Openreach must continue to offer competitors building their own full fibre broadband networks access to its ducts and poles at regulated “fair, cost-based prices” for the next five years under updated rules unveiled by Ofcom today.
As the only UK-wide network, the company was seen as having a significant advantage over rivals leading Ofcom to impose a series of wide-ranging obligations and commitments to support the emergence and growth of alternative networks which, without access to existing infrastructure, would be at a significant disadvantage.
78% of homes now have access to full fibre broadband from at least one network, up from less than a quarter five years ago, and that figure is projected to increase to more than 90% – almost 29 million properties – by the end of 2027.
Unlike its rivals, Openreach doesn’t sell directly to consumers but instead provides its services on a wholesale basis to Internet Service Providers such as BT, Vodafone and Sky, who in turn sell them to end users.
Ofcom has updated its rules which will govern Openreach until 2031 but says that its revised regime opens the door “to gradual deregulation” of the company.
Other obligations being imposed by Ofcom include a price cap on the amount Openreach can charge retail providers for download speeds up to 80Mbit/s, rather than 40Mbit/s at present.
The prices of higher-speed products will remain unregulated, “so providers have an incentive to invest in networks that can deliver faster speeds”.
Ofcom also says “Openreach should not have to incur unnecessary costs for running two networks at the same time” and so it will “progressively shift regulation away from copper services to full fibre services, giving Openreach flexibility to encourage customers to migrate off its old copper network.”
The regulator has also set out the conditions it’s likely to impose when it next updates its rules in 2031 saying: “Should we need to set price controls on Openreach in the future, it would have the opportunity to earn a return above the cost of its investment over time.
“Alternatively, if effective competition emerges by the time of our next review, there will be no need for Ofcom to regulate beyond access to ducts and poles.”
Ofcom’s Group Director for Infrastructure and Connectivity, Natalie Black, said: “Today marks a major milestone on the road to a better connected, more productive Britain.
“Five years ago, we put in place new rules to drive competition between networks and get them building full-fibre broadband, which now reaches nearly eight in 10 homes and offices across country.
“But our mission isn’t yet complete, and we’re creating the right conditions for the fibre rollout in its final phase.
“Our review of the rules has been an extensive and complex undertaking given the nature of the market, and we appreciate the considered engagement from the sector.”