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Ofcom Welcomes BT's £1.5bn Fibre Plan

Posted: 15th Jul, 2008 By: MarkJ
Ofcom's Chief Executive, Ed Richards, has welcomed BT's plan to upgrade the country's national broadband infrastructure with a super-fast mix of fibre solutions. Richards also heralded the move as showing clear signs that the market was finally moving in the right direction.

He also commented on how Ofcom would be dealing with the tedious regulatory side of BT's plan:

"With this announcement industry will need further regulatory detail and that is exactly what Ofcom will provide. Firstly, given the potential consumer benefits, regulation needs to provide the right incentives for operators to invest, recognising the inherently risky nature of these investments.

Secondly, we want to continue to promote a vibrant competitive environment as we enter the next generation of communications services.

Thirdly, we are already working closely with communications providers, and our wider stakeholders, to ensure there is a concerted dialogue on the regulatory environment to support investment and competition.

Building on these discussions and our policy work over the last two years, we will be publishing further detailed proposals for the regulatory framework for Next Generation Access networks in September.
"

It's expected that Ofcom may, initially at least, free up its controls over any new services so as to allow for a period of growth and return upon BT’s investment, though it's too early to know how long any such relaxation of rules would last. This could put some of the operators’ competition at a disadvantage, though BT has promised to make its new services available at the wholesale level.

We suspect that a situation similar to the initial emergence of ADSL broadband products in 2000/2001 is likely to occur, where the services were quite expensive for a few years and followed a similar level of pricing between all providers.
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