Ofcom, the UK’s regulatory authority, has opened for comment a set of proposals that the regulators believe will further spark fiber deployment. The changes include making it easier for Openreach, BT’s broadband access network infrastructure subsidiary, to shut down copper networks as it lays more fiber.
The proposed regulatory changes, unveiled January 8, seek to ensure that fiber reaches rural areas of the UK. The regulator noted that its previous set of pro-fiber policies has led to a number of companies either announcing or initiating full-fiber broadband network deployments (see "Ofcom offers rules to encourage UK fiber to the home deployments"). All-fiber broadband networks now cover approximately 10% of the UK, versus 3% three years ago, Ofcom states. Such initiatives have come from Openreach as well as a growing number of alternative carriers that could compete with Openreach.
However, Ofcom notes that the business case to extend such deployments into comparatively less populated rural areas is likely to inhibit the deployment of competitive networks. Therefore, the authority has proposed a set of policies that it believes will help ensure that the £5 billion the UK Government plans to devote to rural broadband infrastructure roll-outs is well spent (see "UK Future Telecoms Infrastructure Review spells out full fiber, 5G strategies").
To this end, Ofcom says it plans to use different regulatory strategies in different parts of the country. Where competition is in place, it will not regulate Openreach’s broadband products. In what the organization termed “potentially competitive areas,” Ofcom would maintain its current insistence on flat, inflation-adjusted, regulated prices for Openreach’s entry-level superfast broadband service (up to 40 Mbps downstream) delivered via copper networks. However, Openreach would be able to charge “slightly more” for fiber-fed services, and Ofcom would free Openreach of price restrictions on higher-speed offerings. However, to protect competition, Openreach would not be allowed to offer regionally based discounts. Openreach also would have to give 90 days’ notice before enacting commercial terms that might inhibit competition to enable Ofcom to review such terms.
In “non-competitive areas,” which likely would include rural parts of the UK, Ofcom proposes a series of incentives to prod Openreach into further fiber investments. These focus on making it easier for Openreach to recoup its expenses and include the ability to recover such costs across a wider range of services, including being able to include the cost of deployments in the prices it charges customers “from the outset” with a firm commitment to fiber. Openreach also would be required to provide dark fiber links to support mobile services deployments and other network growth.
Ofcom says it will determine which areas fall under which category at some unspecified point in the future. It proposes to take the same approach with leased lines. Meanwhile, regardless of how competitive an area may be, Ofcom will encourage Openreach to overbuild copper networks with fiber by removing regulations on copper networks in exchange areas where fiber is present, which Ofcom posits will spare Openreach the expense of running parallel networks.
Finally, to increase competition, Ofcom says it will grant alternative providers greater access to Openreach’s poles and ducts to speed the deployment of competitive fiber broadband networks.
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