The U.K. govt. and its telecom regulator acknowledged Wed. compet...

the state of the market, the Dept. of Trade & Industry (DTI) and the Office of Communications (OFCOM) said they agreed with the panel’s findings. The responses, filed earlier this year, were released Wed. by the committee. To the panel’s concern that alternatives to British Telecom’s (BT’s) existing ADSL network won’t be widely available any time soon, DTI said cable companies’ investment in broadband- enabling networks is increasing. Moreover, it said, govt. policy provides “significant incentives” for 3G service rollouts by requiring mobile phone network operators to provide service to 80% of the population by 2007. OFCOM said one of its key objectives is to promote “the often substantial investment” needed for continued broadband deployment and upgrading infrastructure. The regulator will take appropriate actions to “create an environment where making these significant and risky investments can be appropriately rewarded,” it said. OFCOM is in the midst of a wholesale broadband access market review and will study the impact of next-generation telecoms networks, it said. The report questioned whether the govt. should invest more money in commercial broadband rollout rather than leaving it to market forces. DTI said Regional Development Agencies and Regional Aggregation Bodies will be key to bringing broadband to marginal communities by aggregating demand across the public sector. To the panel’s concern that further rollout will at some point be dependent on public sector bodies’ bringing “something to the table” -- causing BT to slow deployment to take advantage of public subsidies -- DTI said “this does not seem to be the case in practice.” Rather, it said, BT’s establishment of a trigger level program “has been remarkably effective” in increasing deployment. The committee report asked whether the market could deliver improvement in broadband speed. DTI said it expects to see next-generation services launched first in high-density urban areas, but the govt. “would not wish to down play the importance of lower-speed entry level products as a means of encouraging people to migrate from narrow band dial up Internet access to broadband.” In its response, OFCOM stressed it’s already doing several industry reviews in addition to the one on the wholesale broadband access market. But it agreed with the committee “that the time is right for a more fundamental review of the regulatory regime.” The committee report recommended that BT’s wholesale and retail arms not be split. DTI agreed, but OFCOM said it’s trying to determine the structure of the future regulatory framework, part of which is the way BT is regulated. DTI and OFCOM agreed it’s too early to consider a universal service obligation for broadband. The committee is satisfied with the responses, a spokesman told us, but may monitor the govt. and OFCOM to ensure they follow through. “It’s early days at OFCOM,” the spokesman said (the regulator took over from its 5 predecessors late last year). In Oct., the panel will take a look at the regulator’s telecom work, he said.