Ofcom has announced measures to promote investment in new fibre networks and protect customers from higher prices.
An Ofcom statement said, 'We plan to protect broadband customers and promote competition by cutting the wholesale price that Openreach charge telecoms companies for its superfast broadband service which has a download speed of up to 40 Mbit/s. We would expect these savings to be passed on to residential customers through cheaper prices. This promotes competition in the superfast broadband service most used today by consumers, while companies construct their own full-fibre ultrafast networks to compete with Openreach'.
The regulator proposes to maintain its policy of pricing flexibility for Openreach's fastest broadband products, including those based on BT's own network investments in full-fibre and its new G.Fast technology.
The new rules would also include stricter requirements on Openreach to repair faults and install new broadband lines more quickly.
Jonathan Oxley, Ofcom's Competition Group Director, said: "Our plans are designed to encourage long-term investment in future ultrafast, full-fibre networks, while promoting competition and protecting consumers from high prices.
"People need reliable phone and broadband services more than ever. We're making sure the market is delivering the best possible services for homes and business across the UK."
While protecting consumers Ofcom wants to provide incentives to invest in ultrafast networks, while promoting competition and protecting consumers from high prices.
As more people continue to take superfast broadband over the coming years, Ofcom's analysis shows that the most important package will be one offering a 40 Mbit/s download speed, and 10 Mbit/s upload speed.
Until now, BT's ability to raise prices has been constrained by people's willingness to consider cheaper, standard broadband as an alternative. However, this constraint is weakening, as people require faster, more reliable connections to support a new generation of online services.
So Ofcom intends to reduce Openreach's charges for its '40/10' Mbit/s broadband package, with the price falling from today's level of £88.80 per year to £52.77 in 2020/21. Ofcom expects much of this reduction to be passed through by retail providers to their customers, resulting in lower bills.
Ofcom said that it is not proposing to cap Openreach's wholesale charges for its higher-speed packages including its planned new G.Fast network, as it expects the cap on the 40/10 Mbit/s package should be sufficient to protect competition and protect consumers from higher prices.
Where faults fall on Openreach to fix, Ofcom is proposing that it will in future be required to complete 93% of fault repairs within one to two working days of being notified, compared with 80% today. Ccomplete 97% of repairs no later than six or seven working days; provide an appointment for 90% of new line installations within 10 working days of being notified, compared to 80% within 12 days currently; and install 95% of connections on the date agreed between Openreach and the telecoms provider, up from 90% today.
These new requirements would need to be met in full by 2020/21. Ofcom has also proposed transitional targets to ensure progressive improvements in service before then. Ofcom will monitor Openreach's performance closely and step in if the required standards are not met.