Telecoms regulator Ofcom has updated its wholesale rules with the aim of accelerating the full-fibre rollout.
Full-fibre broadband was a key pledge of Johnson’s government but, like most plans, was somewhat derailed by the COVID-19 pandemic.
With the UK’s successful vaccine rollout enabling a cautious roadmap to lifting lockdown restrictions, the focus is now shifting to how the country can “build back better” from a virus which dithering and chaotic policymaking throughout led to one of the worst economic and excess death impacts in the world.
The need for robust connectivity is one thing the pandemic made abundantly clear. Ofcom says it’s playing its part to speed up the rollout of both full-fibre and 5G.
Dame Melanie Dawes, Chief Executive of Ofcom, said:
“Over the past year, being connected has never mattered more. But millions of homes are still using the copper lines that were first laid over 100 years ago.
Now it’s time to ramp up the rollout of better broadband across the UK.
We’re playing our part – setting the right conditions for companies to step up and invest in the country’s full-fibre future.
This is a once-in-a-century chance to help make the UK a world-leading digital economy.”
Ofcom has decided not to set a price cap on Fibre-to-the-Premises (FTTP) connections – more commonly referred to as “full-fibre” – offered by BT’s wholesale subsidiary Openreach, which runs a near-monopoly on British fibre infrastructure.
Kester Mann, Director of Consumer and Connectivity at CCS Insight, said:
“This crucial ruling is a huge boost for the deployment of full-fibre broadband that will benefit millions of UK homes and businesses for years to come. It comes at a time when the value of connectivity has never been more appreciated as the pandemic triggers a major change in how people live and work.
The UK’s over-reliance on using dated copper lines for 21st-century connectivity has held back its aspirations to become a world-leading digital economy. Today’s news sets fresh conditions to help accelerate full-fibre broadband deployment to help it move out of the slow lane.”
BT has been awaiting Ofcom’s decision before it commits £12 billion of investment to increase the rollout of full-fibre connections. The country’s largest broadband provider says it will now “build like fury” following Ofcom’s announcement.
However, Ofcom will face criticism that it’s handed such an already powerful player very generous terms which may reduce competition and lead to more expensive connections for consumers.
“The news may not be so appreciated among service providers that rely on Openreach and other infrastructure,” added Mann. “But this was always a delicate decision for the regulator which had to tread a fine line between encouraging long-term investment and maintaining fair competition. It may have got it about right.”
Dame Dawes also denies the move is anti-competitive.
Speaking to BBC Radio Four’s Today programme, Dawes said: “We certainly want to make sure that BT can have a fair bet on this investment, but at the core of our approach is that we are trying to get competition into the wholesale network layer, of broadband for the future, really for the first time in quite a new way.”
Fibre-to-the-Cabinet (FTTC) connections, which use slower copper for the “last mile” into premises and make up the vast majority of connections today, will have their prices capped. This should mean FTTC connections that most consumers are used to – offering up to around 40 megabits per second – should see little change in cost.
However, Openreach is also granted permission to switch off FTTC connections in areas where it’s made FTTP available—which Ofcom says will incentivise the uptake of full-fibre. The regulator says must be done “progressively” and that customers would be “protected” to ensure they retain internet access.
It’s been a big week for Ofcom. Just yesterday, the regulator also announced the results of its 5G spectrum auction following a two-month delay after another wave of COVID-19.
If Ofcom has got it right, the UK should now have the regulatory environment in place to deliver the next-generation digital infrastructure it will need to build back better from the pandemic and solidify its place as a world-leading technology hub.
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