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August 3, 2020
Ofcom has published updated proposals to help bring faster, more reliable broadband to rural areas, in light of BT’s new commitment to extend its fibre network to a further 3.2 million rural properties. Ofcom’s proposals are part of its review of wholesale telecoms for residential and business services in the UK. This sets out how Ofcom will regulate BT for the period from April 2021 to March 2026.
As part of its review, Ofcom set out proposals in January 2020 on how it plans to create the best possible conditions for companies to invest in full-fibre broadband so customers in all parts of the UK can enjoy the benefits it provides.
In more sparsely populated rural areas, where there is limited prospect of multiple networks being built, Ofcom says that it plans to incentivise investment by BT’s network arm, Openreach, the only operator with a large-scale rural network.
In January, Ofcom said that if BT were to provide a firm commitment to build fibre in these parts of the country, it would consider allowing it to include these investment costs in its prices upfront. If not, Ofcom would only allow it to recover these costs after it lays new fibre. Openreach has since committed to build fibre to at least 3.2 million rural properties. Therefore, Ofcom is consulting on revised proposals on how it will set Openreach’s wholesale prices for these areas. If Openreach does not meet this commitment, Ofcom can set lower wholesale prices in future to reflect this.
Ofcom explains that public funding will also be vital in connecting rural areas. The UK Government is planning to invest £5 billion to reach the most challenging 20% of the UK and Ofcom is working closely with Government on its plans for this.
The consultation closes on 16 September 2020, and Ofcom intends to publish the final decisions on its wholesale telecoms review before the new regulation takes effect in April 2021. To access the proposals, click here.