Ofcom has today published its first consultation paper analysing the outlook for future broadband “Next Generation Access” (NGA) networks (here). Naturally, being a regulator, Ofcom's main point of focus is upon how best to regulate new services without stifling competition:
Operators of the current copper-based networks and technologies have already upgraded their technology to deliver faster broadband speeds. Consumer demand continues for the applications and services supported by these upgrades. To date, the networks have been able to meet this demand and offer sustained improvements.
However, the development and consumption of high speed services means that current generation networks will at some point be unable to deliver the very high speed broadband service that may be demanded by customers.
In the UK operators are considering how best to respond to the continuing growth in demand for bandwidth and the commercial case for significant investment in these new technologies. Ofcom’s consultation highlights how the market and infrastructure conditions in the UK are very different to those countries where investment in fibre has already been strong. The reasons include the relatively mature pay TV market in the UK, the high speeds of current broadband enabled by shorter distances from exchanges and the comparatively high population densities in countries where fibre is advancing fastest.
While the exact nature and timing of demand for very high speed broadband is uncertain, as is the nature of the services that will drive this demand, there is growing agreement that these networks could have profound effects for UK citizens and consumers and the economy.
Ofcom's plan is to use a "regulatory policy based on the same principles it established for current generation broadband". Hopefully that doesn't include all the mistakes they made too, such as the time it took before proper migration rules were able to be introduced, which still haven’t been perfected:
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.
Typically the consultation is in its early stages and designed to run alongside the Broadband Stakeholder Group's (BSG) coming next-gen summit; it will close on 5th December 2007.
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