Last week the UK’s telecoms regulator Ofcom set out how regulation could evolve to support competition and further investment from new alternative networks as well as Openreach and Virgin Media.
Ofcom said their goal is to encourage and facilitate a significant, long-term investment in full-fibre broadband to allow customers a choice of networks, while allowing companies involved to make a fair return.
Part of the process is a consultation on their set of proposals, including market definition, market power and remedies. Ofcom said they intend to consult on their full set of proposals in December.
People and businesses need reliable communications networks more than ever before. Full-fibre networks, connected directly to homes and offices, provide faster and more reliable broadband and will enable the next generation of mobile services (5G).
We, alongside the government, have ambitions to get full-fibre broadband nationwide over the coming years – in rural communities as much as towns and cities. Ofcom’s goal is to encourage and enable significant, long-term investment in full-fibre broadband to give customers a choice of networks where feasible, while allowing companies who build these networks to make a fair return.- Promoting Competition and Investment in Full-Fibre Networks Report: Ofcom
To enable their ambition, Ofcom’s strategy is to promote competitive networks. In particular, using Openreach’s ducts and poles to reduce costs of network building. Looking to encourage investment through the way they set regulated prices in rural areas where network competition will be low. And finally, supporting public intervention to deliver fibre in the hardest to reach areas of the UK.
Current commitments by broadband companies could see six million premises with full-fibre access by 2020. Alongside this the government wants 15 million premises to be connected by 2025.
Ofcom claims the proposals represents, ‘a significant departure from our historical approach to economic regulation.’ In particular, the commitment to allow companies to make a fair return on the new fibre networks.
This they will do through setting regulated prices only for entry-level superfast services and allowing all operators, including Openreach the freedom to set prices for higher speeds and higher quality fibre-based services.
Ofcom has committed to making sure rural areas don’t fall behind the rest of the UK particularly those areas where there is no prospect for competing networks and therefore a weaker case for investment. This, they will do by allowing Openreach to spread the costs of investment across a wider group of consumers.
To make sure rural areas receive full access to 5G, Ofcom proposes a cost-based access to Openreach’s ‘dark fibre.’
Dark fibre is where Openreach gives competitors physical access to its fibre cables, allowing them to take direct control of the connection. The new proposals will mean a continued and effective supply of mobile backhaul capacity and business connections.
These proposals and others Ofcom is committed to means, they claim, a transformation of the broadband service experience for people and business, through more competition, more investment and enhanced mobile services, while, they say, at the same time protecting them from the risk of excessively high prices.
Image: The Opte Project