Ofcom has recently offered financial reassurances to companies such as BT and Virgin Media if they choose to invest in setting up high-speed fibre optic networks across the UK. If the companies carried out the works, it would bring the country much closer to the next generation of super fast broadband speeds.
At the moment, UK broadband runs on a slow copper wire network. However, as our browsing habits change and more music and films are downloaded, the need for faster connections is becoming ever more important. Fibre optics would create faster speeds and increase the capacity for larger downloads.
The problem so far with investing in fibre optic cables is that it is a very expensive process, which neither BT nor any of the other companies in this area has been prepared to carry out. It is estimated that it would cost £15 billion to install a network and the main fear is that the companies will not be able to charge the prices that they would need to in order to recoup their investments.
However, Ofcom has now stated that it wants a “regulatory environment” that “both allows and encourages operators to make risky investments”. In other words, it will not change the rules further down the line to punish the providers financially when the new cables are installed.
The aim is to encourage operators to develop the new infrastructure without having to take big financial risks, and would essentially allow BT to operate the fibre optic cables whilst charging large amounts to users of the lines.
If the new network is constructed, internet users in the UK will finally be able to download at the same speeds as other countries such as Japan and France and UK businesses will become more competitive as a result.
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