Universal Service Order Would Preempt the Market, Ofcom Chief Says
LONDON -- The U.K.’s telecom regulator “won’t rule out” a universal service order (USO) for broadband, it said Tues. However, given the significant progress in rollout the past 5 years, Ofcom will wait 12-18 months before recommending the govt. impose a USO, said Office of Communications (Ofcom) Chief Exec. Stephen Carter. Doing so now would be “preemptive,” he said at a hearing of the Commons Dept. of Trade & Industry Committee here Tues.
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Broadband uptake has been driven in part by increased retail competition among traditional switched telcos, cable and ISPs, Carter said. In addition, Ofcom has continued to press for competition at the wholesale level. However, he said, “70% who could get broadband today choose not to take it.”
The consensus on USO appears to be to let the market go as far as it can and then look at collaborative interconnections such as between local groups, said Ed Richards, Ofcom senior partner-strategy & mkt. development. If that approach fails, a USO will be considered, he said.
Another issue not ready for prime time in the U.K. is next-generation networks (NGN), participants said at Tues.’s hearing on Ofcom’s strategic telecom review. Across the country, fixed-infrastructure ADSL is the major player, Carter said. Ofcom’s judgment is that if it can get conditions for investment in local loop unbundling (LLU) quickly, that will open the market to new players, he said. The regulator has considered whether new technologies -- fiber to the home, or cable -- make other alternatives available but found no long-term scope for them, Richards said. LLU is the best option for most of the U.K., and full multistructure competition isn’t in the offing now.
One MP asked whether ADSL will experience capacity problems. It’s now possible to do 18-24 Mbps over copper, Richards said. At the moment, there’s very little ambition to roll out something else beyond stretching the copper to that capacity, he said. Asked whether Britain’s telecom sector will be disadvantaged if investment in NGN is discouraged, Richards said Ofcom wants to ensure the regulatory environment is right, so if there’s a demand for NGN, the framework will be in place. Alternative technologies demand an “investment appetite,” something there’s no evidence of, Carter said.