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nexfibre urges regulatory consistency in full fibre roll-out

January 14, 2025

nexfibre has released a report, UK Fibre: A Fork In the Road, outlining a series of recommendations for Ofcom’s upcoming Telecoms Access Review (TAR) with the objective of maintaining investment in the roll out of full fibre in the UK, promoting sustainable competition in the market and restraining anticompetitive behaviour from the dominant operator.

The full fibre market is highly fragmented, characterised by a large number of sub-scale operators with low customer and revenue numbers, which combined with financing pressures has seen network roll out slow dramatically this past year, according to nexfibre. The report sets out the regulatory conditions needed for the full fibre market to flourish and for infrastructure roll out to continue at pace.

Full fibre infrastructure is the backbone of the UK’s digital ambitions, driving growth and innovation across every sector— and in turn an important enabler of the Labour government’s central mission to deliver a stronger, more inclusive economy.

To create the right conditions for national scale fibre infrastructure competition, nexfibre argues Ofcom must address the following issues:

  1. Maintain regulation on the dominant operator: the dominant operator’s significant market power requires continued regulation to support the development of sustainable, long-term competition.
  2. Address anti-competitive behaviour: Introduce a new margin squeeze test (Economic Replicability Test) to prevent harmful pricing schemes and ensure fair competition.
  3. Improve PIA regulation: Address transparency and cost-sharing issues in the regulation of BT Openreach’s PIA infrastructure charges to support investment.
  4. Assess copper switch-off impact: Ensure appropriate regulation for BT Openreach’s copper to fibre network migration to promote competition.
  5. Take a pragmatic view of network numbers and consolidation: Focus on supporting long term sustainable competition at a national scale through consolidation.

nexfibre is one of the UK’s largest full-fibre wholesale network providers and one of the largest challengers to BT Openreach. The next generation network operator invested £1 billion this oast year in digital infrastructur and is on track to become the UK’s second-largest alternative network provider in only its second year of operation.

Giles Rowbotham, General Counsel and Chief Development Officer of nexfibre, commented: “The UK has made terrific progress in expanding full fibre broadband in recent years, thanks in part to the conditions created by the last Ofcom review, including PIA sharing. However, this progress is fragile. The current market structure is unsustainable and the Ofcom review comes at a pivotal moment for this country’s digital infrastructure market. Roll out progress in recent years has been driven partly by the emergence of a large number of sub scale altnets, many of whom are now in a moment of real difficulty, with restricted access to new capital and higher financing costs.”

“To overcome these issues, we are urging Ofcom to prioritise measures that boost sustainable scaled competition on the one hand and do more to restrain anti-competitive activity from the dominant operator on the other. To ensure innovation and investment in digital infrastructure and drive fibre rollout progress, the UK needs a regulatory environment that balances the need for stable regulation with a pragmatic view of market consolidation and also takes a firm hand in restricting behaviour that stymies meaningful nationwide competition. This is essential not only for the growth of our digital economy and the future of the broadband market, but also to the government’s central mission of delivering higher economic growth, which will create opportunities for communities, people and businesses across the UK. We look forward to continuing to collaborate with regulators and policymakers ahead of the upcoming Telecoms Access Review to ensure a digital infrastructure market that is competitive, resilient and delivers the economic growth the country needs,” concluded Rowbotham.

Categories: Articles, Broadband, FTTH, Policy, Regulation

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