Ofcom has announced two strategies to promote the deployment of better broadband in the United Kingdom by compelling BT to open up its network further to competition. In the absence of any grand plan, the communications regulator is hoping market economics will deliver what the government optimistically hopes will be the best broadband in Europe. Currently, only seven in ten adults in the United Kingdom have access to broadband. Meanwhile, with the end of analogue television in sight, one in five sets still receives broadcasts that will be switched off within a couple of years.
Under the Ofcom rules, BT will have to grant competitors access to its infrastructure to stimulate the deployment of fibre-optic networks. Although there are many economic benefits to fibre-optic broadband, one of the main drivers for consumer adoption may be access to online television and video services.
BT will be required to offer competitors access to new fibre-optic lines, in a process known as virtual unbundling. Any such connection must not be artificially limited, but the price will not be regulated. BT already offers a wholesale product and will develop it in line with these requirements.
BT will also be required to offer access to its ducts and poles, providing detailed information about their availability, substantially reducing the cost of fibre roll-outs for third-parties.
The intervention is intended to promote competition where BT invests in fibre and encourage investment by other providers in other areas, including rural regions. While an imposition on the national telecommunications provider, it also provides the regulatory clarity to enable BT to invest in fibre deployment, knowing that it should still be able to make a commercial return.
Ed Richards, the chief executive of Ofcom, claimed the development of super-fast broadband is well underway in the United Kingdom with the provision of “a clear regulatory framework to promote investment, competition and innovation to enable as many consumers as possible to benefit from these exciting new services”.
TalkTalk plans to use the BT network to offer high-speed broadband. BT and TalkTalk are both partners in the planned broadband television platform YouView.
Virgin Media, which offers a 50 megabit per second service to half the households in the United Kingdom and is due to launch a 100Mbps product, is in pole position to benefit. The cable company has already tested the possibility of extending its network using overhead lines. It welcomed the intervention saying that it would open up areas of the country not already served by super-fast broadband, although adding that the price for accessing poles and ducts should not “limit the ambitions of getting next-generation connectivity to those people living outside our towns and cities.”
Fast fibre-optic connections may still be a pipe dream for many homes in Britain, many of which have yet to connect to broadband, some of which still rely on analogue television.
With less than two years until the end of analogue television in the United Kingdom, uptake of digital television is rising, albeit more slowly, now reaching nearly 93% of households. However, one in five televisions still receives analogue terrestrial broadcasts. Nearly two million homes in the United Kingdom still rely exclusively on analogue television.
The latest digital television figures published by Ofcom are based on research conducted by GfK NOP.