NGA funding is a private matter

Ofcom this month published a consultation document called Future Broadband: Policy Approach to Next Generation Access that provides some insight into the role the regulator plans to play in the deployment of next-generation networks (NGNs).
Providers including BT and Colt are currently building NGNs with the aim of delivering super-fast internet access. Ofcom chief executive Ed Richards said the deployment of NGNs “is the most fundamental change for the comms industry in 20 years ­ the changes will be with us for decades”.

The term next-generation access (NGA) can be applied to cable, currently used only by Virgin Media, as well as fibre-to-the-cabinet (FTTC) and fibre-to-the-home (FTTH). With FTTC, fibre replaces the copper interconnects between BT’s street cabinets and the local exchange; while with FTTH, fibre is run to homes and services are controlled through digital subscriber line (DSL) access modules.

For providers hoping for some kind of government assistance to help them compete with BT, the Ofcom document must have seemed maddeningly noncommittal. “Intervention to secure next-generation access (NGA) investment today is premature, but should not be ruled out if circumstances change,” the document states.

This view echoes EU commissioner Viviane Reding, who believes governments have to take care not to distort competition by intervening to roll out NGA fibre networks, but can step in “if a government believes that gains from deployment of advanced networks are certain and that current services are inadequate”.

Minister for competition Stephen Timms last month also poured cold water on the idea of government funding. “It would run the risk of deterring private sector investment ­ duplicating investment that would have been made by the market, or undermining existing investment. The market must take the lead,” he argued.

Ofcom said it will publish a statement on NGA that will take into account the opinions of the “wide cross-section of stakeholders” on issues raised by its consultation document. “In the spring of 2008, we intend to publish a statement that will set out the principles that we will apply to next-generation access, as well as the way in which we will approach the application of these principles,” it said.

The need for NGA is growing, according to Quocirca analyst Rob Bamforth.
“There is an increase in user-generated/user-shared content and that means that asymmetric [high download bandwidth/low upload bandwidth] access networks, based on copper, will struggle long-term,” Bamforth said. He added that business applications, such as bi-directional high-definition videoconferencing, would also need fibre connections.