Ofcom aims to remove roadblocks to investment in fibre with a market review covering the period 2021 – 2026, but with a nod to a longer period of certainty and stability.
Background: The Wholesale Fixed Telecoms Market Review (WFTMR) is a new five year market review combining the previous Business Connectivity Market (i.e. leased lines and Dark Fibre etc.) and the more residential focused Wholesale Local Access Market, which tended to occur every 3 years. It covers the period 1 April 2021 – 31 March 2026.
The proposals: At 936 pages, across five volumes and 23 annexes, it will take time to fully digest exactly what’s being proposed. Ofcom describe the proposals as building on the approach from the last couple of years. Certainly they look to build on the initial proposals of March 2019 but with some small targeted changes in response to input from stakeholders. At least three appear to align with what Openreach has asked for in terms of ‘regulatory enablers’ around fair bet, legacy investments and copper switch-off. Ofcom describe some aspects as ‘radical departures’ from the status quo such as the move away from rientating prices to costs, and allowing prices to go up with inflation. Overall they are designed to encourage competitors to enter the market, be pro infrastructure, and please fibre builders.
The reaction: The industry has broadly reacted in a positive way, although it will be some time before anyone has a chance to fully review the consultation. Crucially perhaps, both Openreach and BT both seem to welcome the proposals. Ofcom noted that they had listened to Openreach’s concerns about copper retirement for instance and the threshold at which regulation is removed. There are also things in the review likely to please alternative builders such as CityFibre. To help the alternative fibre builders, Ofcom say that Openreach “would be restricted from being able to offer discounts that could stifle investment by its rival.”
Next steps: It’s worth remembering these are only proposals that are subject to consultation until 1 April 2020. A regulatory decision will come in early 2021 before the current rules expire in April 2021. Between now and then Government policy around gigabit broadband is likely to develop and Ofcom have acknowledged further mini consultations should be expected on certain aspects of their proposals such as copper switch-off.
