UK FTTH broadband network operators hail new Ofcom regulatory scheme
Ofcom, the UK’s telecommunications regulatory authority, announced late last week as part of its latest Wholesale Fixed Telecoms Market Review that it will provide fiber to the home (FTTH) network operators flexibility on the prices they charge for at least the next five years. Those operators hailed the announcement and promised to get right to work building more FTTH networks.
BT, whose Openreach independent broadband network subsidiary is the dominant provider of broadband infrastructure in the UK (as well as the focus of much of Ofcom’s attention), has long couched estimations of their FTTH network penetration with phrases such as “if the conditions are right.” Apparently conditions are now in that happy state, based on comments from BT executives. Ofcom ruled that the price Openreach can charge service providers for use of its basic copper-based connections will remain flat for the next five years. Meanwhile, prices for top-tier FTTH connections will not be restricted, while Openreach “can also charge a bit more for regulated products” delivered via fiber as well.
“This is good news for all fiber providers in the UK. For us, it is the greenlight we’ve been waiting for to get on and build like fury,” stated Philip Jansen, BT Group’s chief executive. “Full fiber broadband will be the foundation of a strong BT for decades to come and a shot in the arm for the UK as we build back better from this pandemic. Connecting the country has never been more vital.”
“We’ve now passed almost 4.5 million premises and are building faster, at lower cost and higher quality than anyone else in the UK. Today’s regulation will allow us to ramp up to 3 million premises per year providing vital next generation connectivity for homes and business right across the UK,” added Clive Selley, CEO of Openreach.
Altnets benefit?
The fact that Ofcom also stated that it doesn’t plan to introduce cost-based prices for fiber services from any provider for at least 10 years also heartened Openreach’s altnet competitors. “This regulation will promote and protect the infrastructure competition that is enabling Britain to go full speed ahead for Full Fibre,” commented Greg Mesch, CEO at CityFibre. “It will inspire confidence and unleash a decade of innovation and investment from competitors like CityFibre, rebalancing market share away from incumbents and driving better services and prices for wholesale customers and consumers.”
That said, the Independent Networks Co-operative Association (INCA) believes Ofcom, in the market assessment it published to support the new policy, failed to give altnets their due, particularly in comparison to the role the UK Government expects such network operators to play in a newly announced initiative to provide gigabit broadband to rural UK residents (see "UK Government targets rural areas with Project Gigabit"). “While government recognizes the importance of the competitive market, Ofcom seems fixated only on incentivizing BT to invest, dismissing the majority of altnets as bit players, recognizing few of their concerns in the market review statement. If operators and their investors believe that the regulator is not willing to listen to their concerns and act on them it risks delaying deployment and undermining the government targets, particularly in more challenging rural areas,” asserted INCA CEO Malcolm Corbett.
“Under plans to cover the hardest to reach areas, government fully expects a range of ‘altnets’ to bid for contracts in the BDUK program, alongside BT Openreach and increasingly substantial independent players like CityFibre. On the other hand, Ofcom, whilst recognizing ‘that smaller altnets play an important role in providing fiber to rural areas’ serving ‘rural communities at a time when Openreach has not been willing to extend its network,’ does not view the same altnets as capable of providing significant competition to BT - in the same hard to reach areas,” Corbett added.
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Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
You can connect with Stephen on LinkedIn as well as Twitter.