OFCOM’s Connectivity Carrot

With a real need for high speed connectivity to keep up with the demands of an increasingly data heavy society, some type of action was needed to boost the roll out across the UK.  I accept that OFCOM’s announcement that it does not intend to cap rates on full fibre connections provided by Openreach will not please everyone – To the market, both competitors and consumers, BT has been playing the slow game for a while, milking its control of the last mile and may be seen as being rewarded for this snail paced approach.

However the alternative perspective is that, faced with regulatory pricing caps BT had an uncertain premise around the future value of a substantial commitment, not great for any long term decision making.  BT’s balancing act was failing significant parts of the country in terms of connectivity and whilst some competition have now built up their infrastructure, BT arguably needed to be fully engaged to achieve country wide connectivity targets within a reasonable timeframe.  

So, for the country (or at least, as the article rightly points out, the 80% of the country where investment can yield a return) installed with high speed connectivity there was a need for a carrot to provide an economic justification for a multi-billion investment, otherwise why do it?  

Government investment is likely to be required for more remote areas to benefit and where this sits in the current unenviable list of treasury priorities is unclear.  However, in the meantime, let’s hope for a speedy roll out to help drive the continued growth in the number of software and other tech businesses Polestar is seeing shifting to at least some degree of remote working.  

So for investment for the wider society, this is to be welcomed as positive, albeit that the balancing act will now fall on OFCOM to ensure the pendulum doesn’t swing too far the other way, in favour of the incumbent and hence restrict competition.