Thursday, 12 July 2012

The eye of the beholder


Ofcom’s Annual Report was published yesterday and, guess what?, the regulator gives itself a largely glowing end-of-term assessment.  To be fair, the Report does at least dissect Ofcom’s individual goals, and attempts to monitor progress on each, but some of the progress statements take a rather blinkered view of regulatory achievement.  For example, as regards broadband, Ofcom identifies one of its aims as “to create an environment that gives confidence to potential investors, enabling them to make a case to roll out new superfast networks”. Here’s the first action review:

“After we required BT to offer access to its network of underground ducts and telegraph poles to allow companies to offer superfast broadband services, BT published prices for these in October 2011. These prices are among the lowest, if not the lowest, for comparable products elsewhere in Europe….In areas where BT has no commercial plans to invest, access to these ducts and poles will allow other providers to bid for the funding which will be made available by Broadband Delivery UK (BDUK)…” 

Sounds plausible enough but, in the real world, things look a little less rosy.  We heard just this week that Fujitsu, BT’s only qualified rival under the BDUK tendering framework, has withdrawn from two further broadband contests. Indeed, there’s a growing consensus that BDUK’s whole approach to subsidy allocation unreasonably favours the incumbent.  As to competitive access to BT’s passive infrastructure, there is countless anecdotal evidence from competitive providers that the PIA product is simply not fit for purpose.  No wonder, then, that BT itself acknowledges a lack of interest: in evidence to the House of Lords Select Committee on superfast broadband, Sean Williams, BT’s Group Strategy Director, admitted that “there is no demand for PIA”.

The success of other facets of Ofcom’s broadband policy can (and will) be questioned on another day but, for current purposes, a more realistic judgement in Ofcom’s report card might be: ‘could do better’.

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