Ofcom bids to speed up broadband development

Ofcom, the telecoms regulator, has unveiled new proposals to promote investment and competition in the fastest broadband services.

BT

This includes the opening up of BT’s fibre lines to rival firms, such as Sky and TalkTalk – similar to the move in which BT’s copper telephone network was opened to rival phone and broadband services.

As such, other companies would be able to control the lines and provide super-fast broadband services to their own customers. In order to promote investment, Ofcom proposes that BT should be able to set prices for these new wholesale products to enable it to make a fair rate of return.

The consultations also consider competition in current generation broadband. Ofcom’s initial conclusion is that broadband competition is effective in large parts of the country and for over 70% of the population there will be no regulation. This follows deregulation by Ofcom in areas with effective competition in the broadband market in May 2008.

However, in the least competitive areas, where consumers only have access to copper-based broadband services provided by BT (around 14% of UK premises), Ofcom proposes some locally specific price controls to protect consumers against the potential risk of excessive prices.

Ofcom’s proposed competition remedies relating to next generation, fibre-based broadband are designed to benefit consumers in all geographic areas.

Ofcom’s chief executive, Ed Richards, says Ofcom’s proposed new regulatory framework is intended to support the next phase of development by promoting investment, competition and innovation for consumers across the UK.

The news comes a few days before tomorrow’s Budget (24 March), in which digital marketers are hoping for further funding to the commitments laid out in the Digital Britain report.

In the same speech last year, the Chancellor unveiled plans to deliver a Universal Service in broadband at 2 megabits per second by 2012.

At the time business secretary Lord Mandelson said: “We need to make sure that transformational technologies like broadband are genuinely available to virtually everyone. And we need government action to help drive that change and ensure UK firms have the capacity to compete for the economic opportunities it brings.”
However, progress to date has been slower than expected.

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