Ofcom sets ambition for fully fibred broadband Britain - now industry must respond

Ofcom’s much-anticipated review of the communications market is a smart and pragmatic attempt by the regulator to accelerate fibre-to-the premises (FTTP) broadband across the UK – but as ever with such a wide-ranging exercise, the devil will be in the detail.

The essence of Ofcom’s recommendations are twofold.

First, BT has been given a last chance to prove that its Openreach division can operate as if it were a fully independent company while still part of the BT Group. If it fails to do so, Ofcom will pursue the nuclear option and refer BT to the competitions watchdog.

Second, that the regulator is happy for BT to sweat its copper assets in the “last mile” connections to homes and businesses if the telco chooses to do so, but it is unwilling to wait for BT to create a market for FTTP.

It was reassuring to hear Ofcom CEO Sharon White on the BBC saying we should compare our broadband infrastructure to world leaders like Japan or South Korea, and not to laggards in the EU as the government and BT like to do. White has set the ambition for a fully fibred digital Britain over the next 10 years – it’s now up to the communications industry to make it happen.

But many questions remain, of course.

The core of creating an FTTP broadband market lies in allowing other ISPs to use BT’s poles and ducts to lay their own fibre to homes – something they have been allowed to do since 2011. Nobody has taken up that offer so far, complaining early on that BT’s terms and conditions made the scheme unworkable.

Ofcom has to find a way to make access to ducts and poles cost-effective, straightforward and transparent – something BT will gently resist for as long as it can.

The hope is that fibre investment by BT’s rivals will spur BT/Openreach to respond – or will alternatively make Openreach redundant if BT sticks firmly to its copper guns.

While many observers will focus on BT’s unwillingness to further the structural and operational separation of Openreach, Ofcom has cleverly put pressure on the likes of Sky, Vodafone and TalkTalk to put their money behind their complaints about Openreach.

If rival ISPs truly believe that BT’s lack of FTTP investment is the reason their ambitions for broadband are thwarted, Ofcom is giving them an opportunity to go their own way and ignore BT. If they do not, then their arguments about splitting off Openreach lose all credibility.

The Ofcom review guarantees nothing. If ISPs don’t invest in their own fibre, we’re stuck with Openreach and copper cables. But the watchdog has made a positive statement that Britain needs a fully fibred digital infrastructure within the next 10 years, and it has laid down a challenge to which the industry – and not just BT – must respond.