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Ofcom Proposes Regulation to Boost Rollout of UK Fibre Optic Broadband

Posted: 23rd Mar, 2010 By: MarkJ
fibre optic cable ductMarket regulator Ofcom has today opened a new consultation on measures that should help to encourage the rollout of "super-fast" next generation broadband services across the UK. The move includes a proposal requiring BT to offer ISPs access to its underground cable ducts and overhead telegraph poles. It also proposes a Local Loop Unbundling ( LLU ) style process for BT's own fibre optic infrastructure.
Ofcom's Proposals

* Firstly, we’re proposing that BT’s fibre lines are opened up so that rival firms – such as Sky, TalkTalk and others- can provide their own services to consumers.BT would then be able to set prices for these new wholesale products to enable them to make a fair rate of return. This arrangement would be similar to the way that BT’s copper telephone network was opened to rival phone and broadband services ( LLU ).

* Secondly, we’re proposing that BT offers rivals access to its underground ducts and overhead telegraph poles. This would allow other ISPs to build their own fibre networks more cost effectively. Ofcom’s initial conclusion is that broadband competition is effective in large parts of the country and for over 70% of the population there will be no regulations applied.
However the regulator would seek to retain locally specific price controls for existing services in the least competitive areas, where consumers only have access to copper-based broadband products from BT (e.g. up to 8Mbps ADSL / 24Mbps ADSL2+ , around 14% of UK premises). The goal would be to protect consumers against excessive prices, though many ISPs already charge £5 to £10 extra per month for comparable non-LLU products in areas of low competition.

Ofcom also brings us one step closer to a new definition of what "super-fast" broadband should actually mean. They state that such services use "fibre optic cable" and offer "speeds up to ten times the level of today’s broadband services". However that last sentence is extremely variable depending on what your basis for "today's broadband" is (e.g. up to 8Mbps is the most common product but real-world performance is more like 4Mbps+).

Ofcom’s Chief Executive, Ed Richards, said:

"Super-fast broadband is starting to be a reality in the UK, with very significant advances in recent months in the speeds some providers are offering. Ofcom’s proposed regulations provide a framework for continued investment, to deliver further roll-out, competition and innovation for consumers."

The new unbundling ( LLU ) process for BT's fibre optic lines, such as BT's FTTC (up to 40Mbps) and FTTP (up to 100Mbps) technologies, would actually be better described as Virtual Unbundling (vLLU?). It would allow competitors to have access via a dedicated virtual link over fibre lines laid by BT.

Elsewhere the plans to open BT's ducts for use by rivals will no doubt be warmly greeted. A recent Ofcom survey of BT's duct network indicated that there may be a significant amount of unoccupied space, with up to 40% or 50% having room for new cables in some locations. This also goes for ducts closer to homes and businesses.

A related study found plenty of potential capacity for additional wires to be added onto BT's telegraph poles. However Ofcom admits that availability is highly variable across the country and the practicalities of using BT's ducts and poles have yet to be worked through.

Similarly BT itself has said that it would only open its ducts if rivals agreed to do the same, though BT's main rival Virgin Media has already proven resistant to the idea. Suffice to say that the consultation will be a difficult one and its outcome could easily be impacted by the forthcoming general election. The related consultations are open until 1st June 2010.
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