Ofcom proposes updated regulation in response to Openreach’s FTTP pledge

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Openreach, the whole access division of BT, has committed to expand fibre to the premises (FTTP) to 3.2 million more rural buildings.

Regulator Ofcom’s revised regulation will allow Openreach to include the investment costs it incurs in its prices upfront.

In January, Ofcom put forward a new approach to pricing called Wholesale Local Access for the UK except the Yorkshire city of Hull, which has its own local fixed operator, KCOM Group.

No competition

For areas where competitive networks are less financially viable, known as Geographic Area 3 where only Openreach provides fixed connectivity, Ofcom proposed cost-based prices meaning Openreach could immediately recoup its costs and lower the investment risk.

Ofcom stressed that this could only be implemented if Openreach made a firm commitment to roll out fibre in these parts to avoid prices rising after the fibre is built out.

In May Openreach said it would increase its investment in full fibre (as opposed to fibre to the cabinet and the last part of the connection by old copper infrastructure) to reach 20 million premises by “mid to late 2020s”.

So far the total is 3 million, with the expectation this will rise to 4.5 million by next March.

More promises

In June, Openreach pledged to build out fibre without public subsidy to at least 3.2 million premises in Area 3 by the end of 2025/26, which seems to have met Ofcom’s criteria for updating regulation.

The regulator has opened a period for consultation which will end on 16 September and intends to publish a final decision regarding the Wholesale Fixed Telecoms Market Review by 31 March 2021.

Openreach today published a list of 251 locations  that are located in the 30% the landmass that is hardest to reach and to which it said it will build out FTTP over the next three years.

Clive Selley, CEO, Openreach, said. “This year we’ve all seen the importance of having a decent broadband connection and at Openreach, we’re convinced that full fibre technology can underpin the UK’s economic recovery.

We’re determined to find inventive engineering solutions and effective partnership funding models to reduce costs and enable us to connect as many communities as possible across the UK without public subsidy.”