Ofcom gives BT green light to next-gen broadband

Ofcom will allow BT to set its own pricing for wholesale access to its super-fast broadband to help recoup its £1.5 billion investment.

Ofcom has said it will allow telecos such as BT to charge whatever they'd like for wholesale super-fast broadband services, in order to allow such firms the chance to recoup the significant investment the upgraded networks will require.

Ed Richards, Ofcom's chief executive, said in a statement: "Our message today is clear: there are no regulatory barriers in the way of investment in super-fast broadband; we want to promote investment but also ensure that there is fair and effective competition for the future."

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The statement means BT will be able to set its own prices for wholesale access to its new fibre networks, which internet service providers and others buy in order to offer products to consumers and businesses. Ofcom said it was looking to ensure pricing freedom, solid rates of return on investments and efficient networks, while promoting competition.

BT's chief executive Ian Livingston said in a statement that the Ofcom announcement gave the green light for his firm's 1.5 billion investment into bringing super-fast broadband to 40 per cent of UK homes in the next three years.

"The stage is now set for a wide variety of players, of all different shapes and sizes, to do their bit in providing consumers with a choice for superfast and innovative services," he said. "Now it's all about delivery."

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Livingston said BT's Openreach wholesaling arm is already signing up providers, and will be able to offer 30,000 customers with fibre service in the next few months. By January, another 500,000 homes will have access to speedy broadband, too. "At our pilot at Ebbsfleet Valley, consumers are, today, enjoying speeds of up to 100 Mbp/s the fastest available to consumers anywhere in the UK, and comparable with anywhere in the world," Livingston claimed.

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While Virgin Media is also rolling out a fibre network for super-fast access, Ofcom said its statement specifically referred to cable network upgrades, such as what BT is rolling out.

Aside from the pricing issue, Ofcom said it is also looking into whether private investment is enough to spur super-fast broadband development, or whether "further action" is required.

The watchdog is also looking into developing industry standards for wholesale products and the use of underground duct infrastructure as an option for network rollouts. Indeed, an Ofcom survey suggested current telecoms ducts have between 40 to 50 per cent of their space left for new cables.

Click here to find out if businesses really need super-fast broadband.

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