Source · Select Committees · Public Accounts Committee
Recommendation 21
21
The National Audit Office was concerned that greater competition in the broadband infrastructure market would...
Conclusion
The National Audit Office was concerned that greater competition in the broadband infrastructure market would not necessarily lead to a greater choice of internet providers for consumers. In its report, it explained that in areas that needed subsidy, smaller alternative infrastructure providers could gain dominant positions. Its report also set out a risk that more popular internet providers may not find it commercially attractive to 48 Department for Digital, Culture, Media & Sport, Future Telecoms Infrastructure Review, July 2018. Available at https://www.gov.uk/government/publications/future-telecoms-infrastructure-review 49 Q 27 50 Qq 26–27, 38–39 51 C&AG’s Report, paras 3.2–3.6 52 Q 40 53 C&AG’s Report, para 3.17 54 Qq 35, 159 55 Q 155 14 Improving Broadband offer their services over many different networks and that consumers, particularly in rural areas, could be left with limited choice.56 The Department told us that it was aware of the risk but said that the contracts for its Superfast Programme enabled wholesale access to a range of internet providers.57 It explained that work was underway outside of government to create a platform to make it easier for internet providers to supply their services over alternative networks but provided no information about when this would be ready.58
Government Response
Acknowledged
HM Government
Acknowledged
6.1 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2021 6.2 The department’s proposed contracts include an annual wholesale access price benchmarking requirement. Pricing is compared to the Ofcom regulated price and benchmarked against the department’s pricing database with only reasonable justifications allowed. Where pricing is deemed too high against market benchmarks, the department will require suppliers to revise pricing, ensuring consumers in areas benefiting from public subsidy will be protected from overcharging. 6.3 When scoring bids from suppliers for projects with support from public funding, there will be an evaluation of the quality of their Retail Service Providers (RSP), including the number of RSPs that will use the infrastructure built, product offering and pricing to end customers. In most commercial areas, there is significant competition at the retail level with a number of Internet Service Providers offering broadband services to consumers. 6.4 The government is also working with Ofcom to increase network competition and commercial investment in gigabit capable broadband. The Government’s analysis is that up to 80% of premises in the country are likely to be able to support two gigabit capable networks and that around a third of premises will be able to support three gigabit capable networks. If network monopolies do emerge in these more commercial areas, Ofcom has the regulatory powers to address them. 6.5 In addition, to help support retail competition over smaller networks, government is working with industry to facilitate standardisation and aggregation of operators’ wholesale networks to make them more attractive for retail internet service providers to offer their services on top of them.