Ofcom rejigs UK rules to encourage full fibre deployment

© Flickr/CC-licence/Barta IV

© Flickr/CC-licence/Barta IV

  • Greater access to Openreach’s poles and ducts promised
  • Business and residential market regulation to be merged
  • New geography-based approach to regulation

Ofcom has essentially followed up on the UK government’s broadband policy outline, announced yesterday, (see - This time? UK government talks the talk on fibre - all eyes on the walk) by announcing a package of proposed measures to support long-term investment in full-fibre networks in the UK.

Ofcom points out that a number of major companies including Openreach, Virgin Media, Vodafone, CityFibre and TalkTalk have committed to laying full-fibre broadband networks. It proposes that it help speed them on their way by clearing away oft-criticised thickets of obstructive regulation and other bumps and lumps on  the competitive playing field.

It’s plans include:

Regulating business and residential markets together. Companies investing in full fibre are increasingly seeking to offer a range of services over a common underlying network, serving both consumers and businesses. So Ofcom will now consider these markets together

Plans for unrestricted access to Openreach’s ducts and poles. Openreach, which owns and maintains the UK’s main broadband network, is already required to allow competing providers to use its telegraph poles and underground ducts to lay their own fibre cables. It’s a measure, which could cut the upfront cost of building full-fibre networks by around half and is currently restricted to companies offering mainly residential and small-business services.

However, Ofcom will consult on plans to extend access to Openreach’s ducts and poles to companies offering high-speed lines for large businesses, as well as networks carrying data for mobile operators – giving companies extra flexibility and more opportunities to make a return on their investments, it says.

At present there are different regulatory approaches in different parts of the UK, so Ofcom intends to take a flexible approach to regulation, depending on how many different competing fibre companies are present in a particular geographic area. This approach can support widespread availability of full-fibre broadband across the UK, even in the most remote areas. Where competing networks emerge, there will be scope for Ofcom to deregulate.

It will extend the duration of regulation from three to five years or more. To help provide more longer-term certainty to investors, we will extend the period of our telecoms market reviews from three years to at least five.

These plans follow the direction set by Ofcom in its 2016 Strategic Review of Digital Communications, which focused on boosting investment in full fibre. Today’s proposals represent the next step on that path, it says.

Fair’s fair

Ofcom says it intends to continue to apply the ‘fair bet’ principle for Openreach’s investments in full fibre, which recognises that companies need to make a fair return on risky, long-term investments. This is in-line with the approach Ofcom has taken with previous significant network investments, such as the roll-out of superfast broadband. So access to Openreach’s ducts and poles will be consulted on in the autumn with the aim of having any new measures in place from the start of 2020.

There’s to be a new overall approach to regulation. It plans to consult on how geographic areas should be defined as either competitive, potentially competitive or non-competitive and by 2021 it plans to have regulation in place, covering wholesale access to broadband networks, that varies by geographic area to replace its Business Connectivity Market and Wholesale Local Access Review Reviews.

Also in response to the new government fibre policy, Openreach has announced a new, supplementary wholesale discount structure for fibre broadband in return for volume commitments.

It’s offering long-term discounts which go beyond Ofcom’s pricing controls on its superfast broadband products and these prices will be available to all of Openreach’s Communication Provider (CP) customers from 21 August. The discounts are available to any business – including small CPs - that grows its Fibre-to-the-Cabinet (FTTC) and Fibre-to-the-Premises (FTTP) customer base on Openreach’s superfast or ultrafast network by an agreed proportion over a three or five year period.  

BT believes that the new pricing structure will allow CPs to encourage more of their customers onto better services and ultimately to move the vast majority of Britain’s homes and businesses onto superfast and ultrafast platforms.

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