Lack of investment in fibre broadband down to Ofcom's mandate to get 'cheap services', says Gigaclear CEO

Communications Act 2003 didn't put enough emphasis on investing money into commercial FTTH, says Matthew Hare

A lack of investment in "pure" fibre broadband in the UK is because Ofcom's mandate for the past 12 years has focused on getting cheap communications services to consumers, according to Gigaclear CEO Matthew Hare.

Gigaclear is focused on providing fibre-to-the-home (FTTH) to rural parts of the UK, and has won three Broadband Delivery UK (BDUK) contracts - in Essex, Gloucestershire and West Berkshire - as it fights off competition from the likes of BT as well as alternative network providers such as CityFibre.

While BT has focused heavily on its fibre-to-the-cabinet (FTTC) services, which involve upgrading existing copper networks in a hybrid copper-fibre solution that it dresses up as "fibre broadband", alternative networks are focusing on implementing completely new fibre networks. BT does have its own FTTH product, what it calls "fibre-to-the-premises", but it has repeatedly suggested that there is not enough demand from consumers for FTTH to justify rolling it out nationally.

BT has also invested in "G.fast" technology - where fibre is instead rolled out to telephone poles or junction boxes located close to homes and businesses, which it claims has downstream speeds of up to 800 megabits per second (Mbps) and upstream speeds of more than 200Mbps (at least in trials). This is yet another way BT is aiming to get more out of its existing networks.

With BT winning the large majority of broadband contracts across the UK, it has the power to make a decision on how the UK will move forward in terms of broadband infrastructure. Yet despite BT's claims that the UK is ahead of its European counterparts, the UK didn't even make the Fibre-to-the-Home Council's list of top European countries for FTTH subscriptions - apparently the UK doesn't meet the current criteria which require one per cent household penetration.

"We are behind Scandinavian countries, and frankly and bizarrely we are behind Portugal and Spain as well; there are a whole bunch of countries in Europe who have more fibre deployed than we do," said Hare.

But Hare believes that this problem isn't necessarily down to BT, but is actually an issue with the Communications Act 2003.

"[The Act] basically set the mandate for Ofcom to focus on getting cheap communications services for consumers and fundamentally that is what Ofcom has been pushing for. If you push for this, then it becomes difficult to have the cheapest services in Europe but also the high investment required to deliver pure fibre services," he said.

"What we do is much more expensive than what BT does when they upgrade their cabinets to FTTC," Hare said, adding that broadband infrastructure should not be about a "short-term fix".

He suggested that the regulations should foster investment in new fibre infrastructure, and lamented the fact that this had not been the aim back in 2003.