As promised, I’ve been mulling over Ed Richard's address to the Total Telecom World Conference last month. Entitled ‘Competition & Investment in Superfast Broadband’, this was a curious speech, elegant in some ways but containing more than the usual share of empty rhetoric. In fairness, I thought it set out the challenges of the superfast era pretty well but it was rather less convincing in the solutions it offered.
In essence, the difficulty is that ‘the ‘early fibre’ phase of broadband development involves considerably greater risk for investors and companies’ than did historic network upgrades, the uncertainties including:
· the chosen deployment technologies;
· consumer demand and willingness to pay;
· capital expenditure and deployment costs;
· end user equipment;
· the nature of competition
In response, says Richards, regulators will have to take the following approach:
· Avoid hostages to fortune by adopting policies that are light touch, long term and flexible
· keep regulation and regulatory actions predictable
- respond to converged and bundled services by providing consumers with better quality information and by giving them more sophisticated switching options.
In other words, “We must accept that this phase of development is different to its predecessor and, most fundamentally, we must recognise that we need to aim to combine essential investment with effective competition…we aim to ensure that regulation is as adaptable, flexible and innovative as the broadband technologies that are being deployed” Not exactly a policy blueprint, eh…? And the central issue of how to avoid regulation acting as a disincentive to investment is barely touched on.
It’s also unclear whether the suspected former tension between regulator and government has been resolved. Richards is at pains to point out that the creation of ‘the best broadband network in Europe by 2015’ is government policy, not an Ofcom objective, and that “our regulatory approach needs to be seen alongside the context of the public policy objectives” (whatever that means). More pointedly, Richards explains that: “we have worked with the government to identify some key criteria to ensure that public investment is the friend of competition and not inadvertently its enemy”. Unfortunately, these criteria are not explained. With that in mind, it’s curious to note that the latest consultation on duct & pole access – one of the central pillars of Richard’s regulatory strategy for the new era – has been launched by DCMS, rather than Ofcom. Hmm…
