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Superfast UK broadband gets go-ahead

04 марта 2009

The UK took a decisive step towards superfast broadband on Tuesday after regulators gave the green light to a £1.5bn ($2.1bn) plan by BT, the leading fixed-line phone company.

BT will start supplying superfast broadband next year, and aims to make high-speed internet access available to 40 per cent of homes by the end of 2012.

Virgin Media, the cable television operator, is already selling high-speed broadband, and will make it available to 50 per cent of homes by the autumn.

Ofcom, the telecoms watchdog, on Tuesday held out the prospect of a relatively benign regulatory regime for BT and its superfast broadband plan.

The government, together with Ofcom, is keen to see BT proceed with its plan in spite of the recession.

Ian Livingston, BT’s chief executive, said he was encouraged by the clarity of Ofcom’s proposed regulatory regime.

“Today’s announcement gives us the green light to push ahead with our £1.5bn superfast broadband investment plans to reach at least 40 per cent of UK households by
2012,” he added.

The superfast broadband plan was the first significant announcement by Mr Livingston after he became BT chief executive last June.

However, BT insisted it would not proceed unless it could secure an adequate investment return.

The return was premised on the company’s ability to impose wholesale fees on rivals that want to sell broadband services to consumers using BT’s £1.5bn network.

Ofcom said that under its proposed regulatory regime companies such as BT “will have the freedom to price wholesale superfast broadband products themselves without any regulatory intervention”.

The watchdog added: “This will allow investors to make an appropriate return on their investment, based on the risk they are taking but pricing at a level that the market will bear, given the ready availability of alternative broadband services.”

Ed Richards, Ofcom’s chief executive, rejected the idea that BT’s pricing freedom might result in high charges for consumers who want superfast broadband. He said BT’s pricing would be constrained by the low charges that consumers pay for existing broadband services.

However, Mr Richards acknowledged that the government and Ofcom would have to look at how to extend superfast broadband to rural areas, given that BT and Virgin Media were focused on supplying towns and cities.

Superfast broadband should enable different people in one home to carry out high bandwidth activities simultaneously, such as watching high definition television and playing interactive games online.

BT’s superfast broadband network is based on optical fibre rather than copper wires, and should enable download speeds of between 40 and 100 megabits per second.

Источник: Financial Times

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