Ofcom has today released its strategic review into digital communications in the UK, specifically relating to BT’s Openreach, which maintains the UK’s largest phone and broadband network.
Ofcom has told BT to open up the network so that competitors can connect fibre to homes and offices and announced a reform of Openreach in order to “better serve UK consumers and businesses.”
As you would expect, various industry experts have been quick to offer their thoughts on the news.
Richard Neudegg, Head of Regulation at uSwitch.com:
“An Ofcom review into Openreach’s future is much needed. Under scrutiny is its quality of service, incentive to invest in the UK’s broadband network and how to open up more of its infrastructure to other providers – all questions that require a thoughtful resolution.
“By attempting a repeat of the tactics used in its decade-old Strategic Review and leaving open referring BT to a competition authority – which could separate out what is now Openreach from the rest of BT – Ofcom is clearly hoping to force significant change on how Openreach operates within BT Group. But this will not happen overnight.
“While important, it could create a convenient distraction for the industry, and we urge Ofcom not to lose sight of the other issues considered in its review – especially when there are genuine threats to consumer engagement and competition which must be tackled.”
Andrew Ferguson, editor of thinkbroadband.com:
“The Ofcom report does not use the full nuclear option of creating Openreach PLC but does call for Openreach to consult more with industry on strategy and investment. Whether this will be enough assuage Sky, TalkTalk and others only time will tell.
“The big change for the public is that compensation due to faults is to be made automatic, thus increasing the incentive for Openreach to avoid having faults occur in the first place, but there will remain questions over how this trickles down to consumers, particularly since there can be several companies between an end-user and Openreach.
“For broadband providers looking to create their own network there is good news and while duct sharing via previous PIA schemes has been possible, making it work in practice has always been difficult so hopefully this new push for duct and pole sharing will remove the barriers that PIA did not resolve.”
Alastair Masson, Client Partner, NTT Data UK:
“Ofcom’s digital communications review is little more than a list of low impact measures to stimulate high-cost competition, rather than tackling the issue of Openreach and BT’s influence on the wider market. Not only does it neglect to address the imminent competition decision on Three’s takeover of O2, it also misses a huge opportunity to move away from the stovepiped view of communications too often used in the UK.
“The industry is in a state of flux. BT has been urged to “open up” its cable network and telegraph poles despite already doing this through its Duct and Pole sharing initiative. All while remaining tied to Openreach. Meanwhile competitors wait in the wings for clarity on whether BT’s market dominance will actually be restricted, holding back potential investment and market competition as a result.
“If the UK is to continue offering some of the lowest prices for broadband in the world, this leaves little room for improvement unless a minimum degree of investment is mandated. We must address some of the ‘elephants in the room’ plaguing the communications ecosystem. High speed broadband should not just be offered by industry giants, BT and Virgin Media, smaller operators should provide it too. They should also be able to do it without having to commit to unnecessary physical infrastructure rollouts. Today’s developments, and the continued avoidance of the Openreach issue, make Ofcom’s review a moot point.”
Greg Mesch, CEO of CityFibre:
“CityFibre welcomes the recommendations published today by Ofcom following its Strategic Review of Digital Communications. The report’s conclusions are clear – that to meet the UK’s current and future digital communication needs, and enable widespread availability of competing fibre to the premises networks, a strategic shift to support large-scale investment in end-to-end fibre is required.
To accelerate this, Ofcom recommends the promotion of investment and competition, and provisions such as the assurance of meaningful access to BT’s physical infrastructure. The conclusions in today’s report will considerably strengthen CityFibre’s capability to drive forward an alternative fibre future for Britain.”
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