Ofcom ‘Will Demand’ Openreach Lower Wholesale Fibre Broadband Costs

Ofcom’s next step in battle for more competitive fibre broadband market will apparently see it target BT Openreach wholesale costs

Ofcom will reportedly demand Openreach lower the cost of third-party access to its fibre network as part of a wider review of the wholesale telecoms market. 

According to The Sunday Times, Ofcom will demand that the cost of renting a copper or fibre line to and from a roadside cabinet. However to incentivise investment in the network, Ofcom will loosen regulation  

The paper also claims the regulator will order “substantial improvements” to service levels and will issue Openreach with larger fines if it doesn’t fix or install lines for the likes of Sky, TalkTalk and Vodafone on time. 

splayfoil road fibre cabinet

Ofcom fibre regulation 

The hope is the measures will boost competition in the market. 

“We are currently undertaking a review of wholesale telecoms services, which we carry out every three years,” an Ofcom spokesperson told Silicon. “We expect to publish our proposals in the coming weeks.” 

Ofcom has only just reached an agreement with BT on the future structure of Openreach, which will become a legally separate entity with its own board, budget and strategy. All staff will be transferred to the new company, which must make investment decisions for the benefit of all providers – not just BT. 

Competitors had argued BT’s ownership of Openreach gave it an unfair advantage and that the current model gave little incentive for BT or rivals to invest in fibre infrastructure. BT refuted this, arguing that Openreach benefits from BT’s capital and R&D capabilities and that any disruption would impact its investments in G.Fast and fibre to the premise (FTTP).  

Both BT and most of its major rivals said they were happy with the outcome, as was Ofcom CEO Sharon White. 

“This is a significant day for phone and broadband users,” she said, adding the new Openreach would continue to be monitored. “The new Openreach will be built to serve all its customers equally, working truly independently and taking investment decisions on behalf of the whole industry – not just BT.  

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