Over the past two years, Ofcom says UK consumers have started to enjoy the benefits of the next generation of broadband, with a number of companies starting to invest in infrastructure. But there is a long way to go to deliver the networks of the future that the UK needs.
Ofcom believes that competition and investment in super-fast broadband can be delivered in both urban and rural areas. Their statement is designed to provide a further spur to investment by confirming the regulatory framework for these services. It covers two principal interventions:
1. Providing competing services over BT’s fibre lines: Ofcom’s decisions will allow competitors to have access to a dedicated virtual link over new fibre lines laid by BT (known as virtual unbundling). This will give other companies control of the lines to provide super-fast broadband services to their own customers.
BT will be able to set prices for these new wholesale products which should promote investment by enabling them to make a fair rate of return reflecting commercial risk. These prices, say Ofcom, will be constrained by the highly competitive wider broadband market and will be subject to rules to prevent anti-competitive pricing.
BT has already started offering its “Generic Ethernet Access” product to wholesale customers and will develop it further in line with the requirements Ofcom has confirmed today.
2. Giving access to underground ducts and telegraph poles: Ofcom has concluded that BT should be required to offer access to its underground ducts and to its telegraph poles. This would allow its competitors to roll-out super-fast broadband to areas where BT does not plan to deploy its fibre network and to target specific areas earlier than BT’s roll-out. The economic case for duct and pole access should improve as the market for super-fast broadband develops.
BT is required to share detailed information with other communications providers about, for example, the available capacity and quality of ducts and poles. Ofcom has confirmed that it will require BT to make available a draft reference offer describing its duct and pole product by mid January 2011.
These measures, say Ofcom, 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. This has enabled rival communications providers such as Sky and TalkTalk to offer services over BT’s copper telephone network, delivering choice and competition for UK consumers.
Ofcom will continue to require BT to provide local loop unbundled services (LLU) to competitors, building on this success to date.
Ofcom says their decisions are designed to benefit all UK consumers by recognising that different areas require different solutions. In areas where BT invests in fibre, the remedies will enable other providers to offer competing services, based on BT’s facilities.
Elsewhere, access to BT’s ducts and poles should encourage investment by other providers, enabling the provision of super-fast services and increasing competition.
The decisions are consistent with the Government’s potential role in encouraging super-fast broadband roll-out. For example, duct and pole access could extend the reach of services to more remote areas, potentially in combination with public funding at a UK or EU level. Duct and pole access could also complement Government measures to encourage fibre roll-out by sharing telecoms and other infrastructure.
Ofcom’s Chief Executive, Ed Richards said: “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.”
The statement can be found at: http://stakeholders.ofcom.org.uk/consultations/wla/statement