Network terminating equipment is not
a terminal. A terminal is a piece of equipment with which a person has some direct interaction. This could include a card reader such as you use in shops, or a touch-screen in an estate agent's window, Oyster card and bus pass readers. It does not include
networking equipment such as modems and routers.
I think it may be your conflating the word "terminal" and the phrase "network termination/terminal equipment" that is the problem. They are not the same thing. I suggest before you argue against that you go and find the specific paragraphs in the EU regulations you refer to and come back with the full detailed reference path.
Oxford English Dictionary terminal.
Section "Adjective" where a following noun is required exactly as you say. Several examples of usage of that kind.
Section "Noun", definition 3. Definition exactly as I gave you previously and above in this post.
In respect of the Openreach network they normally define their network termination equipment as exactly that. That's why the modern master socket is called an NTE.
For short periods after the introduction of ADSL and later FTTC, as I've already said, they did define their network termination point as the modem they supplied. This being completely so as to guarantee that until the system was well established in real world use and any problems sorted out that no problems on the network itself were created by equipment they had not exhaustively tested. There was nothing illegal about that, and certainly nothing to do with internet neutrality.
You can now connect any modem or modem/router you wish. But if it wrecks the network you will get disconnected. No EU regulation forbids a network infrastructure provider or a Communications provider from stopping a non-compliant user having access.
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