Planning potential
Ofcom has hatched a plan to promote competition and investment in next generation broadband in the UK.
While there has been progress in rolling out the new infrastructure needed for fibre broadband, the watchdog has admitted ‘there is a long way to go' before delivering next generation services across the UK. It believes with the right strategy, super-fast broadband can be delivered in both urban and rural areas.
Ofcom has decided to let BT's competitors have access to fibre lines laid by the UK's largest ISP. It has told BT it will also have to unbundle its underground ducts and telegraph poles too to speed up the roll of next gen broadband, although BT will be able to set its own prices for giving its rivals access.
The watchdog said letting BT set its own prices will promote investment by letting them make ‘a fair rate of return reflecting commercial risk.' The prices will be constrained by the market and will be subject to rules to stop anti-competitive pricing.
By opening up BT's underground ducts and telegraph polls, competitors will be able to roll out next generation services to areas where BT doesn't fancy deploying its fibre network, or beat the ISP to the job.
As part of the new rules, BT must share information about available capacity and the quality of existing infrastructure. BT will also continue to provide local loop unbundled services (LLU) to competitors.
Ofcom said the measures build upon competition in the UK's current generation of broadband services which reached a significant milestone last month when the number of unbundled lines passed the 7 million mark, delivering more choice and competition for customers.
Ofcom said it has made the decision to shake up the current rules to let ISPs offer competing services in areas where BT has invested in fibre.
"Elsewhere, access to BT's ducts and poles should encourage investment by other providers, enabling the provision of super-fast services and increasing competition," it added.
It said its decisions match the government's plan to encourage fast broadband roll-out, especially in remote areas, perhaps in combination with EU funding. BT's plan to roll out next generation broadband to rural Cornwall has received EU backing, for example.
However, it is not known how the rules will be effective in easing some peoples' concerns that an abandoned Tory tax pledge could lead to BT having a monopoly on broadband.
Although Ofcom's changes look like a positive first step, some commentators believe fibre broadband is still prohibitively expensive for BT's rivals as the Valuation Office Agency (VOA) currently favours BT. Its competitors are reportedly charged £2,000/km of fibre optic cable plus £20 for every house attached to it outside of London, according to VOA figures. By contrast, BT is reportedly charged just £15 a km.
"The development of the UK's super-fast broadband future is well underway with the roll-out of services in large parts of the country. Today Ofcom has finalised a clear regulatory framework to promote investment, competition and innovation to enable as many consumers as possible to benefit from these exciting new services," said Ofcom's CEO, Ed Richards.
