LONDON, March 17 (Reuters) – Britain said on Tuesday it would regulate BT Openreach’s national broadband network for another five years, with a price cap on a wider range of speeds, to drive competition and extend fibre connections to the final fifth of the country’s premises.
The competitive framework put in place in 2021 by watchdog Ofcom has resulted in nearly eight in 10 homes having access to full-fibre broadband, up from less than a quarter five years ago.
The Ofcom measure encouraged Openreach to invest in fibre by reducing regulation for faster connections, while also making it easier for competitors to use the former monopoly provider’s infrastructure, such as telegraph poles.
It resulted in BT investing 15 billion pounds ($20 billion) in its fibre network and the emergence of many smaller competitors, called “altnets”.
Ofcom said around three-quarters of premises had a choice of two providers – generally Openreach and Virgin Media or an altnet – but Openreach still retained significant market power and it could not remove regulation entirely.
It said it would cap the nominal price that Openreach can charge retail providers like Vodafone or Sky – who lease its infrastructure – for download speeds up to 80Mbit/s, rather than 40Mbit/s at present.
The prices of higher-speed products would remain unregulated, so providers had an incentive to invest in fast networks, it said.
Openreach said it would examine the review in depth.
“This market is evolving rapidly and, with competition more intense than ever, it’s really important that regulation keeps pace with that change,” head of regulation Mark Shurmer said.
Rajiv Datta, chief executive of nexfibre, a joint venture of InfraVia Capital and Virgin Media O2’s owners Liberty Global and Telefonica, said Ofcom was right to stay the course.
“This is not the moment to deregulate the incumbent; what’s needed is steady oversight and firm enforcement of the framework already in place,” he said.
($1 = 0.7501 pounds)
(Reporting by Paul Sandle; Editing by Kate Holton and Emelia Sithole-Matarise)
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