UK regulator Ofcom has published a consultation on major new proposals to encourage investment in fibre broadband infrastructure. The consultation closes on 01 April, with Ofcom aiming to publish its decisions in early-2021 before the current rules expire in April 2021.
Ofcom said it was proposing new, flexible regulation to help drive a full-fibre future for the whole of the UK. The proposals are part of its review of wholesale telecoms used for residential and business services. It has also published details of how it plans to regulate Openreach's leased lines.
The proposals involve a four-point plan to support competitive investment in fibre networks - improving the business case for fibre investment; protecting customers and driving competition; bring fibre broadband to rural areas; and closing the copper network.
In more urban areas, where there is likely to be a choice of networks, Ofcom is proposing to cap the wholesale price Openreach charges retail providers for its entry-level (40 Mbps) superfast broadband service to inflation. It is proposing that Openreach can charge a small premium for regulated products if they are delivered over full fibre to support the business case. Its fastest fibre services will remain free from pricing regulation to support the investment race between network builders.
To ensure that people can still access affordable broadband, Ofcom will cap Openreach wholesale charges on its slower copper broadband services, with Openreach prevented from offering discounts that could stifle investment by rivals.
In rural areas, where there is no prospect of multiple networks being deployed, Ofcom plans to support investment by Openreach as the only operator with a large-scale rural network. It will allow the company to recover investment costs across the wholesale prices of a wider range of services, cutting the risk of its investment. It BT providers a firm commitment to build fibre in these areas, Ofcom will include these costs in its prices upfront. It not, Ofcom will only permit it to recover the costs after new fibre is laid.
Ofcom recognises the need for Openreach to retire its older copper network to avoid the financial burden of running two parallel networks. It plans to remove regulation on Openreach copper products ion areas where full fibre is built.
BT welcomed the proposals, saying it was vital to have a clear, predictable and transparent long-term regulatory framework to establish the right conditions for digital infrastructure investment across the UK. BT said it would continue working with Ofcom, government and industry to maintain an environment that supports investment.
The proposals were also welcomed by Ed Dodman, directory of regulatory affairs at Ombudsman Services. He said that full-fibre is the future of fixed broadband and welcomed Ofcom's moves to stimulate competition, drive investment and improve outcomes for consumers.
Truespeed CEO Evan Wienburg also responded to Ofcom's proposals, insisting that the regulator must take account of the work being done by providers, such as Truespeed, in rural areas and not allow Openreach to waste money by overbuilding in these areas. He urged Ofcom to ensure a level and fair playing field between private and part public-funded infrastructure providers.
