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Ofcom allows BT to charge more for full fibre so it can fund UK-wide rollout

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In a long-awaited announcement, it said Openreach’s fastest fibre services would continue to be free of pricing regulation, while it would be allowed to charge slightly more for its regulated products delivered over full fibre instead of copper.

“This approach improves the investment case for BT and its rivals by providing them with a margin to build the new networks,” Ofcom said.

The regulator recognised BT’s argument that, to persuade its shareholders to fund the rollout of full fibre, it had to be able to promise them a decent rate of return in the years ahead.

“We recognise that full fibre is a long-term investment,” Ofcom said. “taking more than a decade – if not two – to pay back.

“So, we aim to allow all companies the opportunity to achieve a fair return over their whole investment period, and do not expect to introduce cost-based prices for fibre services for at least 10 years.”

In what appeared another win for BT, the regulator said it should not have to fund the unnecessary costs of running old copper networks in areas where it has laid fibre. Ofcom said it would remove regulation on copper where fibre has been laid over the coming years, meaning BT does not have to invest in maintaining the old technology.

Ofcom chief executive Dame Melanie Dawes said: “Over the past year, being connected has never mattered more. But millions of homes are still using the copper lines that were first laid over 100 years ago. Now it’s time to ramp up the rollout of better broadband across the UK.”

She said the rules created the right conditions for companies “to step up and invest in the country’s full-fibre future.”

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