The great thing about unbundling was that it sets a sort of floor cost for provisioning a broadband line. Instead of just buying a wholesale offer from a wireline incumbent, an independent has options - it can calculate the real per-line cost of unbundling and then decide whether it was worth taking the regulated bit-stream product or going nuclear and unbundling instead.

Of course there are variables to be taken into consideration. As a general rule the unbundling option only really works for you once you have the right number of customers in a given exchange, so unbundling telcos might start out using a bitstream product from the incumbent until critical mass is reached and then revert to unbundling (you still have to pay for access equipment and backhaul, so scale is important).

This dynamic keeps the wireline operator honest. Make the bitstream product too expensive and you’ll cause too much unbundling and therefore lost revenue, too cheap and, well, you’ll just collect less revenue overall.

So even if it’s not being used so much, unbundling acts as price restrainer for what is effectively still a monopoly.

The problem is that unbundling, thus far, doesn’t work well with short run VDSL - the fibre to the node, copper to the home techfnology that BT is currently installing. It works even less well with fibre.

According to Senior Analyst, Broadband at IHS Technology, Fiona Vanier, the problem is intractable. “All sorts of technical solutions are proposed,” she says, “but the problem is that these are too expensive or too problematic (mutiple street furniture, for instance). It might be that technical solutions to enable unbundling are found eventually, but at present there’s nothing in sight.”

Vanier points out that at present competition in the UK market remains pretty robust, despite the fact that the just three players - BT Retail, Sky Broadband and Virgin Media - control almost 75 per cent of the market with 30 per cent, 22 per cent and 20 per cent shares of retail connections respectively. In other European markets, the ex-state-owned providers frequently control more than 40 per cent of the market.

“At any time there is usually a challenger trying to gain market share in the UK and that keeps prices keen - for instance EE has done a good job in broadband recently,” she says. But while the immediate future might look bright, the longer term is a worry.

BT, for instance, seems intent on grinding a premium out of super-fast broadband to pay for its foray into media, with its sports programming.

“Currently, customers wanting to upgrade from low speed packages can expect to pay 100% more for higher speed services,” says Vanier. “All of the major ISPs are now offering superfast broadband services at advertised speeds higher than 70Mbps - but customers have to pay a premium. A typical price increase is £20 per month from £20 per month for a 16 Mbps service to £40 per month for a 76 Mbps service.”

She says that the UK market risks losing its competitive status as next-gen broadband become more popular.

“With the move to fibre-based products, ISPs are likely to become more reliant on wholesaling lines from BT. Careful regulation of wholesale costs will be necessary to ensure that the current competitive market is retained and consumers’ bills don’t rise excessively.”