Ofcom Publishes New Rules To Deliver Full Fibre Broadband

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The telecoms regulator claimed its plans will slash the cost of full-fibre broadband network builds by up to 50% and help the industry hit its own targets of connecting up to 20% of United Kingdom premises to FTTP broadband by 2020 - the current figure stands at around 3%.

But rollouts of FTTP have been patchy at best, and only 3 percent of United Kingdom homes can now access a FTTP connection. "Full fibre will also underpin exciting technology like remote healthcare diagnostics, 5G mobile and connected devices", said Ofcom's competition group director Jonathan Oxley.

However, Ofcom said it will roll out new stricter rules forcing BT's infrastructure arm to "repair faults and install new broadband lines more quickly".

It hopes that making it easier for rivals to access the former monopoly's telegraph poles and underground tunnels will speed up the delivery of new networks at cheaper prices.

And Ofcom said that the new measures will mean that more United Kingdom homes will benefit from ultrafast internet speeds, and that its draft decisions "will halve the upfront cost of building "full-fibre" broadband networks'".

Openreach will also be required to fix faulty infrastructure and clear blocked tunnels where necessary for other providers to access them.

"The measures we've set out today will support the growing number of companies who have already announced plans to build full-fibre networks, and open the way for even more ambitious investment around the United Kingdom", added Oxley.

It means fibre could be installed in some streets in a matter of hours, while the upfront costs could be slashed by up to 50% from around £500 per home to £250.

Full-fibre broadband, which involves the connection of glass fibre-optic cables right to a customer's premises - is many times faster, and around five times more reliable, than the existing "fibre" internet services offered by service providers.

It added that Openreach will not be permitted to make targeted wholesale price reductions in areas where others are building FTTP networks.

"Competing providers will invest in building their own networks only if this is more attractive than buying wholesale services from BT", Ofcom said in its statement.

In addition Openreach will also be responsible for repairing infrastructure and clearing any blocked tunnels so that they're accessible, and will be restricted in how much it can charge telecoms companies for its basic superfast broadband package.

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In March 2017, Ofcom proposed to set the monthly charge for Openreach's "40/10" Mbit/s broadband package by 2021 at £11.23.

Ofcom said its plans could mean bolstering full fibre coverage across the United Kingdom from 3% today to 20% by 2020.

It said that in the future, Openreach would be required to complete at least 88% of fault repairs within one or two working days of being notified, up from 80% today.

Additionally, BT will be banned from reducing its wholesale prices in areas where rival networks are starting to lay infrastructure.

Ofcom's measures have been submitted to the European Commission for comment, after which it will publish a final statement next month.

BT said the price cap would reduce Openreach's revenue and profit in its 2018/19 financial year by 80-120 million pounds, and have further impacts in the following two years in the range of low to mid tens of millions of pounds.

These new requirements must be met by 2020/21.

And it welcomed Ofcom statement that gives it "certainty on the pricing of key products for the next three years", but did admit it will have an adverse financial impact going forward.

Further, it said the net impact it would have on the overall group would depend on dynamics in the retail market.

In BT's latest financial results for the three months to December, Openreach saw revenues flat at £1.29 billion and operating profit down 6.7 percent at £305 million as copper products declined.

Addressing the restriction on varying its wholesale prices, BT said it was "considering the implications for full and fair competition".

Richard Neudegg, head of regulation at Uswitch said: "This focus on future investment alongside strong competition is critical".

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