Britain is to be the first EU state exempted from the bloc’s telecom market rules in areas with several networks, a reward for boosting competition by functional separation, a European Union source said on Tuesday. European Union rules require national telecoms markets to pass eight tests, such as making sure rivals can set up shop to challenge former monopolies properly. Britain proposed to EU Telecoms Commissioner Viviane Reding to divide the country into regions, with areas where at least three to four networks jostle to offer customers services such as broadband, exempt from the eight tests. “Agreement has been reached on this,” the EU source with knowledge of the measure said. The effects of the change will be to free up regulatory effort and allow companies to focus on observing general competitive principles, rather than specific regulations. The European Commission is expected to give telecoms regulator Ofcom the formal green light on Thursday. An Ofcom spokesman could not confirm there was agreement on the proposal it made to Brussels.