Finally some decent news for British Broadband. Ofcom has published a statement entitled "Delivering super-fast broadband in the UK" outlining the framework it will use to regulate the rollout of BT's superfast broadband across the UK.
The key points are:
- allow wholesale pricing flexibility to enable returns appropriate to the considerable risks of building new networks, but constrained by the market in the interests of customers;
- ensure that any regulatory pricing allows investors the opportunity to earn a rate of return that genuinely reflects the cost of deployment and the associated level of risk;
- minimise unnecessary inefficiencies in network design and build as a result of regulatory policies, while continuing to protect the consumer interest;
- support the use of new, more flexible wholesale services by BT to offer super-fast services to other service providers and consumers at competitive prices; and
- safeguard the opportunity for further competition based on physical infrastructure, by facilitating fair opportunities for companies to synchronise their investments with BT’s deployments, should reasonable demand arise, and encouraging network design that takes future potential competition into account.
BT Group Chief Executive Ian Livingston commented:
Today's announcement gives us the green light to push ahead with our 1.5 billion pounds superfast broadband investment plans to reach at least 40 percent of UK households by 2012.
Today's announcement from Ofcom has set expectations for the whole UK industry as the market evolves into a fibre-based world.
One key point is that this latest statement from Ofcom concerns Fibre to the Cabinet (FTTC), not Fibre to the Home (FTTH). The majority of the £1.5bn spend on fibre will be mainly on the cabinet based service, the regulatory requirements for the FTTH service have previously been covered by Ofcom.
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