Homes and businesses across the UK are set to benefit from much faster and more reliable fibre broadband under major proposals set out by national communications regulator Ofcom. Ofcom is proposing new, flexible regulation that will help fuel a full-fibre future for the whole of the UK. In 2017, the regulator set out a range of pro-investment measures that kick-started full fibre rollout by a range of broadband companies. Since then, full fibre coverage has trebled.
Ofcom is now building on that momentum with proposals that it believes will transform the business case for fibre investment – for towns, cities and villages alike. Next year, it plans to vary its regulation for different parts of the country, which – combined with the Government’s planned £5 billion funding for rural areas – is designed to help ensure nobody gets left behind.
In detail, Ofcom is now proposing to supercharge its strategy with a four-point plan to support competitive investment in fibre networks. The four points are:
- Improving the business case for fibre investment.In more urban areas, where there is likely to be a choice of networks, it will set the wholesale prices of Openreach, BT’s wholesale arm, in a way that encourages competition from new networks, as well as investment by Openreach – by giving it the opportunity to make a fair return.
In these areas, Ofcom is proposing that the wholesale price Openreach charges retail providers for its entry-level (40 Mbits/s) superfast broadband service is capped to inflation.
Given that full fibre is consistently faster, and much more reliable, than copper-based broadband, the regulator is proposing that Openreach can charge a small premium for regulated products if they are delivered over full fibre, to help the business case. Its fastest fibre services would remain free from pricing regulation, to support the investment race between network builders.
- Protecting customers and driving competition. Ofcom aims to enable people to still access affordable broadband by capping Openreach’s wholesale charges on its slower copper broadband services. To prevent Openreach from harming competition, it would be restricted from being able to offer discounts that could stifle investment by its rivals.
- Taking rural areas into the fast lane.In more sparsely-populated rural areas, where there is no prospect of multiple networks being built, Ofcom plans to support investment by Openreach – the only operator with a large-scale rural network.
Ofcom would allow Openreach to recover investment costs across the wholesale prices of a wider range of services, reducing the risk of its investment. If BT provides a firm commitment to build fibre in these parts of the country, Ofcom can include these costs in its prices upfront. If not, the regulator would only allow it to recover these costs after it lays new fibre.
- Closing the copper network.Ofcom recognises that Openreach needs to retire its ageing copper wires so it does not have the unnecessary costs of running two parallel networks. Accordingly, the plan is to remove regulation on Openreach’s copper products in areas where full fibre is built. This will support Openreach in switching customers over to the new fibre network.
“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,” comments Jonathan Oxley, Ofcom Interim Chief Executive (pictured). “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 somewhat different perspective on stimulating the deployment of full fibre in rural areas of the UK has been provided by rural FTTH infrastructure provider Truespeed.
“We all agree that rural Britain deserves full fibre broadband. It’s well understood there are a growing number of privately funded infrastructure providers already investing in these network builds, and customers are benefiting from brilliant products and services,” observes Truespeed CEO Evan Wienburg. “Ofcom must take account of the work that providers such as Truespeed and others are doing in rural areas and not muddy the playing field by allowing Openreach to waste money on overbuilding projects in these areas. We urge Ofcom to ensure a fair and level playing field between private and part public-funded infrastructure providers as the industry ramps up to deliver on the promise of full fibre broadband for all, regardless of post code.”
For more information, visit www.ofcom.org.uk