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Ofcom today announced Phase 1 of its Strategic Review of Telecommunications.
The Review is the first wide-ranging analysis of the sector for 13 years and
will set out Ofcom's perspectives on the future evolution of the UK
telecommunications industry.
The Review will have three phases. The Phase 1 consultation examines the
prospects and challenges for the sector now and over the next ten years. In
the autumn, Phase 2 will propose and consult on the policy options and
choices facing Ofcom. At the end of the year, Phase 3 will assess responses
to these options and present Ofcom's recommendations and future approach.
The Review will address five fundamental questions, on which the Phase 1
document seeks initial views. The five questions are:
Question 1: What are the key attributes of a well-functioning telecoms
market in serving the interests of citizen-consumers?
Question 2: Where can effective and sustainable competition be achieved in
the UK telecoms market?
Question 3: Is there scope for a significant reduction in regulation, or is
the market power of incumbents too entrenched?
Question 4: How can Ofcom incentivise efficient and timely investment in
next generation networks?
Question 5: At varying times since 1984, the case has been made for
structural or operational separation of BT, or the delivery of full
functional equivalence. Are these still relevant questions?
Future Evolution
Telecoms is changing rapidly. The Phase 1 consultation seeks stakeholders'
views on these emerging changes, their impact on competition, and therefore
their significance for future regulatory strategy. These emerging changes
are:
Competition in voice services: In future, they may be different kinds of
competition in voice services. Competition between fixed line operators and
mobile operators is likely to increase as callers are increasingly happy to
use either kind of network to make calls. Voice over IP (Internet Protocol)
may also shift traditional sources of market power as it allows new types of
supplier into the market.
Demand for broadband: The consultation explores the future growth of
broadband, and considers whether in future there may be scope for new,
competing access technologies beyond DSL and cable, possibly offering much
faster access speeds.
Evolution in network design: The consultation also sets out to explore the
impact on competition of future changes in network design. As networks
increasingly use Internet Protocol (IP), this may change the scope for
competition between them. Other changes in network design are important too.
As networks increasingly use open standards like IP, and as intelligence
grows in the devices connected to networks, the focus of regulation may need
to shift towards control over technical standards and interfaces.
Realignment in the telecoms industry: Many experts also predict
consolidation, alliances, market entry or other forms of evolution in the
telecoms industry. The consultation seeks views on these changes and their
possible impacts.
Universal service arrangements: All of these changes may have implications
for the continued delivery of certain services on a universal basis to all
citizen-consumers. We may need to think again in future about how we
identify and fund universal service obligations.
Finally, Ofcom asks a number of questions about how regulation itself could
affect growth of the sector. It is important that appropriate investment in
the sector is encouraged, and that Ofcom strikes a balance between
protecting consumers from unscrupulous suppliers and allowing innovation and
choice.
Ofcom Chief Executive Stephen Carter said:
"The Review seeks to answer the five fundamental questions regarding
sustainable competition, regulatory role, investment incentives, structural
arrangements and the citizen-consumer interest.
"Following on from the implementation of the new EU Framework, it seeks to
establish an approach for the next generation of telecoms investment and
innovation."
The full consultation document is available on Ofcom's website at
http://www.ofcom.org.uk/consultation...lecoms_review/ together with a
Plain English Summary. The closing date for responses is Tuesday 22 June
2004.
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Regards
Sunil
(followup's set to uk.telecom only)
