Ofcom is laying out its pathway for fiber broadband almost everywhere across the UK in five years, but concedes that BT still dominates the market.
Britain's communications regulator today published its Telecoms Access Review for 2026-31, following on from the last review in 2021. That put in place a regulatory framework aimed at boosting investment and competition in the wholesale market for consumer broadband services.
The updated document basically tinkers around the edges, tweaking a few things here and there while largely keeping the existing regulations unchanged.
Ofcom says that it recognizes that BT, the former state-owned telco, still has "significant market power" (SMP) in a number of markets, and so will continue to impose regulations on Openreach, its infrastructure arm, to address its monopoly-like influence.
This means keeping rules that require Openreach to let other network firms access its utility poles and underground ducts to deploy new fiber via its Physical Infrastructure Access (PIA) scheme.
Ofcom is also keen to see investment by and competition from alternative network providers (altnets). But it also wants to protect consumers by setting flat, inflation-adjusted prices for a basic superfast broadband product, while allowing flexibility on pricing for other speed bands. This applies to so-called "Area 2" regions, where there is at least one alternative provider to BT, which it reckons now covers 86 percent of UK premises.
For "Area 3," typically rural locations where there is unlikely to be any other provider, the regulator will let Openreach "recover the reasonable costs of its investments" in rolling out fiber.
In both areas, the price cap on what Openreach can charge retail internet service providers (ISPs) like Vodafone or Sky for using its network is being raised to cover download speeds up to 80 Mbps rather than the 40 Mbps at present. Higher-speed products remain unregulated to incentivize investment in networks that can deliver greater speeds.
Ofcom says that it expects that, by the end of this review period (i.e. 2031), effective competition will exist for wholesale services, and there will be no need to regulate at this point. But recognizing that pigs may also fly, it will continue with the current rules if this doesn't happen.
If there should be a need to move to cost-based regulation of Openreach in the future, it will ensure that price controls are set at a level that allows BT to earn a return above the cost of its investments.
Ofcom is patting itself on the back over what it sees as the success of its existing rules, which it says have aided significant network build-out by Openreach and other companies, and set the country on a course to having widespread availability of gigabit-capable networks.
Since 2021, the number of premises that can access full-fiber broadband has increased from 6.9 million premises (24 percent) to 23.7 million (78 percent) by July 2025, it claims.
But even where full-fiber is available, take-up has only risen to 42 percent of premises, compared to 24 percent in 2021. The regulator concedes that further investment is needed to deliver fiber services to more of the UK, and that competition has not yet developed to the point where it could remove all wholesale regulation.
The UK government previously earmarked £5 billion ($6.7 billion) for the Project Gigabit scheme to subsidize broadband rollout in hard-to-reach areas, and has so far awarded over 30 contracts. Ofcom says that it expects technologies such as fixed wireless access (FWA) and new satellite services to play an increasingly important role here.
FWA typically uses 5G networks, while satellite is available from providers such as Starlink and Brdy, which uses OneWeb.
Openreach rivals appear sanguine about the situation, with a spokesperson for altnet CityFibre telling The Register that "the Telecoms Access Review provides CityFibre with a stable regulatory framework as we scale our network and bring the benefits of genuine infrastructure competition – lower prices, faster speeds and better services – to consumers and businesses nationwide."
"With scaled wholesale competition not yet established in the UK, Ofcom is right to hold its nerve, provide certainty, and avoid a rush to deregulation. It must now remain vigilant and ensure compliance with the rules it has set out," a spokesperson for Virgin Media O2 told us.
On a LinkedIn post, PP Foresight analyst and founder Paolo Pescatore said the move "looks more like evolution than revolution."
"It is sticking with its core strategy: encourage fiber investment, support infrastructure competition and keep Openreach in check where it still holds too much market power. In short, Ofcom believes the approach is working, but competition remains fragile."
"We should still expect some jostling, but attention will turn to how Ofcom applies these rules in practice when future Openreach offers land, and whether altnets can convert network build into sustained take-up fast enough to justify the policy bet," he added.
For its part, Openreach appeared less enthusiastic. In remarks sent to The Register, managing director for Regulatory Affairs Mark Shurmer said: "This is a complex document that we need to review in full. We'll continue to work with Ofcom to make sure the regulation set today will allow fair competition to get the best results for consumers."
"No one is going further or faster than us to build the UK's best network(s). Our investments help customers – and the country – do brilliant things, but they only happen when the environment is stable and supportive. That's why Ofcom's review is critical to the future of digital connectivity across the UK." ®
Source: The register