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BT Superfast Broadband - OFCOM Speaks
03 Mar 2009 | 08.31 Europe/London
OFCOM have today released a statement on "Delivering super-fast broadband in the UK" which focuses on the regulatory regime that will apply to BT as they "currently hold a position of significant market power in relation to the relevant markets at present". Specifically it addresses BT's Fibre to the Cabinet (FTTC) plans.
The 90 page document is the result of a public consultation and has been widely trailed in the media in the last few days. In essence it sets out an approach that will allow private sector investment for sensible returns reflecting the risk inherent in building a new network. Whether BT and OFCOM can agree on the level of risk, or indeed on the cost of money, remains to be seen.
BT's FTTC proposals involve electronics installed in or close to street cabinets, reducing the length of twisted pair copper wire to less than 1km in most cases. BT and OFCOM envisage providing competitive access through "active products" where competing providers obtain access to end users via BT's electronics and fibre. In other words FTTC would see the death of LLU in its current form as it is unlikely to be economic for a competitor to duplicate the kerbside electronics. To this end Openreach have a "Generic Ethernet Access" product which would arrange for IP traffic to pass uncontended from an end user over FTTC direct to a competing provider's network.
The current regulatory regime is built around requiring Openreach to offer competitors passive products, for example direct access to the local loop. To reflect the move to active products OFCOM will be consulting on a new approach:
[ OFCOM statement ]
The 90 page document is the result of a public consultation and has been widely trailed in the media in the last few days. In essence it sets out an approach that will allow private sector investment for sensible returns reflecting the risk inherent in building a new network. Whether BT and OFCOM can agree on the level of risk, or indeed on the cost of money, remains to be seen.
BT's FTTC proposals involve electronics installed in or close to street cabinets, reducing the length of twisted pair copper wire to less than 1km in most cases. BT and OFCOM envisage providing competitive access through "active products" where competing providers obtain access to end users via BT's electronics and fibre. In other words FTTC would see the death of LLU in its current form as it is unlikely to be economic for a competitor to duplicate the kerbside electronics. To this end Openreach have a "Generic Ethernet Access" product which would arrange for IP traffic to pass uncontended from an end user over FTTC direct to a competing provider's network.
The current regulatory regime is built around requiring Openreach to offer competitors passive products, for example direct access to the local loop. To reflect the move to active products OFCOM will be consulting on a new approach:
In parallel to this statement we are therefore consulting on a proposed variation to BT’s Undertakings. The proposed Variation would allow Openreach to control and operate the electronic equipment required to deliver fibre-to-the-cabinet wholesale products. Subject to the outcome of the consultation, this variation will require Openreach to provide active wholesale products to all service providers on an Equivalence of Inputs basis. BT also proposes a number of commitments around the provision of fibre-to-the-cabinet passive products which are designed to meet the needs of service providers who may wish to compete at this level.
[ OFCOM statement ]