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Ofcom Promises BT - Next Gen Broadband Will Make Money

Posted: 13th Feb, 2009 By: MarkJ
Ofcom's chief executive, Ed Richards, has confirmed to BT that its forthcoming next generation (fibre optic) broadband regulatory framework will indeed give the operator an adequate return on its investment and would not be an "obstacle":

"Regulation will not be a barrier to this kind of investment," said Mr Richards to the Financial Times, adding that Ofcom would publish its planned rules next month. "I am confident we will lay out a regulatory framework which will clearly enable companies to be free to make a return which justifies the investment they are making."

The confirmation will be welcomed by BT, which this week reported suffering from a 74% fall in pre-tax profits for the third quarter. It had been feared that the difficult economic climate might force BT to scale backs its £1.5bn next generation broadband plans.

Richards also indicated that BT would be given a considerable amount of "pricing freedom" over its wholesale charges to rival ISPs. The news may make BT happy, although we suspect that rivals will be less than thrilled.

Unfortunately, without public funding to help get the ball rolling, there's really not much of an alternative.
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