British telecoms regulator Ofcom is proposing to deregulate nearly 65 percent of the market where it believes competition has developed strongly enough for it to step back. Under the proposal published Thursday,  it would, however, continue to protect consumers in the remaining 35 percent, where BT (NYSE: BT) and KCOM either dominate the market, or consumers don’t have a sufficient number of broadband providers from which to choose.

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Overall, Ofcom found the retail broadband market “performing well.” Broadband is available to 99.6 percent of UK households and more than 80 percent can choose between two or more providers. In the areas Ofcom plans to deregulate, consumers have a choice of at least 4 wholesale providers, and often up to 8. In those areas where either KCOM or BT is the main provider, the two firms must open up their networks to other providers “on a fair and equivalent basis” and provide a wholesale product on which retail services can be built. The consultation on Ofcom’s proposal closes on Feb. 7, 2008.  Release.