Ofcom starts process on defining areas of the UK for full fibre competitiveness
Yet another Ofcom consultation, but an important one as it relates to full fibre and if done right it might help to firm the 2025 50% FTTP ambition, which currently looks possible but FTTP operators are only talking ambitions and not firm building targets that far ahead just yet.
In the coming years, we expect to see significant investment in new, competing fibre networks. But investment and competition will vary by geography. So we intend to take a flexible approach to regulation, reflecting how many different competing fibre companies are present in a particular geographic area.
Our initial thinking on how our competition assessments and regulation may vary by geography from 2021 are as follows:
- In competitive areas where there are at least two existing networks in addition to Openreach, we would consider whether these alternative networks make those areas effectively competitive. Where this is the case, we would deregulate.
- In potentially competitive areas where there is 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) we consider there is potential for entry, our focus will be on promoting investment and competitive entry.
- In non-competitive areas where there are no alternative networks and where future network deployment at scale is unlikely, our objectives are to encourage investment by Openreach while protecting consumers from high prices.
We will gather data and deployment plans from operators to map existing and potential future networks. We propose to use a number of criteria to determine areas of the UK where network rollout may be economically viable.Initial outline for three different zones for FTTP regulation in the UK
The full documents and links for responding are on the Ofcom website.
Defining the markets makes things easier for a regulator but we have worries that in the competitive areas, what made it non viable for provider A to deliver to a street or collection of premises probably applies to provider B and provider C. So while competive areas will be statistically looking good each area has the potential to be sub divided further at the other end of the scale there is potential also for some areas to have ducts or poles filled up by alternative providers to Openreach and until we have agreement on removing copper from the local loop full ducting may start to be a limitation on roll-outs if the PIA rules can deliver at scale.
The third area where only Openreach is ever expected to invest and Ofcom applying price controls to protect consumers from high prices may have side effects such as, a slower FTTP roll-out in these areas and potentially a hold out for some public money in the 2027 to 2033 period if the 100% full fibre ambition is something politicians are still keen on. Balancing pricing between areas where services cost more to deliver alongside more densely populated areas is an exceptionally difficult balancing act.
These new geographic variations on regulation are due in 2021 and are expected to be in place for at least five years, but we would urge Ofcom to consider setting some trigger levels, i.e. if the delivery matches the models and data providers provide as part of the consulation that regulation would remain unchanged for a lot longer i.e. provide a more certain landscape for investors, both for Openreach, its competitors and community led projects.