Ofcom caves into BT's subsidy demand

Regulators are ready to offer BT more control over a next generation UK broadband infrastructure in exchange for investment, a report from The Register said.

The Register also quoted Ofcom chief Ed Richards saying that 'operators who might invest in new infrastructure (read: BT) need to know that watchdogs will let them 'make and keep' a rate of return on the investment.

That likely means allowing BT to operate a fibre network at a big competitive advantage, via high wholesale charges to other broadband providers who want to use the lines, the report said.

'They [investors in fibre] need a time horizon that gives them a degree of assurance for a realistic period in the future; that they know for example that the regulator will not suddenly change the rules of the game to reduce the returns just as the rewards for the risk start to flow in,' the Ofcom head further said.

Richards said the debate on next generation access in the UK has been 'slow to ignite' because the existing copper-based broadband market is so competitive.

Ofcom has invited a bunch of communications CEOs to a new series of jaw-jaw sessions focused on practical action to combat industry inertia.

It's estimated that a national next-generation network deployment would cost up to 15 billion pounds. Ofcom is currently investigating whether that figure could be reduced by laying cables in existing holes in the ground owned by the utility companies.

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