Broadband plays a central role in communications. It is now used by many residential and business consumers to keep in touch, access information and conduct business. Broadband now reaches the majority of households and businesses in the UK and this has been reflected in widespread take-up (there are now more than 16 million broadband connections in the UK). Competition, meanwhile, has seen providers differentiating their service offerings in terms of price, speed, quality and increasingly in terms of product bundles. A healthy retail market is however dependent on a competitive wholesale market or regulation where competition is not yet sufficient. Ofcom needs to ensure therefore that the regulatory framework at the wholesale level is appropriate given the prevailing conditions. This review aims to do that.
In the 2005 Strategic Review of Telecoms, Ofcom identified that competition based upon infrastructure tends to give the greatest benefits in terms of the mix of lower prices and faster innovation that residential and business consumers want. Ofcom, therefore, considers that competition between networks based on local loop unbundling (LLU) is crucial to maintaining the UK's broadband progress.
However, as recognised in the 2005 Strategic Review of Telecoms, LLU is unlikely to be successful in all parts of the UK. This means that in some geographic areas there is unlikely to be direct competition between broadband networks. In these areas regulation at the wholesale level is necessary to ensure that consumers can choose between differing retail offers. Conversely, in areas which benefit from competition between networks Ofcom must seek to remove unnecessary regulation.
Review of the wholesale broadband access markets (PDF, 730.3 KB) (21 November 2006)