Ofcom concerned over superfast broadband take-up

The interest in super-fast broadband isn't overwhelming as it rolls out across the country
Kerry Butters

November 11, 2011
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Ofcom have expressed concern over the interest consumers are showing in signing up for superfast broadband, which could become a problem with regard to government plans for the UK to have the best fibre network in Europe by 2015.

The regulator says that they want to see widespread availability of services as well as a competitive market amongst suppliers.

This would enable consumers to make choices which are better suited to their budgets and lifestyle, providing lower prices and better quality services.

Whilst superfast broadband is becoming more widely available, subscriber numbers remain low and the only real interest is being shown by households who have teenagers.

This is due to the amount of music and video streaming, social networking, online gaming and internet-based educational services used by teens.

However, it’s not outrageous to assume that these teens will also become data-consuming adults before too long and the next teen generation are likely to be even more data-hungry.

Whilst data consumption continues to gather pace, there remains doubt regarding the demand level for superfast services and whether relatively light internet users would be willing to pay for fat pipes.

Currently, the average consumer is using around 17GB of data per month, a figure that shows downloads have increased sevenfold over the course of the last five years.

However, the concern is that unlike the transition from dial-up to broadband, getting the nation onto superfast services “involves considerably greater risk for investors and companies, as well as for bigger calls for governments and regulators.”

“In the face of such uncertainty and risk, we need a more flexible and a more long-term strategy than the era of ‘late copper’ required,” the regulator said.

One way that this uncertainty can be addressed is to ensure that competition is promoted at “the deepest level of infrastructure at which it will be effective and sustainable.”

It is thought that “commercial deployments” will cover around two thirds of the country, the remaining third is expected to be helped by the government pot of £530 million in order to roll out superfast services to 90% of the UK.

The remaining 10% will need “a creative mix of technologies” in order to make superfast broadband available.

BT have come in for criticism in recent months for their pricing of wholesale services, leading to claims that the company are attempting to gain a monopoly in superfast services.

However, Ofcom point out that BT’s pricing structure has now been reduced and prices are between 30-50% lower than the original prices set. This now puts the charges at amongst the lowest in Europe and should help create healthy competition in the sector.

For competition to be effective though, consumers must be able to switch providers with ease.

Competition is also dependent on bundles and not only bandwidth but also content. Ofcom say that this is one of the reasons they have attempted to convince Sky to provide wholesale access to premium sports content.

Sky continue to be resistant to the idea after four years of talks and the issue is now expected to be resolved one way or another at the Competitions Appeals Tribunal.






 

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