BT has responded to Ofcom’s Digital Communications Review, setting out how regulation can help Britain secure its digital future and maintain its position as the leading digital economy in the G20 Boston Consulting Group. UK eGDP 2010-2018: Summary of forecasts. May 2015.
Central to BT’s vision is further large scale investment – building on the £20bn it has invested in networks over the last decade – as well as an enhanced focus on service to meet massively increasing customer demand for communications.
BT says it is vital for the digital health of the UK that Openreach remains part of the wider BT Group as this will enable it to continue to benefit from BT’s capital as well as the c.£500m a year BT spends on its world class research and development. BT is keen that Openreach continues to provide regulated services to all companies on an equal basis as this model has served the UK exceptionally well over the past decade, and the company believes others have failed to make a convincing and evidence based case for change.
In its submission, BT cites independent data that shows the UK currently leads the EU ‘big five’ for superfast broadband coverage, take up and competition. Prices are also among the lowest in Europe Ofcom, European Broadband Scorecard Q1 2015.
The company also sets out how the average UK broadband speed has risen from just 1Mbps in 2005 to more than 22Mbps currently, and how around 24 million households and businesses are using the service across all networks, around three times the eight million who used broadband a decade ago.
Demand is growing with customers increasingly reliant on the internet and demanding higher levels of service. BT outlined plans on 22 September to meet this surge in demand now and in the future, and today’s submission sets out the regulatory changes that would help UK consumers and businesses enjoy the best possible outcomes. These include:
•Long term commitments from Ofcom to provide certainty and clarity
•Regulatory policies to encourage large scale investment
•Support for consolidation when it benefits competition and brings investment
•A better regulatory balance between service quality and price
•A level playing field particularly with regard to Pay TV
•Simplification of current regulations with duplication removed where possible
As well as setting out how the broadband market has flourished – in part thanks to the creation of Openreach – BT’s submission highlights the continuing problems in the Pay TV market, where Sky’s dominance continues to be unchecked and where new rules are needed to make switching far easier for customers.
The competition issues in this market have long been recognised but regulation has been ‘lop sided’ to date with Sky having easy and highly regulated access to the Openreach network – which has enabled it to secure millions of UK broadband customers – whereas BT has struggled to obtain similar wholesale deals with Sky when it comes to content.
BT Group chief executive Gavin Patterson said, “We are now at a critical point in the development of the UK as a digital nation. Broadband has become central to our economic and social life today and the industry must therefore invest to meet this growth in customer expectations and demand.
“BT is driving the transformation of Britain’s digital infrastructure but we need the right regulatory regime that supports fair competition for all and large scale investment. With this in place, there is no doubt that we can meet the challenges of the next decade, fulfilling the needs of consumers and businesses, driving the growth of the UK economy and supporting social progress for the whole country.
“Ofcom has the opportunity to level the playing field by tackling Sky’s dominance of Pay TV. That dominance has led to poor outcomes for UK consumers and it is about time that converged regulation was introduced to deal with a converged market. The current lop sided approach isn’t serving customers well.”
Today’s submission reinforces BT’s recent commitments to a new wave of investment Subject to a supportive regulatory environment
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