a few companies that have the greatest capability to deploy it, to the disadvantage of all other firms,” a spokesman said.
“It will undermine investment -- as a number of service providers have warned -- and it would also increase costs, divert resources and add more complexity just when we’re beginning to make progress on improving service,” he said.
TalkTalk, however, said BT had been able to get away with delivering poor service to businesses at inflated prices.
“These recommendations will help drive competition into the commercial market and improve the service they receive,” the company said, adding it was vital prices were set at the right levels for competitors to access the network.
Shares in BT fell 1 percent in early trade, before recovering to trade flat at 465 pence by 0936 GMT.
The proposals, which do not cover consumer fibre connections, will be subject to consultation, with a final decision published next year.
$1 = 0.6341 pounds Editing by Mark Potter