This effectively removes regulatory barriers to investment in super-fast broadband, promoting increased flexibility in the way fibre networks are delivered and enabling telcos to make a fair return on investment. Ofcom has stated that the ruling was made in order to promote investment to support the widespread adoption of superfast broadband while delivering consumer benefits for both investment and competition. In addition, the announcement appears to be laying the foundations for a flexible wholesale model as opposed to retaining an environment in which competing operators install their own equipment alongside BT’s.
Viatel believes that at the present time the focus on promoting wholesale access was the right move. Steve Powell, connectivity manager at Viatel, said “Super-fast broadband has been long talked about in the UK and Ofcom’s announcement is a huge step forward in making this a reality. However, although Ofcom’s insistence on wholesale availability is absolutely the right thing to do, it also has to ensure it does not create a monopoly. The decision on BT being able to make a profit is sensible but without adequate regulation or competition what will that price be?”
Powell continues. “This announcement will not be well received everywhere. While it is good news for Viatel, our customers and resellers, validating our decision not to go with LLU, it is obviously not such good news for LLU suppliers. They might not find it cost effective to extend unbundling out to the cabinet and will therefore struggle to provide VDSL with their current infrastructure. Without fibre from the serving exchange to the home, current LLU investment is likely to become a technological cul-de-sac.
These concerns aside, the announcement marks an important stage for broadband in the UK and it will be interesting to see how things develop as we move forward from this point. BT Wholesale input should mean we can offer to integrate FTTC into our portfolio and through existing infrastructure out to resellers. It will also be interesting to see how this and any requirement for a 2Mbps Universal Service Obligation, as suggested by Lord Carter’s Interim Digital Britain report, marries up. The future of connectivity for the next 30 years is upon us and it is vital that we act wisely now to remain competitive in an ever shrinking world.”