New Ofcom rules to boost full-fibre broadband

Marco Green
February 23, 2018

Ofcom suggested streets could be connected to full fibre in "hours" rather than days, as companies would no longer have to dig up roads to lay fibre. Under Ofcom's proposals, the company must fix any faulty infrastructure and clear blocked tunnels where necessary so providers to access them.

It added that telecoms firms needed to "be certain they can secure a return on their investment" if a nationwide rollout of full fibre was to be realised.

The telecoms regulator claimed its plans will slash the cost of full-fibre broadband network builds by up to 50% and help the industry hit its own targets of connecting up to 20% of United Kingdom premises to FTTP broadband by 2020 - the current figure stands at around 3%.

Companies including Vodafone, TalkTalk, as well as BT itself, have announced investments in new fibre networks in recent months.

Openreach wholesale prices for basic superfast broadband will also be regulated, "to protect against high prices, particularly in places that are unlikely to benefit from competitive investment, such as rural areas". This supports incentives for operators to build full-fibre networks.

Ofcom has slashed the price BT's Openreach can charge operators for superfast broadband, in a package of measures BT said will hit its bottom line to the tune of £120m next year. After consulting on the matter, this is to be increased to £11.92.

The proposals - which were first set out in draft form nearly 12 months ago as part of Ofcom's Wholesale Local Access Market Review - have now been submitted to the European Commission (EC) for review, ahead of a planned implementation in 2018. "We would hope that the fibre laying savings would eventually be passed on to home broadband customers".

Virgin Media has made progress on its previous commitment to reach a further four million premises, half of which will be full-fibre.

KCOM to have full-fibre coverage across all of its network by March 2019, covering 200,000 premises in the Hull area.

BT's share price was trading up more than 4% in London at the time of publication.

"Today's measures are created to help deliver this and promote further investment beyond these ambitions".

BT Openreach
BT’s Openreach will be forced to open up telegraph poles and tunnels to rivals as part of Ofcom’s new measures

However, Ofcom said it will roll out new stricter rules forcing BT's infrastructure arm to "repair faults and install new broadband lines more quickly".

Openreach will be required to: complete at least 88 per cent of fault repairs within two days, up from 80 per cent today; complete 97 per cent of repairs within seven days; and install 95 per cent of connections on the date agreed with the telecoms provider, up from 90 per cent today.

These new requirements must be met by 2020/21.

Ofcom also set out interim targets to ensure progressive improvements in its service before then. It will monitor Openreach's performance closely and step in if these mandated standards are not met.

In a stock market update BT said: "Today's statement from Ofcom gives us certainty on the pricing of key products for the next three years".

But it also noted that caps would chew into annual earnings at Openreach, its infrastructure business, reducing sales and profits by £80-120 million ($112-168 million) in the 2018/19 fiscal year and "in the range of low to mid tens of millions of pounds" in each of the two subsequent years.

Further, it said the net impact it would have on the overall group would depend on dynamics in the retail market.

"We are considering the implications for full and fair competition of the restriction on BT's ability to vary its FTTC and G.fast wholesale rental charges between different geographic areas", it said.

Talk Talk said the announcement was "good for consumers, competition and investment".

At the same time, Ofcom has a role to ensure affordable access to superfast broadband for people and businesses.

Other reports by Click Lancashire

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