Ofcom Set Out 2026 Market Review Changes to Boost UK Gigabit Broadband UPDATE3

The UK telecoms regulator has today published the outcome of their major Telecoms Access Review 2026 (TAR), which largely tweaks their existing approach to market regulation in order to help promote competition and investment in gigabit broadband (1000Mbps+) and business connectivity. But not everybody is going to be happy.

Ofcom conducts a single holistic review of the markets for both Business Connectivity (i.e. Leased Lines / Ethernet and Dark Fibre etc.), and the more residential focused Wholesale Local Access sector (i.e. broadband products like FTTP and FTTC etc.), every 5 years. The review also covers inter-exchange connectivity (IEC), wholesale access to existing physical infrastructure (PIA etc.) and a separate review is being conducted for Hull (KCOM).

In case anybody has forgotten, the last market review – published in March 2021 (here) – was largely intended to set the stage for a decade of investment in gigabit broadband expansion. The review introduced various changes, such as regulation of Openreach that varied by geography (i.e. focused on the areas where they have Significant Market Power – SMP), a new Dark Fibre Access (DFA) product, measures to help retire legacy copper line networks (ADSL, analogue phone etc.), some limited restrictions on broadband discounts and revised Quality of Service (QoS) standards.

The measures also helped to provide some support for the UK’s government’s original £5bn Project Gigabit broadband rollout programme, which was similarly launched in March 2021. This aims to help extend gigabit broadband networks to reach “nationwide” coverage (c. 99% of the UK) by 2032. So far most of the national rollout has actually come from commercial builds, with Project Gigabit primarily helping in the final c.20% of hard-to-reach rural areas.

Suffice to say that gigabit broadband coverage has expanded significantly since 2021, partly helped by Ofcom’s changes and supported by a wide mix of alternative networks (Summary of UK Full Fibre Builds). But the likes of Openreach, Virgin Media (inc. nexfibre), CityFibre, Netomnia (inc. Brsk), CommunityFibre, Hyperoptic and others have had some of the biggest impacts. Despite this, many operators have suffered a slowdown over the past 3 years due to the worsening economic climate (high interest rates, rising build costs and aggressive competition etc.).

Natalie Black, Ofcom’s Group Director for Infrastructure and Connectivity, said:

“Today marks a major milestone on the road to a better connected, more productive Britain.

Five years ago, we put in place new rules to drive competition between networks and get them building full-fibre broadband, which now reaches nearly eight in 10 homes and offices across country.

But our mission isn’t yet complete, and we’re creating the right conditions for the fibre rollout in its final phase.

Our review of the rules has been an extensive and complex undertaking given the nature of the market, and we appreciate the considered engagement from the sector.”

Ofcom’s Changes for TAR 2026

The fact that Ofcom’s previous market review, in 2021, had already set out the main template for the next decade was always going to mean that their 2026 review had to tread very carefully, veering more toward careful tweaks to existing regulation than radical change. This is necessary in order to maintain some stability and predictability for the established environment, at least until 2031 when the next big review occurs.

On the other hand, the regulator does still have to recognise the shrinking size of non-competitive areas (defined as ‘Area 3’ below – mostly rural locations), which back in 2021 accounted for 30% of the UK and this time around has been reduced to just 14%. This reflects the positive progress being made in fibre network expansion and also means that Openreach should normally benefit from softer regulation across more of the UK.

Rural broadband operator Gigaclear had previously warned Ofcom that Area 3 was at risk of being made “far too small” (here) and highlighted how “just because an altnet has built it, doesn’t immediately make it commercially viable for two operators“. But Ofcom’s final proposal has opted to adjust the initially proposed size for Area 3 from 10% to 14%.

Finally, various altnets had also called on Ofcom to ensure fairer pricing for access to run fibre via Openreach’s existing cable ducts and poles / PIA (here, here and here), which Openreach has contested (here). But after a quick glance, we don’t think the regulator has advanced all of those demands, although it will take a deeper dive before we are certain (there are hundreds of pages to go through).

As usual, the regulator has the incredibly difficult job of trying to balance the many competing (vested) interests of many rival network operators and retail ISPs, so inevitably there will always be some winners and losers.

Ofcom’s Telecoms Access Review 2026 Changes

We have concluded that BT has significant market power (SMP) in a number of markets, and so are imposing a regulatory framework to address the competition concerns that arise as a result. Our remedies are largely the same as in our last review, except where recent or prospective market developments indicate an update is necessary to provide regulatory stability and maintain incentives for investment and network competition. Our decisions are:

➤ Maintaining access to Openreach’s telegraph poles and underground ducts:

We have decided that Openreach will continue to be required to allow all network operators to deploy and operate their own fibre networks using its infrastructure through its Physical Infrastructure Access (PIA) products. To ensure a level playing field between Openreach and other network operators, Openreach will continue to be subject to a strict no undue discrimination obligation and the charges paid by other operators should reflect a fair share of Openreach’s costs, based on their use of Openreach infrastructure. While our approach to PIA rental charges is broadly consistent with that set out in 2021, we have made some adjustments to ensure that there is a level playing field. We have also carefully considered whether to require Openreach to offer an alternative pricing structure to reduce the costs of PIA for rural network deployment. However, we consider that our current approach delivers fair prices and has been effective in promoting network build across both urban and rural areas, including rollout supported by public funding schemes.

➤ Continuation of our approach to regulating wholesale broadband differently in different parts of the UK, to reflect the potential for effective network competition:

We recognise that competitive conditions are different across the UK for the supply of wholesale broadband services, and so we are maintaining our overarching approach based on distinct geographic areas to reflect this. We have seen significant network investment since 2021 by rivals to Openreach, and we have therefore carefully considered the competitive conditions in areas where two rival networks have been built in addition to Openreach. However, we have decided not to define this as a distinct geographic market (i.e. ‘Area 1’). We have therefore defined two distinct geographic areas:

• Area 2, where there already is, or there is likely to be potential for, material and sustainable competition. This area has expanded from 70% to cover 86% of UK premises, reflecting more widespread build (actual and planned) by altnets than envisaged in 2021. In this area we are continuing to set regulation that promotes investment and competition by alternative providers (including maintaining a stable regulatory environment for those investments already made), while also providing protection to consumers as competition develops. We will do this by continuing to set flat, inflation-adjusted prices for a basic superfast broadband product whilst allowing flexibility on pricing for other speed services. We have decided to do this via a charge control. To ensure this price cap remains effective, we propose to move the regulation from Openreach’s products that support download speeds of up to 40 Mbit/s to those supporting up to 80 Mbit/s, in line with changes in the market driven by the increasing use of data by consumers.

• Area 3, where there is not, and there is unlikely to be potential for, material and sustainable competition. In the remaining 14% of the UK, we will continue to allow Openreach the opportunity to recover the reasonable costs of its investments in rolling out its full-fibre network commercially, but recognise the important role public subsidy will play in rollout in this area. We also seek to promote competition based on access to Openreach’s network to protect consumers. As in Area 2, we have decided to move the price cap regulation from Openreach’s products that support download speeds of up to 40 Mbit/s to those supporting up to 80 Mbit/s, and set flat, inflation-adjusted prices for these products.

➤ Fair wholesale prices for Openreach and other networks:

While our regulation should permit Openreach to make its full-fibre services competitively attractive to its Internet Service Provider (ISP) customers, we have decided to maintain restrictions on deals that could stifle investment and the development of sustainable network competition.

Specifically, we will continue to restrict Openreach’s ability to set discriminatory geographic discounts in Area 2 unless they gain our consent and have decided to extend this to cover all charges (not just rental charges as in the previous review). We are also concerned that Openreach could offer commercial terms that deter ISPs from using competing networks, depriving these networks of demand and undermining the development of network competition in the long run. We have decided that Openreach should continue to be required to give notice of the introduction of certain commercial terms, and that this notice period be extended from 90 days to 120 days. This allows us to assess any deals before they take effect.

We have also updated our guidance on the types of commercial offers that we might consider to be problematic and, importantly, on how we will apply our regulation to take account of market conditions in determining whether geographic discounts or other commercial terms should be allowed. We expect that, with our remedies in place, network competition is likely to continue to evolve and develop over this review period and that there may be future scenarios in which we can relax our position on Openreach offers. We have provided guidance on how we will look at each offer put forward by Openreach in the context of market conditions and the state of competition at the time and reflect an up-to-date view in our decision of whether to consent.

➤ Supporting migration from legacy networks and exchange exit:

The rollout of full-fibre networks is a key enabler of digital transition for the country, which will deliver economic benefits as consumers and businesses migrate to better, more reliable services, and legacy networks are efficiently retired. Our approach in this review seeks to support this transition:

• As Openreach lays a full-fibre network to replace the ageing copper network, it should not have to incur unnecessary costs in running two parallel networks. We continue to support the retirement of Openreach’s copper-based network, while facilitating the wider objectives of this review, including promoting network competition and protecting consumers. We have decided to retain the current framework, which progressively transfers regulation (including price protections) from copper to full-fibre services, in line with the approach set out in 2021. In parallel, we are also consulting on the specific conditions for when price protections on copper-based services should be removed.

• Openreach will also start to exit exchanges during this review period and negotiations with its customers on specific terms of exit are ongoing. We are supportive of Openreach’s objectives, which provide the opportunity for both Openreach and other providers to consolidate infrastructure, reduce energy consumption and increase efficiency. We have decided to maintain our existing regulation where appropriate, to mitigate risks to competition and consumers during this review period, as well as making changes to rules for services that connect exchanges together, to reflect exchange exit.

➤ Continuation of our approach to regulate leased lines differently in different parts of the UK, to reflect the level of current or prospective competition:

We recognise that competitive conditions are different across the UK for the supply of leased lines services, and so we have set different market boundaries compared to wholesale broadband services, reflecting differences in how the markets have developed since 2021 and how we expect them to develop over the next 5 years. We are not revisiting our previous assessment of the Central London Area (CLA), which has been deregulated since 2019. Elsewhere, we have decided to impose different regulation in different areas as follows:

• High Network Reach (HNR) area, where there is significantly more leased lines network competition, but BT still has SMP. In this area, which covers 9% of UK postcode sectors, we have decided that Openreach should provide access to its leased lines services at fair and reasonable prices.

• Area 2 where there currently is, or there is likely to be the potential for, material and sustainable competition. In this area, which covers 54% of UK postcode sectors, we have decided to continue to require Openreach to provide access to its active leased lines services, and to set flat, inflation-adjusted price caps.

• Area 3 where there is not, and there is unlikely to be potential for, material and sustainable competition. In this area, which covers 34% of UK postcode sectors (and is larger than the Area 3 we have defined for wholesale broadband services), we have decided to continue to require Openreach to provide dark fibre and to set prices based on its reasonable costs. In addition, we have decided to continue to require Openreach to provide access to its active leased lines services. For higher bandwidth active services, we have decided to maintain flat, inflation-adjusted price caps while the market transitions to dark fibre. For lower bandwidth active services (1 Gbit/s and below), we have decided to reduce prices in line with costs as dark fibre is a less attractive alternative than we expected in 2021.

➤ Inter-exchange connectivity (IEC) market:

IEC services are used by telecoms providers to connect BT exchanges located in different geographic areas in order to deliver traffic between their customers and their own networks. IEC services typically use similar products to those in the leased lines access market, such as leased lines at different bandwidths and dark fibre. We have decided to deregulate exchanges where there has been an increase in competitor presence since our last review such that Openreach now faces two or more competitors. In cases where Openreach faces one or no competitors at an exchange, we have decided to require Openreach to provide dark fibre, with prices set to reflect reasonable costs. Compared to our approach in 2021, this extends the availability of dark fibre to exchanges where there is one competitor present or nearby, because we do not expect further material competitive investment in these exchanges. Our decisions seek to promote competition through access to dark fibre, which we consider to be an attractive remedy for IEC services, and to protect consumers from high prices. We have also decided to continue to require Openreach to provide active IEC services from these exchanges and have set flat, inflation-adjusted prices.

➤ Quality of service (QoS):

We have decided to broadly maintain the existing rules for how quickly Openreach must carry out repairs and installations of its main network access products in regulated markets including copper-based broadband, Ethernet and dark fibre. However, to reflect the decline in Openreach’s copper-based broadband services over the review period, we have decided to make an adjustment in how performance is assessed. Where customers are more likely to have no choice but to rely on Openreach for their full-fibre broadband services (i.e., Area 3), we are imposing new backstop QoS standards.

➤ Our approach beyond 2031:

Consistent with the approach we set out in 2021, we recognise that the investments being made by all network operators in gigabit-capable networks have long payback periods and material competition takes time to develop and become sustainable. While our future decisions will depend on the circumstances that exist when we carry out our next reviews, we are reiterating how we would approach future decisions. With our remedies from this review in place, we expect competition from new providers to continue to develop, putting us on a path to even greater deregulation in the future. Where effective competition emerges for wholesale services, there will be no need for Ofcom to regulate these services. If we consider that investment and sustainable competition are still in the process of emerging beyond 2031, we would expect to continue to regulate in a way that continues to support this. If there is a need to move to cost-based regulation of Openreach in the future, we will honour the fair bet principle. This means that in setting any price controls, we would expect to allow BT to keep the upside (i.e. returns in excess of its cost of capital it has earned up to that point), as well as ensuring it can earn its cost of capital going forwards. This means that BT would have the opportunity to earn a return above its cost of capital over the whole fibre investment cycle.

Overall there have been some mild tweaks to the geographic market definitions (vs those proposed last year) – softening the impact a bit for some, as well as some limited adjustments to PIA pricing, longer review periods for any proposed discounts to Openreach’s FTTP prices (120 days of notice instead of 90 and tweaks to the guidance on what Ofcom considers acceptable) and Ofcom will consult on the specific conditions for when price protections on older copper-based services should be removed.

Generally speaking, it doesn’t appear as if too much has fundamentally changed since the original proposals first surfaced in March 2025 (here), although it will take time for us and the wider market to examine whether the tweaks they’ve made since then are going to have a bigger impact.

The size of the competitive vs non-competitive market areas has of course also shifted with the times, and Ofcom appears to have got a tiny bit tougher on Openreach’s ability to discount the wholesale price of their FTTP broadband products for ISPs. But the regulator hasn’t completely blocked this.

Alternative networks, which are carrying a lot of financial risk, often complain that any price cuts by Openreach will make it harder for their own FTTP networks to gain a return on investment – allowing the incumbent to use its scale against them. On the flip side, Ofcom can’t completely block Openreach from responding to the growing competition, particularly as, between 2024 and 2025, they suffered 860,000 net line losses to rivals and consumers benefit from lower prices.

The initial proposals didn’t appear to ruffle too many industry feathers, with most network operators giving it a cautious welcome, and we expect more of the same for their final proposals. But we’re currently still waiting to see if this will be enough to allow Openreach to feel comfortable in setting out their plans for reaching up to 30 million premises with their full fibre network by 2030 (the current build plan only goes up to Dec 2026 – the 25m premises target).

As expected, the biggest changes are instead likely to surface in the next review (2031), with Ofcom hinting that the possibility of “effective competition” emerging by that time could mean there is “no need” for them to “regulate beyond access to ducts and poles“. But a lot can happen in five years, such as the UK ending up back in the position of a duopoly between Virgin Media (inc. nexfibre) and Openreach. Time will tell. Otherwise, today’s decisions will take effect from 1st April 2026.

Ofcom’s TAR 2026 Documents
https://www.ofcom.org.uk/../statement-promoting-competition-and-investment-in-fibre-networks-telecoms-access-review-2026-31

Consultation on approach to copper retirement
https://www.ofcom.org.uk/../approach-to-the-copper-retirement-second-threshold-calculation-TAR-review-2026-31

UPDATE 8:42am

The first comments have just come in from two of the markets biggest players, which will naturally need time to assimilate the mass of changes that Ofcom have just introduced before being able to give a proper verdict.

Mark Shurmer, MD for Regulation at Openreach, told ISPreview:

“No one is going further or faster than us to build the UK’s best network(s). Our investments help customers – and the country – do brilliant things, but they only happen when the environment is stable and supportive. That’s why Ofcom’s review is critical to the future of digital connectivity across the UK.

But this is a complex document that we need to review in full. We’ll continue to work with Ofcom to make sure the regulation set today will allow fair competition within that market to get the best results for consumers.

This market is evolving rapidly and, with competition more intense than ever, it’s really important that regulation keeps pace with that change.”

A Virgin Media O2 spokesperson said:

“With scaled wholesale competition not yet established in the UK, Ofcom is right to hold its nerve, provide certainty and avoid a rush to deregulation. It must now remain vigilant and ensure compliance with the rules it has set out.

While green shoots are emerging, if Ofcom wants genuine long-term scaled competition to Openreach in line with its goals then consolidation of a highly fragmented fibre market coupled with continued investment is the key to achieving that.

It is essential words now translate to action and the UK sends a clear message to support investment in the next-generation digital infrastructure that will underpin economic growth.”

Rajiv Datta, CEO at nexfibre, said:

“Ofcom is right to stay the course and prioritise regulatory stability. This is not the moment to deregulate the incumbent; what’s needed is steady oversight and firm enforcement of the framework already in place.

The reality is that sustainable, nationwide competition to BT Openreach will only be achieved through consolidation and continued investment. The fibre market remains too fragmented to deliver this on its own. nexfibre’s acquisition of Netomnia is an important step towards building the scale required to change that.

Now is the moment for clear action. The UK must show it is committed to supporting the investment needed to secure the long‑term digital infrastructure that will drive productivity, innovation and economic growth.”

UPDATE 9:07am

Some more comments have arrived after our industry hails.

A CityFibre spokesperson said:

“Ofcom is doubling down on its long-term strategy to promote sustainable infrastructure competition, continuing to strengthen the much-needed constraints on anti-competitive pricing from BT Oprenreach and recognising the importance of strong rival fibre networks to challenge the incumbents.

The Telecoms Access Review provides CityFibre with a stable regulatory framework as we scale our network and bring the benefits of genuine infrastructure competition – lower prices, faster speeds and better services – to consumers and businesses nationwide.”

A spokesperson for Hyperoptic said:

“We welcome the publication of Ofcom’s Telecoms Access Review Statement. This is an important framework for the future of the UK’s fixed broadband market.

We will take the time to review the document in full and assess the details of today’s Statement, and we look forward to continuing to engage with Ofcom and Government as the measures set out are implemented.”

UPDATE 10:23am

Network operator Fibrus has responded, albeit while noting that Ofcom rejected their proposals to amend the costs they pay to Openreach to access its poles and ducts in rural areas.

Conal Henry, Chair of Fibrus, said:

“Today marks the beginning of a permanent digital divide between rural and urban Britain. Ofcom’s failure to address the margin squeeze on alternative operators in rural areas kills the chance of any further investment from them and, by extension, reactionary investment by BT/Openreach. This is a disaster for rural Britain, communities will suffer without this infrastructure and Ofcom is to blame.”