Saturday, July 5, 2008

Ofcom to Thread Fiber Through a Needle

Ofcom, the U.K. communications regulatory authority, will try to thread a needle this fall as it prepares to create a new framework encouraging fiber-to-customer deployment. On one hand, it wants to convince BT that a reasonable financial return can be earned if it deploys fiber-to-customer network.

On the other hand, Ofcom seems committed to a wholesale regime that allows competitors access to the network. And therein lies the problem. BT will want some assurance that wholesale rates resemble as closely as possible those it might get at commercially negotiated rates. That likely means relatively minimal price control.

BT's competitors will want healthy discounts that mirror what they currently can get for DSL infrastructure. Ofcom likely won't allow that, as such discounts arguably create too much uncertainty about rate of return.

That's a pretty tight needle to try and thread.

1 comment:

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