In addition to compelling it to allow rivals like Talk Talk, Virgin Media and BSkyB to share the access part of its fibre, Ofcom has also ordered BT to share underground ducts and telegraph poles so rival players can build their own FTTH networks cost effectively. This will allow rival players to offer high-speed broadband in areas where BT does not yet offer such services, either filling in rural gaps where BT has no fibre plans or potentially beating the incumbent to market in areas where it has simply yet to develop a service.
Ofcom said its ruling is in support of the UK government’s aim to promote competition and investment in super-fast broadband services across the country. It insisted that BT will still be able to achieve a fair rate of return that reflects its commercial exposure as a builder of infrastructure.
Ofcom said that although it is allowing BT to set its own prices for usage of its fibre investments, it will work to ensure that “prices will be constrained by the highly competitive wider broadband market and will be subject to rules to prevent anti-competitive pricing”.
BT has welcomed the Ofcom ruling, saying that it has “provided much of the regulatory clarity and certainty that we have been seeking”.
Competitors’ use of BT’s fibre will be over a virtual link, a model known as known as virtual unbundling. BT said that its fibre roll-out now passes well over two million UK homes, and that it is on track to pass four million by the end of 2010.
Ofcom’s chief executive, Ed Richards said: “The development of the UK’s super-fast broadband future is well underway with the roll-out of services in large parts of the country. Ofcom has finalised a clear regulatory framework to promote investment, competition and innovation to enable as many consumers as possible to benefit from these exciting new services.”
BT is to deliver high-speed broadband services to Cornwall and the Isles of Scilly, reaching up to 90% of people in those areas by 2014.
