Ofcom primes broadband afterburner
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Ofcom has blown the horn on the long march towards a modern internet infrastructure for the UK. Today marks the start of its powwow on who should pay for the next generation telecoms network that regulators and government believe is essential to our economic and social future.
A consultation document (pdf) released by the watchdog calls for opinions from all shades of industry and the public on how regulations should be rejigged to foster fibre rollout.
The process is aimed at helping Blighty compete with the 50 and 100Mbit/s downloads enjoyed by business and consumers in South Korea, parts of the US, and forward-thinking regions of the EU.
The 115-page consultation document boils down to five questions:
When do you consider it would be timely and efficient for next generation access investment to take place in the UK?
Do you agree with the principles outlined for regulating next generation access?
How should Ofcom reflect risk in regulated access terms?
Do you agree with the need for both passive and active access remedies to promote competition?
Do you consider there to be a role of direct regulatory or public policy intervention to create artificial incentives for earlier investment in next generation access?
Ofcom chief Ed Richards said: "Investment in next generation access will represent a substantial commercial risk and the market should decide where and when it will be made. We want to ensure there are no barriers to investment."
BT has led cries that the UK regulatory framework discourages replacing the copper last mile of its network with new fibre. It has pointed to a deal between Deutsche Telekom and the German government which tried to give the telco exclusive rights to subsidised superfast infrastructure.
BT says it does not advocate such a bargain here, and it anyway attracted strong criticism from the European Commission. Regulator BNetzA has since intervened to open the market.
Richards continued: "But we also want to ensure that the benefits of competition which consumers have enjoyed with current generation broadband can also be achieved as we move to higher speed next generation access."
EU regulators have lauded the move to open up UK broadband with the creation of BT Wholesale and LLU market early in the decade as an example for other nations to follow. Some next generation network advocates worry that it now means it is not worth anybody's while to spend the billions needed to dig up roads for fibre. The unspoken aim for Ofcom is to design a new scheme that will draw as much cash from broadband providers as possible.
It's conceivable that taxpayers will bear some cost, as competitiveness minister Stephen Timms signalled last week, but in the run up to the Ofcom consultation, BT softened its rhetoric on investment. There's everything to play for.
The consultation closes 5 December. There's details of how to respond here. ®
COMMENTS
Back to the 80s...
Before BT was privatised, we (the taxpayer, via government) dictated what development of the telecoms network took place - or rather we didn't and it was very slow and unresponsive. Privatisation and competition were supposed to deliver choice, service and investment, which they did to a degree, but mainly in short-term price arbitrage, and you cannot say that 25 years on we have a thriving and competitive marketplace - just BT, the mobile operators and a few struggling and ever-consolidating fixed line operators.
Unfortunately the strategic asset, which is BT's local loop and duct network, was given away at BT's privatisation and we have been dancing around the handbags since then, trying to get it back. Openreach is just another fig-leaf in the long process of prising BT's fingers off the local loop.
There is no incentive for BT to invest in fibre in the short-term oriented market which pervades the industry. The only way to get fibre investment is to remove the local access network from BT's ownership and to place it in a form of common ownership - perhaps like that suggested below. Yes taxpayers will pay, but perhaps we're just returning the money we took out of the industry in selling our BT shares....
OutSource
Why dont the goverment stump up the cost with our tax money build the infrustructure of the last mile as a public owned service and rent it out to the ISP at a cost (include profit to pay back the tax).
Then do what everyone else does and outsource the maintaince of the last mile to a company probably BT to maintain and enhance the service.
Or they could rent the who line to BT who can then sell it on to their punters with there profit on top!
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