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Author Topic: ofcom deregulates 70% broadband market  (Read 2563 times)

tuftedduck

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ofcom deregulates 70% broadband market
« on: May 24, 2008, 10:29:57 AM »

Not sure if this is news, and not sure if it is good or bad news for us users, but an interesting read.

http://www.computeractive.co.uk/computeractive/news/2217431/ofcom-deregulates-broadband
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kitz

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Re: ofcom deregulates 70% broadband market
« Reply #1 on: May 24, 2008, 10:52:07 AM »

I'm not sure what this will bring..  but it does appear to be another step towards long predicted two-tier broadband in the UK.

Something that Ive harped on about for ages is that its OFCOM rules that have kept the BTw prices high - meaning that IPStream adsl is higher priced than LLU. A relaxation of this rule is good in that it means that BT can now compete at a fairer level at many exchanges.  However dont be fooled by the 70% - thats not exchanges.. its population.  In other words a huge portion is concentrated around the cities and large towns.  Leaving anyone outside these areas still stuck with the higher pricing enforced.

Theres a map of which areas are to be de-regulated here which are those areas in red.

Roll out of WBC (BTw's equivalent of adsl2+ used by the LLU providers) is about to commence.. but it will be many years before it reaches all exchanges.  For example my own exchange is in one of those red areas, but last I heard it was scheduled for upgrade in Q4 2010.

Ofcoms official statement can be found here.
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tuftedduck

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Re: ofcom deregulates 70% broadband market
« Reply #2 on: May 24, 2008, 10:58:27 AM »

Oh well, I'm in a light blue area so I will not be holding my breath waiting for improvements.
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mr_chris

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Re: ofcom deregulates 70% broadband market
« Reply #3 on: May 24, 2008, 02:04:52 PM »

Two things could happen with the deregulation:

1. The red areas (which equate to current areas with multiple LLU choice) will be targeted first by the 21CN rollout, in order to claim back some of the market share lost by LLU. If I understand the map right, BTw don't have any price regulation in these areas, so can knock prices down a bit to become more competitive with the LLU installations.

Or...

2. A lot of the red areas could be seen by BT as a bit of a 'lost cause' already... given they are still obliged to provide to the whole country where the LLU providers aren't, then BT will never be able to be as cheap as the LLU providers because the costs required to provide 21CN to the remote far-flung areas will eat into the revenue gained from more profitable areas, where the LLUers already have a strong foothold.

Interesting times ahead, and it's very hard to predict what this will do to the future broadband market in the UK.

Hopefully, it will not become too much of a 'two-tier' structure, I guess views on that depend on whether you view broadband as a utility or a commodity. Food and petrol generally costs more in remote areas of the UK, because of how much more expensive it is to get stuff to those places. If it costs a provider a lot more to get broadband to a more remote area of the UK, then shouldn't that be reflected in the cost?

Or should providers average out the cost and use cheaper areas to subsidise more expensive areas? But this doesn't allow BT to ever be as cheap as the LLU providers, which is unfair on BT.

So I guess I have come to the conclusion that this is probably a good thing for the UK, providing a decent balance is reached and it doesn't totally alienate the population outside of the magic red areas.
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Chris