New Ofcom rules to boost full-fibre broadband

New Ofcom rules to boost full-fibre broadband

23 February 2018

Upfront cost of building ultrafast broadband networks set to halve

Pricing decisions to encourage investment in full-fibre networks

New measures to force faster repairs and installations by Openreach

More UK homes are set to benefit from ultrafast internet speeds, after a draft decision by Ofcom today that will halve the upfront cost of building full-fibre' broadband networks.

Full-fibre broadband is many times faster and around five times more reliable than today's superfast internet services. But it is available to just 3% of UK homes and offices.

So Ofcom has today published [1] a package of measures to further increase investment in this future-proof form of broadband, following a range of recent commitments by broadband companies that could see up to six million premises covered by full fibre by 2020.

Cheaper, better, faster networks

BT must make its telegraph poles and underground tunnels open to rival providers, making it quicker and easier for them to build their own full-fibre networks directly to households around the UK.

This measure, which is already being used by providers such as Virgin Media and CityFibre, will fundamentally change the business case for building new networks. It could cut the upfront costs of laying fibre cables by around 50% [2] from £500 per home, to £250. It could also reduce the time required for digging works, enabling fibre to be installed in some streets in a matter of hours, where it would have taken days.

Openreach, BT's network division, will have to repair faulty infrastructure and clear blocked tunnels where necessary for providers to access them.

Openreach must ensure there is space on its telegraph poles for extra fibre cables connecting homes to a competitor's network. And it must release a digital map' of its duct and pole network, so competitors can plan where to lay fibre.

Boosting incentives to invest

Competing providers will invest in building their own networks only if this is more attractive than buying wholesale services from BT.

These companies also need confidence that, in return for investing in full fibre, they will be able to recoup some of the costs through future prices on their network.

Our decision not to regulate the prices of Openreach's fastest wholesale superfast broadband products, including its new full-fibre services, supports the incentives for operators to build full-fibre networks [3].

To prevent BT from stifling new investment by rivals as network competition emerges, BT will not be allowed to make targeted wholesale price reductions in areas where rivals are starting to build new networks.

Protecting consumers, particularly in rural areasAt the same time, Ofcom has a role to ensure affordable access to superfast broadband for people and businesses. We wish to protect against high prices, particularly in places that are unlikely to benefit from competitive investment, such as rural areas.

We will do this by cutting the wholesale price that Openreach can charge telecoms companies for its basic superfast broadband service, which has a download' speed of up to 40 Mbit/s, and an upload' speed of 10 Mbit/s. [4]

Regulating this price will also help BT's rivals to compete for customers, while several build out their own full-fibre networks, as well as protect consumers from high prices during this period. In March 2017, we proposed to set the monthly charge for Openreach's 40/10' Mbit/s broadband package by 2021 at £11.23. Following our consultation, we are adjusting this figure to £11.92.

Building momentumToday's draft decisions confirm pro-investment measures set out by Ofcom in 2017. Since we put these forward, strong momentum has built towards full-fibre broadband in the UK. A range of broadband companies have announced plans to invest, including:

Virgin Media has made progress on its previous commitment to reach a further four million premises, half of which will be full-fibre.

Gigaclear to reach 150,000 rural properties by 2020.

Hyperoptic to cover five million premises with full fibre by 2025.

KCOM to have full-fibre coverage across all of its network by March 2019, covering 200,000 premises in the Hull area.

CityFibre, in partnership with Vodafone, to roll out full fibre to up to five million homes by 2025.

Openreach to connect three million homes and businesses to full fibre by 2020.

TalkTalk to cover three million premises with full fibre.

These plans could take coverage of full fibre in the UK from 3% today to up to 20% by 2020. Today's measures are designed to help deliver this and promote further investment beyond these ambitions.

Jonathan Oxley, Ofcom's Competition Group Director, said: Full fibre meets the country's future broadband needs, as demand for data soars.

Ultrafast speeds will allow people to download entire films, or businesses to share huge files, almost instantly. Full fibre will also underpin exciting technology like remote healthcare diagnostics, 5G mobile and connected devices.

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 UK.

Improving repairs and installationsMoving customers to full-fibre broadband will be a gradual process. In the meantime, Ofcom wants to ensure that Openreach installs new lines on its existing network, and fixes faults, more quickly.

So we have decided that, in future, Openreach will be required to:

complete at least 88% of fault repairs within one or two working days of being notified, up from 80% today;

complete at least 97% of repairs within seven working days;

provide an appointment for 90% of new line installations within 10 wor

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