Ofcom consults on broadband charges for Market A areas
Ofcom has been moving towards new definitions of the broadband markets in the UK, reducing the definitions from three areas plus Hull to just two plus Hull. The reason for this is to help simplify the way price regulation operates and as such is part of the Wholesale Broadband Access Market review.
The latest development in this lengthy review is a 91 page pdf document that discusses proposed new charge controls for IPStream Connect Max and Max Premium for areas of the UK with just two or less principle operators. Anyone with an interest or sensible opinion is able until the 10th March 2014 to respond to the changes which are aimed at ensuring that BT Wholesale does not overcharge in Market A areas, and is also encouraged to continue its roll-out of WBC (ADSL2+).
Market A accounts for around 9.6% of UK premises, with a small 0.7% in a market known as the Hull area (i.e. where KC operates), Market B (a merge of the old Market 2&3 areas) is defined as areas where three or more operators are present or are forecast to be present. The market review also states that BT has Significant Market Power only in Market A areas.
The consultation does consider the fibre roll-outs, but seems to decide that due to uncertainty in take-up there is no desperate need to change the proposals to take account of this and that encouraging further roll-out of the WBC network is important. A couple of sections popped out at us:
"3.19 With regard to the take up of fibre by end users, we have considered the information provided by EE on copper to fibre conversion rates in Market A areas. We would expect conversion rates to be high in these areas, given that broadband speeds over copper (in contrast with fibre) diminish significantly with distance, and many premises in Market A are located far from the exchange.
3.21 Data from other sources suggests copper to fibre conversion rates are much lower than EE suggests. In particular, Ofcom’s Infrastructure Report states that around 8% of all broadband connections in the UK currently operate at less than 2Mbit/s, but only 3% of premises in the UK with speeds below 2Mbit/s do not have SFBB currently available in their area. In other words, many consumers that currently have sub-2Mbit/s broadband also have fibre available, but have not made the switch. While there may be a number of reasons for why these consumers have not taken up fibre (for example, they may have yet to roll off existing contracts, or may not know that fibre is available in their area), the Infrastructure Report shows it is uncertain that customers in Market A will always switch to fibre if available."Extracts from Ofcom Wholesale Broadband Access Market review
In reference to 3.19 we hope that Ofcom has not forgotten the way that FTTC fibre based services drop off over distance too. This section probably was meant to highlight that for many people the cabinet to home distance is short enough to get a significant speed boost.
With regards to the 2 Mbps, the figures do correlate with previous Ofcom reports/data but with the wide variation in speeds across postcodes and that SFBB is not guaranteed to a property just because another property can access it that the conclusion over uncertainty on take-up may be misplaced.
There is lots of interesting snippets from operators on expected demand for fibre based services, but the redaction throughout the document means we can only guess at the dreams of EE, Sky and TalkTalk in this area.