The chief executive of Ofcom has said the telecoms regulator may have to set prices so that other telecoms companies can use BT’s rural network of telegraph poles and ducts to lay superfast broadband cables.
Ed Richards has said he expects BT will set an unacceptable price for other providers to sue its telegraph poles and underground ducts and therefore will have to step in and settle the dispute.
Utility Exchange has reported that BT is in talks with telecoms and broadband providers including Talk Talk and Fujitsu over the cost of access to their telegraph poles and ducts. Ed Richards said “It would be much better if the parties could agree a commercial rate”. But he added “I think it is unlikely they will agree”.
Access to this vital network of ducts and poles is crucial for the development of high speed broadband in rural communities – important for rural businesses desperate for faster broadband and business telecoms providers. Mr Richards was being questioned by a House of Commons Select Committee for the Department for Culture, Media and Sport.
While the parties involved in the negotiations have until June to come to an agreement, Mr Richards said “If after that there is no agreement and there is a dispute brought to us, we will end up setting a price”.
The companies who want to use the poles and ducts wrote to BT saying the price they had set was unfair and it would be cheaper to build their own infrastructure. Mr Richards explained “It is a polarised issue. If price goes up it’s good for BT if it goes down it is good for everyone else, so you have to make a judgement”.
It seems unlikely that the issue will be sorted out before the end of this year. Mr Richards said if Ofcom has to make a decision on the issue then it’s unlikely to be dealt with before December. He added “We would certainly expect to consult on the range of prices we are looking at. I’m anticipating that this is something we will have to examine in considerable detail and which will end up being appealed to the courts”.
The Government won’t be happy that it’s unlikely there will be a quick resolution to the issue. The Government is keen to get superfast broadband into rural communities as soon as possible and any delay won’t be popular.
BT responded by saying “Trials of duct and pole access only began last week so it is extremely early to speculate that Ofcom might need to become involved. Our current analysis shows our draft prices compare well with those in Europe but the trial will help us see if we can go even further. We are keen to agree the final prices with industry and so we would encourage more companies to join the trial, particularly those who claim such access is essential to their business plans. It is our hope that we can reach agreement with industry on this issue”.