UK regulator Ofcom has unveiled new plans to accelerate the slow rollout of fibre, including caps to what BT’s infrastructure arm, Openreach, can charge for access in urban areas combined with incentives for the infrastructure player to invest in rural areas.
Opening a consultation on its review of the wholesale fixed telecoms market, Ofcom also unveiled plans to remove regulation on Openreach’s copper network in areas where fibre is fully built out, opening the way for the operator to shut down the copper network. The regulator said it would protect customers during the transition by transferring regulation, including price protections currently in place from copper to fibre services.
In the meantime, the watchdog is capping Openreach’s wholesale charges on its copper broadband serviceswhile at the same time restricting it from being able to offer discounts that could stifle investment by its rivals.
In urban areas, Ofcom is proposing that the wholesale price Openreach charges retail providers for its entry-level 40 Mbps broadband service is capped to inflation, while allowing the telco to charge a small premium for regulated products if they are delivered over full fibre. Other fibre services will remain free from pricing regulation.
In rural areas, Openreach will be able to recover investment costs across the wholesale prices of a wider range of services. The watchdog said that if BT provides a firm commitment to build fibre in these parts of the country, it can include these costs in its prices upfront.
“These plans will help fuel a full-fibre future for the whole country. We’re removing the remaining roadblocks to investment and supporting competition, so companies can build the networks that will drive the UK into the digital fast lane,” said the regulator’s interim CEO Jonathan Oxley.
“Full-fibre broadband is much faster and more reliable. It’s vital that people and businesses everywhere – whether in rural areas, smaller towns or cities – can enjoy these benefits. So we’re making sure companies have the right incentives to accelerate full fibre to every part of the UK.”
A spokesperson for Virgin Media, BT’s main competitor in high-speed broadband at national level, said: “We are rolling out gigabit connectivity across the UK and passionately believe that building next-generation broadband needs to be supported by regulators and Government. These measures are an important step forward in providing the long-term certainty and clarity network investment requires.”
Openreach meanwhile gave a cautious welcome to the proposals.
“Today’s proposals appear to be a big step in the right direction to give clarity and investment certainty,” said a spokesperson.
“Like the Government and Ofcom, we want to upgrade the UK to faster, more reliable full fibre broadband. We’re getting on with the job, building to 26,000 premises each week and we remain on track to reach four million homes and businesses by the end of March 2021.We’ll consider the range of proposals carefully and will continue to work with Ofcom and industry on getting the conditions right to help achieve the Government’s ambition of rolling out gigabit capable broadband across the UK as soon as possible.”
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18th January 2020