Both sides agree that full fibre must be a fair bet but BT wants promises made written in ink
Negotiations between Ofcom and fibre builders will go down to the wire: Regulation featured prominently in BT’s Q3 2020/21 Trading Update last week, not least because Ofcom will imminently publish its Wholesale Fixed Telecoms Market Review, which will set out the regulatory environment for broadband in the UK for the next 5 years (until 31 March 2026). The review coincides with a significant expansion of BT’s fibre footprint and the sizable investment that it requires and so all eyes are on what will be concluded following a lengthy period of consultation.
A glowing report card for Ofcom: It’s fair to say BT seem broadly happy with the direction Ofcom are going in towards meeting the so called ‘fibre enablers’. The one that has received the most attention is around ‘fair bet’. In short, BT wants favourable comments made by Dame Melanie Dawes (Ofcom’s CEO) during a recent speech written into the market review – essentially a period of certainty on no cost-based pricing for at least two market review periods. Philip Jansen (BT’s Chief Executive) said he won't be at the company in 10 years time, so wants his successor to have a hard copy document they can refer back to in future dealings with Ofcom – not just generic statements of intent. Given how crucial this has been throughout, and how even BT’s fiercest critics welcome any offer of long-term regulatory certainty, it seems likely that an acceptable compromise will be reached.
Room for improvement for Government: BT is less impressed with progress made by the Government – in particular on removing business rates for fibre, on which they (and most of the industry) would like to see a period of 20 years rate relief. The prospect of things going BT’s way here seem less certain, at least for now. Firstly given COVID-19 and the desire of the Treasury to keep the money coming in, but secondly because remarks made by Matt Warman (Minister for Digital Infrastructure), seem to suggest he doesn't seem particularly interested in fighting the industry's side on this one given responsibility sits outside his remit and a wider business rates review is supposed to be taking place. It probably doesn’t help either that the Government recently scaled back its full fibre ambitions, the urgency of which had been a useful bargaining chip.
