Sunday, December 23, 2007

OFCOM | NGN Responses

OFCOM | Responses to consultation: Next Generation Networks - Future arrangements for access and interconnection

(...) Having an Open Access Infrastructure (OAI (a dark fibre network open to be
used by any service provider)) could be important to areas where there is
limited competition at a wholesale level. BT at present has SMP in the UK
when considering leased lines and Internet access backhaul services. OAI
networks can open up the wholesale competitive market, drive down the price
customers have to pay and open up the market in general to many new and
innovative services based on a number of technologies used to light the fibre

See also:

  • 26/09/07 - Intellect response to Ofcom Consultation on 'Future Broadband - Policy Approach To Next Generation Access' (pdf 33KB)

Question 5: Do you consider there to be a role of direct regulatory or public policy intervention to create artificial incentives for earlier investment in next generation access?
It seems to be very doubtful that the market alone will result in the deployment of NGAs that give full UK coverage. Also, market forces will result in deployment to the most attractive areas in advance of those offering lower returns. Also the sheer scale of the engineering project to deploy NGA technology across the UK will inevitably mean that the services are delivered to some areas later than others. So with or without some form of intervention, there will be some people who get access to NGA later, possibly very much later, than others and without intervention there will be those who never get access to NGA. The issue then is one of inclusion and the extent to which a digital divide, temporary or long term, is acceptable. This is really a policy rather than regulatory matter. However it seems reasonable to conclude that, if a digital divide is not accepted, then intervention will be needed at some point.

Ofcom | Press Release | 26|09|07 | Ofcom considers fast broadband outlook and pledges clarity for investors

Ofcom today published a consultation paper analysing the outlook for future broadband “Next Generation Access” (NGA) networks with proposals for future regulation of this new communications infrastructure.

Regulation has contributed to an effective broadband market in the UK.

Broadband access regulation is based currently on creating and supporting a competitive market capable of delivering a range of services from a variety of providers, spanning many price points and available throughout the UK.

Broadband has become a mass-market service, with providers other than BT offering services over 3 million unbundled broadband lines and Virgin Media offering a service to 50% of the country over cable. Consumers have enjoyed falling prices, rising speeds and increasingly innovative product bundles.

In general the picture for broadband take-up in the UK is good:

* over ninety-nine per cent of the UK is connected to a broadband enabled exchange;
* over half of UK households have taken up broadband;
* almost three quarters have a choice of at least two broadband (ADSL and/or cable) network providers;
* the average headline speed has doubled in a year to reach 4.6mb/s and
* broadband prices have fallen by 9% in the last twelve months.


Regulatory clarity needed to support investment in NGA

As the market evolves, a clear regulatory regime supporting its growth will be key. Its aim will be to ensure that consumers continue to enjoy all the benefits of a competitive and dynamic market and that potential investors have clarity on how their investment will be regulated.

Ofcom proposes to play its part in facilitating timely and efficient investment in very high speed broadband networks with a regulatory policy based on the same principles it established for current generation broadband. Of particular relevance are the principles to:-

* promote competition at the deepest possible point in the broadband value chain, to optimise the opportunities for innovation and sustainable competition
* optimise the scope for innovation to maximise consumer and business benefits from these new services; and
* require equivalence where operators with market power must make their network infrastructure available to their competitors on the same basis.

In addition Ofcom proposes two new principles specific to next generation access networks:-

* regulation must reflect the significant commercial investment risk associated with deployment of these networks in order to ensure incentives for investment are retained; and
* investment in these networks requires regulatory clarity. It is important that the regulatory regime remains in place for a sufficient time to allow investors the long-term clarity they need to invest with confidence.

Ofcom CEO Ed Richards said: “Next Generation Access offers tremendous new opportunities for UK business and consumers, and its potential impact on the economy is very significant.

He added: “Investment in Next Generation Access will represent a substantial commercial risk and the market should decide where and when it will be made. We want to ensure there are no barriers to investment and provide a clear regulatory environment which will help encourage investment.

“But we also want to ensure that the benefits of competition which consumers have enjoyed with current generation broadband can also be achieved as we move to higher speed next generation access.”

The consultation closes on 5 December 2007.

The full consultation is available online at

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