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Ofcom seeks to spur broadband investment

27 сентября 2007

Regulators sought to entice companies into making multi-billion pound investments in ultra-fast broadband networks, after warning that existing telecoms systems are likely to get overwhelmed by bandwidth-hungry households and businesses.

Ofcom, the media and telecoms watchdog, published proposals to encourage the investments, which it said would produce the most important changes to the UK’s telecoms infrastructure in 20 years.
The government and Ofcom are insisting the private sector pay for the super-fast broadband networks, which could cost £15bn or more.
Ed Richards, Ofcom’s chief executive, made plain existing networks would not cope as people demanded faster internet download speeds and used more and more bandwidth-hungry devices, such as television delivered over fixed-line broadband. “Today’s access networks at some point in the future will run out of steam,” he said. “Consumers will demand faster and faster access.”
Mr Richards predicted the emergence of a patchwork quilt of fixed-line and wireless networks for fast broadband, rather than one “Stalinist” solution. These networks would be risky investments as it was unclear how much consumer and business demand existed for fast broadband. He warned the superior download speeds would be available first in urban and “rich areas”.
BT is the most obvious candidate to build a fast broadband network because the former state monopoly has the only fixed-line infrastructure that reaches to almost all the population.
Virgin Media’s cable TV network, which also provides broadband connections, covers about 50 per cent of the population.
Existing networks are likely to be overwhelmed by high definition television delivered over fixed-line broadband, as well as the likes of online gaming. BT is planning to offer broadband speeds of up to 24 megabits per second from next year on its existing network.
But the Broadband Stakeholder Group, a lobby organisation, says the most bandwidth-hungry households will demand more than 23mbps by 2012. Moreover, it says only 10 per cent of households will get speeds of more than 20mbps on BT’s existing network. This is because the speeds are principally determined by the distance between homes and BT’s phone exchanges. The longer the length of copper phone wires running between a home and an exchange, the slower the speed.
Ofcom published a consultation document that focuses on the case for investments in optical fibre networks to replace the existing copper infrastructure, and how a regulatory framework could encourage such changes.
Two main alternatives are discussed. First, running fibre between BT’s exchanges and the phone cabinets that are found on street corners. These arrangements could produce speeds of up to 100mbps.
Second, running fibre all the way from the exchanges to homes, potentially allowing for limitless speeds.
The second option is far more expensive because it would involve digging up streets to lay fibre to homes on an enormous scale. Ofcom officials said it could cost more than £15bn.
Ofcom’s document leans towards the first option, partly because officials said the cost could be about £7bn. But the document also retains the option of running fibre to homes, and suggests companies other than BT might be persuaded to do this. Two possible candidates, Carphone Warehouse and British Sky Broadcasting, declined to comment on Wednesday.
To try to encourage the investments in fibre, Ofcom is considering reducing the price controls that it applies to the broadband market, although it said households should not have to pay more for existing services.
BT said it was “committed to providing our customers with the services they want both now and in the future”.
Do not panic, says regulator chief
Britons should not be “panicking” because the country is lagging behind other leading industrialised nations in the building of fast broadband networks, according to Ofcom’s chief executive, writes Andrew Parker. Ed Richards said the UK’s circumstances were such that it could be a late adopter of fast broadband.
Last week Stephen Timms, minister for competitiveness, warned of a risk of damage to competitiveness if the UK continued to trail behind other countries in fast broadband. While BT has made no commitment to a fast broadband network, some of its equivalents in Asia, Europe and the US have done.
Verizon, the second largest US telecoms company, is spending £11bn on replacing copper wires with optical fibre in order to relay television over fixed-line broadband to millions of households.
Ofcom says internet TV has been a big spur to some international investments in fast broadband but highlights how Britain already has a highly developed digital and pay-TV market.
“It may therefore be that the efficient deployment of [fast broadband] is simply earlier in some other countries than in the UK,” says Ofcom’s consultation document.
“We do not yet see evidence that the UK will be significantly disadvantaged economically or socially as a result.”

Источник: Financial Times

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