Ofcom eases price controls on Openreach broadband

Ofcom has proposed new rules mean to boost full-fibre broadband

Ofcom has proposed new rules mean to boost full-fibre broadband

Ofcom wants the rollout of ultra-fast broadband to go smoothly, so it's gone and published a number of measures created to make it cheaper for internet providers to install the necessary infrastructure.

In the meantime, it said it wanted to ensure that Openreach installed new lines on its existing network, and fixed faults, more quickly.

It could cut the upfront costs of laying fibre cables by around 50%, from £500 per home to £250.

Ofcom's measures will be instrumental in supporting full fibre roll-out by promoting competition and ensuring widespread availability of these services. As such it will cut the wholesale price that Openreach can charge telecoms companies for its basic superfast broadband with speeds of up to 40 Mbps, and upload speeds of 10Mbps.

Alex Neill, Which? managing director of home products and services, said: 'It's unacceptable that the United Kingdom is lagging so far behind other countries on the fastest connections, with only 3% of British homes having access to full-fibre, compared with nearly 80% in Spain. But new rules announced by watchdog Ofcom mean that more of the United Kingdom may get access to faster broadband connections.

The idea being that Ofcom wants to protect consumers against high prices, and help improve competition in areas that wouldn't normally be able to benefit from a lot of choice - like the countryside. To stop BT from stifling new investment by rivals, it will not be allowed to make targeted wholesale price reductions in areas where rivals are starting to build new networks.

BT's network division, Openreach - recently pledged to bring high-speed broadband to three million United Kingdom premises by the end of 2020 as part of its newly launched "fibre first" programme (see Openreach fibre first to "fire the starting pistol" on major infrastructure upgrade).

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TalkTalk was also planning to cover three million premises with full fibre.

The regulator has also published a list of measures Openreach will need to conform to including; completing at least 88 per cent of fault repairs within one or two working days of being notified, up from 80 per cent now and completing at least 97 per cent of repairs within seven working days.

These new requirements must be met by 2020/21. The decision represents a partial reprieve for Openreach, which had been in line for a stricter £11.23 price control.

'We especially welcome Ofcom's decision to bring down the wholesale price for entry-level fibre broadband by around £20 a year. The telco anticipates further year-on-year impacts in each of the successive two financial years in the range of low to mid tens of millions of pounds.

'In particular, we will need to look carefully at geographic pricing restrictions and need to define future fair bet conditions in more detail. We have long argued that Openreach has no incentive to invest in the full fibre broadband that Britain needs when it could make excess profits by overcharging for copper-based services.

It is hoped the move by Ofcom will encourage competing providers to invest in their own networks, rather than buying the wholesale service from BT.

"Ministers need to take charge and ensure the recently created Business Connectivity Forum delivers tangible progress on full-fibre rollout to businesses as a priority, otherwise in five years the United Kingdom may find itself the best place to watch Netflix at home, but the worst place for businesses to take advantage of the 4th industrial revolution with all the productivity benefits that offers".

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