UK starts consultation on faster broadband speeds
LONDON (Reuters) - Britain's telecommunications regulator Ofcom launched a consultation on Wednesday to chart the country's move to a super-fast broadband network needed to keep it internationally competitive.
Ofcom said the time was right to address the issue as more people were turning to the Internet to watch video-on-demand or play games -- putting a strain on the current copper wire network and the speeds it can deliver.
"The development and consumption of high speed services means that current generation networks will at some point be unable to deliver the very high speed broadband service that may be demanded by customers," Ofcom said.
The regulator said it would aim to promote investment in future broadband Next Generation Access networks in the same way the current broadband market had developed -- by promoting competition among operators which had resulted in faster speeds and cheaper prices.
It said it would not propose offering incentives to operators as this would manipulate the market but any regulation would have to reflect the risk involved as the demand for higher speeds is currently unclear.
Reflecting the risk within regulation would mean that any operator wanting to invest in the new system would be able to make a return on their investment.
"Investment in Next Generation Access will represent a substantial commercial risk and the market should decide where and when it will be made," Ofcom Chief Executive Ed Richards said in a statement.
"We want to ensure there are no barriers to investment and provide a clear regulatory environment which will help encourage investment."
Ofcom's announcement follows comments made by Stephen Timms, the minister for competitiveness, who said last week that Britain faced a new challenge to keep up with other countries such as South Korea and Germany which are investing in new, fiber optic infrastructure.
But Ofcom said that each country was different in terms of when its infrastructure needed upgrading and that the current copper wires system was still sufficient.
Analysts believe that putting fiber optic cables between Britain's local exchanges all the way to the house could cost up to 15 billion pounds ($30.2 billion).
Alternatively, they could use a "copper sub-loop" system which would put fiber between the local exchanges and the cabinets on the street, which are already connected to homes by copper.
Historically, former telecoms monopoly BT Group managed the infrastructure but this has now been opened up to allow over 3 million broadband lines to be controlled by other operators such as Carphone Warehouse and BSkyB.
A spokesman for BT said it welcomed the chance to discuss next generation technology but it did not yet see the commercial case for rolling out fiber technology to the home.
BT already provides fiber connections to 120,000 businesses. Cable operator Virgin Media, whose high-speed network covers about half the country, had 3.1 million of about 13.8 million broadband subscriptions in Britain in the first quarter.
The consultation will close on December 5.
