HomeInsightsOfcom consults on initial views on how to define geographic markets from 2021


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Ofcom says that by spring 2021, it plans to have regulation in place that varies by geographic area. To promote greater certainty for investors, this new regulation will be in place for at least five years. It will replace Ofcom’s Business Connectivity Market Review and Wholesale Local Access Review.

In the coming years, Ofcom expects to see significant investment in new, competing fibre networks, but this investment and competition will vary by geography. Therefore, Ofcom says that it intends to take a “flexible approach to regulation”, reflecting how many different competing fibre companies are present in a particular geographic area.

Ofcom’s initial thinking is as follows:

  • in competitive areas, where there are at least two existing networks in addition to Openreach, Ofcom would consider whether these alternative networks make those areas effectively competitive. Where this is the case, it would deregulate;
  • in potentially competitive areas, where either: (i) at least one alternative network is already present; (ii) an alternative network provider has announced plans to build in the area; or (iii) Ofcom considers there is potential for entry, Ofcom’s focus will be on promoting investment and competitive entry; and
  • in non-competitive areas, where there are no alternative networks and where future network deployment at scale is unlikely, Ofcom’s objectives are to encourage investment by Openreach while protecting consumers from high prices.

Ofcom intends to gather data and deployment plans from operators to map existing and potential future networks. It proposes using a number of criteria to determine areas of the UK where network rollout may be economically viable.

Ofcom’s initial approach to remedies will be set out in spring 2019. By autumn 2019, it plans to consult on a full set of market proposals, including market definition, market power and remedies.

The current consultation is open until 26 February 2018. To access the proposals, click here.