Prospect puts investment case to Ofcom

Ofcom needs to change its approach to the regulatory framework governing the communications infrastructure so as to prioritise network investment and roll-out, Prospect has argued today.

Prospect’s views were put to Ofcom in our initial response to the published terms of reference for the authority’s Strategic Review of Digital Communications. This Review, launched prior to the general election, is intended to consider the UK’s digital communications infrastructure and provide recommendations on a series of questions designed to ensure that the regulatory framework is fit for purpose and continues to deliver benefits to UK citizens. Prospect will engage in the Review in full.

We have today published our opening response, which comes in the form of a letter to Ofcom setting out the five main points we believe the Review needs to confront.

Our response challenges Ofcom to reinvigorate its approach to the regulation of the industry and to put investment at its heart. We argue that the essential question facing the Review is the need for regulatory policy to be cognisant that there is only one operator – BT – which is equipped to deliver a nationwide infrastructure for what is now considered to be an essential service, and that regulation needs to ensure the delivery of such a network, based on open access and on fair and non-discriminatory terms, with everything else capable of being left to the market. It is the delivery of the infrastructure, on cohesive terms throughout the UK, that we know that the market will not provide by itself.

We also argue that such a response should lead Ofcom to ignore calls for the structural separation of Openreach.

‘Breaking up BT, as its rivals would like Ofcom to do, would be a disaster for consumers and for this country,’ said Ben Marshall, Prospect National Secretary. ‘Not only would it interrupt the considered investment drive on which BT is embarked, delivering the future of communications in this country, it would actually set the regulatory framework on a collision course with a major driver of the UK’s economic growth,’ continued Ben. Prospect believes that the quality and speed of the communications infrastructure is essential to the UK’s future prospects for jobs and skills.

Prospect is pleased to see that Ofcom is open to a review of the direction its regulatory initiatives have taken in the context of their impact on investment. ‘Nevertheless,’ concluded Ben ‘We will be using all our efforts to seek to ensure that the framework focuses on that and ignores sideshow issues.’