Ofcom plans new guidelines to bolster investment in fibre networks

UK telecom regulator Ofcom today announced a new consultation paper in order to bolster investment in fibre networks.
CityFiber broadband investment UKBroadband companies are planning to cover six million premises with full fibre by 2020. The UK Government last year said it aims is to connect 15 million premises by fiber network by 2025.

Ofcom’s latest proposals are designed to support investment in fibre by Openreach, Virgin Media and new entrant networks such as CityFibre, Hyperoptic and Gigaclear. The new proposals allow all investors in the telecom industry to make a fair return on new fibre networks.

Ofcom aims for setting regulated prices only for entry-level superfast services and allowing all operators including Openreach freedom to set prices for higher speed and higher quality fibre-based services.

Ofcom targets for maintaining stable prices for Openreach’s regulated entry-level superfast broadband (up to 40Mbit/s) and high-capacity leased lines based on costs for new entrants and not the costs of the scale incumbent operator, BT.

Ofcom said it is injecting more margin into the network layer to allow sufficient margins for all network investors.

These proposals will support network competition and investment in more urban areas of the UK. The proposals support retail competition while maintaining the incentives for Openreach to invest in full fibre by allowing Openreach to spread the costs of investment in fibre across a wider group of consumers.

Ofcom is proposing cost-based access to Openreach’s dark fibre in areas, including a return on Openreach’s investment. Dark fibre is where Openreach gives competitors physical access to its fibre cables, allowing them to take direct control of the connection. Ofcom said this approach will allow effective supply of mobile backhaul capacity and business connections.

Ofcom is proposing a framework to help Openreach move customers from its copper network to fibre efficiently and quickly by allowing for regulated products to move from the copper to fibre networks to ensure protection for consumers.

Ofcom will be allowing flexibility for Openreach in setting copper-based broadband product pricing to allow a managed transition from copper to fibre services.

The proposals will give the certainty for alternative networks, Openreach and Virgin Media to deliver full fibre to homes, businesses and future 5G networks.

Ofcom on Friday said it will be moving away from cost-based charge controls of copper-based services, giving retail broadband providers, such as Sky, a stronger incentive to switch to an alternative supplier, enter partnerships with such suppliers, or build their own networks.

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