BT to begin next gen broadband network

Yesterday The Observer newspaper reported that regulator Ofcom will agree to BT's demand and tell it to go ahead with a new national broadband network, covering 10 million homes. A new fibre optic backbone network will be built out in the next three years.

The report said that Ofcom is to propose a regulatory regime on Tuesday that will ensure the incumbent makes a return on the necessary £1.5 billion investment.

After two years of dithering and intense negotiations of late, spurred on by Communications Minister Stephen Carter, the regime will include a change in the way that BT's networks business Openreach operates so it can offer speeds of up to 100Mbps.

Last month Carter's interim report, Digital Britain, put the 'upgrading and modernising' of the UK's digital networks as a top priority.

BT will have to make its new fibre optic network available to rivals on a wholesale basis, but the regulator's proposals will ensure that it can make money out of it.

Virgin Media is already upgrading its cable network to support speeds of 50Mbps, although, as The Observer points out, it doesn't have to open its network to rivals - yet.