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Peter Curwen and Jason Whalley 11.1 INTRODUCTION Since 2004 or so there has been considerable interest in the implementation of functional separation within fixed telecommunications markets. In these markets, which are largely but not exclusively to be found within the European Union, functional separation is seen as a way to resolve the tensions that exist between incumbent operators and those other service providers that require access to incumbents’ networks to deliver their own services. At the forefront of the implementation of functional separation is the UK. In late 2005, Ofcom and British Telecom (BT) agreed on a series of undertakings that culminated in the creation of a new company, Openreach, to run BT’s local access network. Accompanying the establishment of Openreach was the imposition of key performance indicators and penalties for non-achievement. As Openreach is clearly an important landmark in the development of the UK telecommunications market, this chapter will focus on the implementation of the undertakings to date. With this in mind, the remainder of this chapter is divided into five sections. A brief overview of the different types of separation possible within the telecommunications industry is provided in section 11.2. Background information regarding the adoption of functional separation is detailed in section 11.3, while section 11.4 focuses on the implementation of the undertakings. The adoption of functional separation in the UK is appraised in section 11.5, and conclusions drawn in section 11.6. 11.2 LITERATURE Any assessment of functional separation within the UK raises two questions: What is functional...