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Ofcom proposes geographical segmentation of broadband markets

The UK regulator sets out its view for the market reviews after 2021,  when carrying out the next review of wholesale telecoms networks.

Background: Ofcom set out a strategy to support 'long-term investment in full-fibre broadband’ in July 2018. This included a range of objectives and actions, such as the recent proposal for unrestricted access to Openreach ducts and poles, and geographical differentiation of regulatory remedies. This builds on Ofcom’s previously geographically differentiated remedies.

What’s new? Today’s proposal shows Ofcom’s initial thinking around geographical segmentation. The proposed approach identifies three categories: ‘competitive’ areas (where there are at least two existing networks on top of Openreach supplying ultrafast broadband and leased lines); ‘potentially competitive’ areas (where there is one competitor to Openreach, and prospect for further entry); and ‘non-competitive areas’, where there are no real alternatives to Openreach.

Why it matters: Such geographical segmentation paves the way for a reduced regulatory burden on Openreach. Competitive areas, will be, by definition, not regulated.

The next steps: Ofcom’s initial thinking is subject to consultation until 26 February 2019. Ofcom aims to finalise its initial approach by Spring 2019; in Autumn 2019 the regulator will submit a full set of market proposals, including market definition, market power and remedies.