BT should set its own wholesale prices for broadband in an
effort to speed up investment in optical fibre networks,
the telecoms watchdog said today.
CEO Ed Richards said there was enough competition from
interested companies and technologies to let the broadband market
discipline BT. Ofcom will also encourage network operators to share
investment risk by partnering with each other.
Richards, announcing a formal consultation on the proposals,
said a number of new players were keen to enter the market, but did
not say who they were because of commercial confidentiality.
In January, Virgin Media announced it would roll-out a 50Mbit/s
fibre network that would bring high-speed newtwork access to
about 50% of UK homes by 2010.
In August,
BT said it would spend £1.5bn to provide up to 2Mbit/s links to
10 million UK homes. Mobile network operators are already offering
speeds of up to 384Kbit/s on cellphones.
Last week Francesco Caio, who
reported to government on barriers to investment in broadband
networks, said 80% of the costs of rolling out a fibre-based
network were civil engineering costs. If competitors were allowed
to share BT's ducts, cabinets and exchanges, their cost could be
cut dramatically.
Caio also said that Ofcom might have to revise completely the
rules that govern connections between networks. Richards said he
did not think a radical overhaul was needed.
Richards said Ofcom wanted to ensure customers were protected
and that regulations encouraged competition. "These are not
mutually exclusive goals," he said.
He said Ofcom would decide at Christmas whether it would make BT
share infrastructure such as its cable ducts and telephone poles
with competitors. Others might be interested in sharing logical
infrastructure. He said the last time Ofcom had asked communication
service providers if they wanted such access, no one came
forward.
Request for feedback
Ofcom wants
feedback from the communications industry on its proposals,
which it hopes will encourage investment in communications networks
that could provide speeds up to 100Mbit/s.
The proposals cover five broad areas:
• Standards for wholesale communications products and
services
• Pricing freedom where there is effective competition
• Infrastructure-based competition
• Transition arrangements while network operators build fibre
networks
• How Ofcom will work in future with the government and the
European Commission on next generation networks.
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