UK aims to 'supercharge' broadband with BT regulation changes

LONDON (Reuters) - Britain will "supercharge" investment in full-fibre broadband by encouraging more competition in cities and supporting provider BT BT.L in rolling out faster connections in rural areas, UK telecoms regulator Ofcom said on Wednesday.

British Telecom (BT) advertisement is displayed at Goodge Street underground station in London, Britain, November 15, 2019. REUTERS/Simon Dawson/Files

Prime Minister Boris Johnson vowed to upgrade the country’s internet networks in his successful pitch to voters last month, pledging to deliver full-fibre nationwide by 2025.

The opposition Labour Party wanted to nationalise BT’s fixed-line network and provide free services, a radical step that put broadband at the top of the political agenda.

The regulator wants different regulatory regimes for rural areas and for cities and urban areas, where firms including Virgin Media and Cityfibre are building fast networks.

“We’re removing the remaining roadblocks to investment and supporting competition, so companies can build the networks,” said Ofcom interim CEO Jonathan Oxley.

BT, which owns and operates the national Openreach network, welcomed the plan.

BT shares were up 3% at 198 pence in early trade, topping the FTSE 100 index.

“We were also really encouraged by the new government’s 5 billion pound commitment to facilitate the build of gigabit-capable networks to the hardest-to-reach parts of the country,” said BT CEO Philip Jansen.

“We will continue our discussions with Government, Ofcom and the industry so that we can have the confidence to significantly extend our role in this important national mission and increase our full fibre target to 15 million premises and potentially beyond.”

Britain has lagged European rivals in building “gold standard” broadband, which use fibre-optic cables all the way from the exchange to people’s homes without using copper.

Ofcom, however, said earlier changes encouraged more companies to invest in full-fibre, and coverage grew to 10% from 3% of premises between 2017 and 2019.

It said its proposals for 2021-2026 would help ensure nobody gets left behind.

It wants to cap entry-level superfast broadband to inflation, which will provide a margin on fibre investment, while keeping the fastest fibre products unregulated, supporting competition between network providers.

In rural areas where Openreach is the only viable network, it wants to allow the company to recover costs across a wider range of services.

Ofcom also said it would ease regulation on the ageing copper network in areas where full fibre is rolled out so BT does not have the cost of running two networks and to encourage customers to switch to faster services under the proposals.

The consultation on the proposals closes on April 1.

Editing by Kate Holton and Jason Neely