More UK homes are set to benefit from ultrafast internet speeds, after a draft decision by communications regulator Ofcom 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 three per cent of UK homes and offices.
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.”
Ofcom has published 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.
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 per cent – 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.
Ofcom has said that the 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.
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.
At the same time, Ofcom has a role to ensure affordable access to superfast broadband for people and businesses. It has said it wishes to protect against high prices, particularly in places that are unlikely to benefit from competitive investment, such as rural areas.
It 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.
In March 2017, Ofcom proposed to set the monthly charge for Openreach’s ’40/10′ Mbit/s broadband package by 2021 at £11.23. Following its consultation, it is adjusting this figure to £11.92.
A range of broadband companies have announced plans to invest in the tech including Virgin Media, TalkTalk and CityFiber in partnership with Vodafone.
These plans could take coverage of full-fibre in the UK from three per cent today to up to 20 per cent by 2020.
Moving 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.
These rules are part of a range of measures designed to ensure all telecoms companies provide the quality of service customers expect. For example, Ofcom has already announced that broadband and landline users will receive automatic compensation when things go wrong.
It is also supporting the UK Government’s plans for homes and businesses across the country – including in rural and remote areas – to have the right to request a decent broadband connection.
Ofcom’s measures have been submitted to the European Commission for comment, after which it will publish a final statement next month.