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Ofcom Outlines Next-Gen Broadband Investment Plan
By: MarkJ - 03 July, 2008 (2:15 PM)

Ofcomís Chief Executive, Ed Richards, has used the industry trade body Intellectís conference in London this morning to set out its pro-investment framework for next generation, super-fast broadband networks. He also invited industry leaders to commit and work with it on the rollout:

"Our position is clear. Ofcom favours a regulatory environment for the next generation of networks and access that both allows and encourages operators to make risky investments, to innovate for the benefit of consumers and, if the risks pay off, for the benefit of their shareholders too.

We are very clear that if operators are going to make investments in new infrastructure, investment that is inherently more risky than developing the existing infrastructure, then they need to know that the regulatory framework will allow them to make and keep a rate of return that is commensurate with the risks they are taking. And they need a time horizon that gives them a degree of assurance for a realistic period in the future; that they know for example that the regulator will not suddenly change the rules of the game to reduce the returns just as the rewards for the risk start to flow in.

We want investment in a competitive environment. It is encouraging that cable is now talking about seriously rolling out their next generation high bandwidth product at the end of the summer. The emerging success and rapid take-up of mobile broadband will provide a further spur to the fixed line operators to upgrade to next generation high bandwidth products to differentiate themselves competitively to consumers.
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Richards words appear to hint that Ofcom is more likely to give the major investors (e.g. BT) a greater degree of initial control over such services. However, given the extreme costs involved (roughly 10 to 15 billion pounds), this is probably the only feasible way of doing things.

Public funding would of course help to open any future markets up sooner, although the government has remained fairly opposed to such a notion. However, this could leave rural users in the cold as more economical urban locations would undoubtedly gain the best and fastest services first.

Ofcom now plans to host the first of a series of working sessions focused on practical action and resolution of areas of uncertainty as soon as possible. The full text of the speech will be available at:

http://www.ofcom.org.uk/media/speeches/2008/


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