Fibre access essential says industry group
Published: 16 Apr 2007 13:18 BST
...to put a price of €14bn on such a deployment.
The solution to the investment conundrum, according to the report, lies in "alternative commercial models" which "align the interests of operators with upstream content and service providers and end consumers".
"If wholesale products are available, then retail markets should not need regulation, especially where innovation in new products and applications, which exploit increased bandwidth, is to be encouraged from multiple parties," the report states.
The BSG also acknowledges worries from businesses over operators blocking or degrading third-party applications and services in favour of their own — part of the wider so-called "net neutrality" debate — and says such concerns must be "mitigated".
The report also calls on the telecoms regulator to impose a certain amount of regulation. The report warns that: "Ofcom must ensure that potential efficient investment is not undermined by regulatory uncertainty" and urges the regulator to avoid assuming that any NGN operator will quickly achieve a position of significant market power (SMP). However, it goes on to say that, even if an operator is found to be enjoying SMP in certain geographical areas, it might be better to adopt "behavioural remedies based on functional separation" rather than regulating an operator on the basis of how successful it is. The report encourages Ofcom to work out a new regulatory framework within a year, in order to encourage investment in FTTx.
Interestingly, the report suggests that some level of public sector intervention will be necessary in order to roll out fibre in rural areas. However, the authors also warn that, because the market for next-generation broadband is "at a very embryonic stage", it is difficult to predict where market failure may emerge and the public sector should therefore "forbear from making large-scale interventions to promote [next generation access] deployment at this stage".
Ofcom's chief executive, Ed Richards, last week insisted that no public money would be necessary to ensure a sufficient level of next-generation access across the UK.
The BSG report also urges the Department of Trade and Industry to "work together with relevant departments and public-sector bodies and the industry to develop streamlined approaches to [next-generation access]-related street works and planning issues to minimise both the disruption caused, and the cost to operators of these works".
BT responded to the report by defending the capacity of 21CN. "This is a fast-moving market and our intention is always to stay ahead of what our customers demand," a statement from the telco said. "We believe our present and planned products will do just that."
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