{"id":14619,"date":"2018-02-23T08:28:54","date_gmt":"2018-02-23T08:28:54","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=14619"},"modified":"2018-02-23T10:13:05","modified_gmt":"2018-02-23T10:13:05","slug":"ofcom-changes-boost-uk-full-fibre-broadband-cut-fttc-prices","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2018\/02\/ofcom-changes-boost-uk-full-fibre-broadband-cut-fttc-prices.html","title":{"rendered":"Ofcom Changes to Boost UK Full Fibre Broadband and Cut FTTC Prices"},"content":{"rendered":"

The telecoms regulator has today completed several wholesale market reviews, which among other things will force Openreach<\/a> (BT<\/a>) to adopt stiffer Quality of Service standards (installations and repairs), open up their cable ducts to rival ISPs and introduce a big price cut on 40Mbps FTTC<\/a> broadband lines.<\/p>\n

Ofcom<\/a>’s review has largely chosen to leave newer “full fibre<\/em>” FTTP<\/a>\/H\/B and hybrid fibre G.fast<\/a> broadband services alone (i.e. they don’t want to discourage the new services by being too heavy handed with regulation), while Virgin Media<\/a> aren\u2019t yet deemed to have Significant Market Power<\/strong> (SMP) like Openreach<\/a> and have also escaped the regulatory hammer.<\/p>\n

However the regulator has finalised new charge controls and changes for various other services and, to prevent BT<\/a> from stifling new investment by rivals as network competition emerges, the operator will not be allowed to make targeted wholesale price reductions in areas where rivals are starting to build new networks (details<\/a>).<\/p>\n

Jonathan Oxley, Ofcom<\/a>’s Competition Group Director, said:<\/strong><\/p>\n

“Full fibre meets the country\u2019s future broadband needs, as demand for data soars.<\/p>\n

Ultrafast speeds will allow people to download entire films, or businesses to share huge files, almost instantly. Full fibre will also underpin exciting technology like remote healthcare diagnostics, 5G<\/a> mobile and connected devices.<\/p>\n

The measures we\u2019ve set out today will support the growing number of companies who have already announced plans to build full-fibre networks, and open the way for even more ambitious investment around the UK.”<\/p><\/blockquote>\n

Matt Hancock, UK Secretary of State for Digital (DCMS), said: <\/strong><\/p>\n

“Full fibre is vital to build a Britain that’s fit for the future. Ofcom<\/a>’s measures will be instrumental in supporting full fibre roll-out by promoting competition and ensuring widespread availability of these services. The whole telecoms sector must now come together – in the national interest – to invest in the digital infrastructure that the UK needs and become a model of great customer service.”<\/p><\/blockquote>\n

The most prominent change is surely their proposed price reduction on the ‘up to’ 40Mbps (10Mbps) upload tier of Openreach<\/a>’s “superfast broadband<\/em>” Fibre-to-the-Cabinet<\/strong> (FTTC<\/a> \/ VDSL2<\/a>) service. This service can already cover around 9 out of 10 UK premises and it’s fast growing towards almost universal coverage.<\/p>\n

As a result Ofcom now believes that it’s time to cut the wholesale price of the 40Mbps tier, which should bring the price down much closer to the level of slower ADSL2+ based copper line broadband products and thus make it easier to shift subscribers off those older connections. On top of that BT<\/a>\/OR will no longer be subject to the detailed VULA Margin Condition test was imposed in 2014.<\/p>\n

\"fttc_prices_2018_wholesale_uk_openreach\"<\/div>\n

In the regulator’s view this change will “help BT\u2019s rivals to compete for customers, while several build out their own full-fibre networks<\/em>,” which is at least partly true. Internet providers like TalkTalk<\/a>, Sky Broadband<\/a> and other ISPs will no doubt rejoice and it will help to fuel stronger uptake, which is also good for the Government’s Broadband Delivery UK<\/a> programme (i.e. clawback linked reinvestment of public funding to boost coverage).<\/p>\n

On the other hand the regulator runs the risk of making slower FTTC<\/a> so cheap that it could discourage investment in new \/ ultrafast networks, which might struggle to compete against the extremely low pricing. Lest we forget that both the Government and Ofcom are currently very keen to encourage more coverage of ultrafast “full fibre<\/em>” FTTH<\/a>\/P broadband (example<\/a>), especially via alternative networks.<\/p>\n

A similar situation already exists in today\u2019s market. Just under half of the broadband lines in the UK are still based off slower copper ADSL<\/a> based lines and that\u2019s partly because they’re so cheap and not everybody sees a need for the faster services (FTTC, HFC DOCSIS<\/a>, FTTP<\/a> etc.), which tend to attractive a higher monthly premium.<\/p>\n

Quality of Service<\/strong><\/span><\/h3>\n

The review will also introduce stronger service performance and quality standards, which would require Openreach (BT) to install and repair related services more quickly than they do today. The targets for this have been tweaked a bit since the original March 2017 proposal (here<\/a>), but they still represent a big improvement.<\/p>\n

Openreach will be required to (by 2020\/21):<\/strong><\/p>\n