On 26 March Ofcom published a “Review document” that announced the commencement of the Telecoms Access Review 2026 (“TAR 2026”). The TAR is the next instalment in Ofcom’s fixed telecoms market review cycle, following the decisions and principles it set out in the Wholesale Fixed Telecoms Market Review 2021-2026 Statement (“WFTMR 2021”).

The Review Document principally sets out Ofcom’s high-level approach and timetable to its next review of fixed telecoms market regulation in the UK that will be put in place for 2026 – 2031.

Ofcom is required (s.84A, Communications Act 2003) to carry out a forward-looking review of the UK fixed telecoms markets every five years that supports broadband and business connections, and the connections used by communications providers (including mobile operators), to support their services. The output of this review process is for Ofcom to determine where competition is working effectively and, where it is not i.e., it determines an operator has ‘Significant Market Power’ (“SMP”) (s.87), to design and impose appropriate regulatory remedies which provide access to the SMP operators network (which, for all intents and purposes, are Openreach and KCOM).

In the WFTMR 2021 Ofcom focused on promoting investment (where possible) through network-based competition in gigabit-capable networks. The SMP remedy design was differentiated based on the potential for competition in various geographic areas.

Ofcom sought to foster investment in areas likely to see sustainable competition against Openreach (“Area 2”). To this end Ofcom implemented a suite of regulatory remedies, including making Openreach’s physical infrastructure, such as ducts and poles, accessible to other operators throughout the UK (excluding Hull), setting access prices for the same, and conditions to prevent Openreach from using wholesale pricing strategies that could deter (or undermine) competition.

For areas Ofcom considered unlikely to see material and sustainable competition to Openreach (“Area 3”), Ofcom’s set incentives for Openreach to invest in gigabit-capable networks i.e., full-fibre in those areas by providing access to Openreach’s downstream wholesale broadband and leased lines in a way that protected outcomes for consumers.

Transitioning to the TAR 2026, Ofcom appears to double-down on its objectives of fostering investment and promoting network competition with a vision for stable and certain regulation to support long-term network investments – perhaps unsurprising giving it stated that the WFTMR 2021 included a ’10-year strategy’, a statement many have wondered at given its obligation to take a fresh look at the market in each review period. Ofcom reflects on (its view) of the significant progress made with network deployment by Openreach and ‘other companies’ since the WFTMR, with gigabit-capable networks now available to a majority (78%) of UK homes and ongoing investments, signalling continued expansion. Ofcom notes that based on the plans it has seen for network deployment, 94% of premises will have gigabit capable coverage by 2026.

Ofcom (arguably) has indicated a shift in its focus slightly for the TAR, from primarily addressing Openreach SMP to considering the relative success and competitive impact of an expanded wider pool of ‘alternative network’ providers (so called ‘altnets’) than previously considered in the WFTMR 2021. Ofcom seems likely to say this is consistent with its view of the success of the framework and part of the ’10-year’ strategy established in the WFTMR 2021 for promoting network investment.

The Review Document also highlights a strategic shift in Ofcom’s assessment of measuring effective and sustainable competition, emphasising not only the deployment of gigabit-capable networks but also the critical importance of promoting conditions conducive to promote take-up of these networks across both retail and wholesale markets. Ofcom recognises that sustainable competition and the success of network investments depends significantly on consumer adoption.

As Ofcom points out, the regulatory decisions it comes to in the TAR will:

“underpin the broadband and business connections, and the connections used by communication providers, including mobile operators to support their services”.[1]

As such participation and engagement in the market review process will be of vital importance to stakeholders operating in and/or affected by these regulatory decisions.

Operators and Ofcom will have to consider and engage on a suite of complex issues. This Review Document almost immediately raises a few questions of its own including:

• What impact does the relative success of altnets and recognition of this success by Ofcom, have on Ofcom’s approach to market definitions, SMP findings and remedy design Ofcom is considering?

• How will Ofcom approach the issue of take-up, and what impact will that have on defining and therefore assessing ‘effective competition’?

• What will Ofcom’s approach to regulation be in areas which Ofcom considers effectively competitive i.e., ‘Area 1’? To what extent will this have an effect on SMP findings, how will Ofcom approach the issue of deregulation and what alternatives will Ofcom consider so as to limit the risk of a regulatory lacuna being left behind (e.g. will it consider symmetrical forms of regulation or something like the French ARCEP ‘mutualisation’ model).

More broadly, there is an interesting contrast between the picture Ofcom paints of the success of UK ex ante telecoms regulation and consequent network build and coverage vis a vis the picture of the European Commission set out in its recent White Paper “How to master Europe’s digital infrastructure needs?” which paints a bleaker picture of similar markets across Europe as the basis for a proposed approach not vastly dissimilar.

Both Ofcom’s Review Document and the EC Whitepaper give a nod towards the potential for a further deregulatory trajectory at the wholesale level, for very different reasons – the EC approach seems to align with more of an aspirational desire to make way for the development of ‘pan-European network roll-out’ while Ofcom’s approach appears based on a more factual based, traditional assessment of the level of competitive constraints it observes that are posed by (existing) rival networks.

Overall, the ‘Review Document’, a novel type of publication for Ofcom in itself, should still principally be viewed as a scene setter for the direction Ofcom intends to take for the next review process and a clear signal to industry that the review is well underway (in case you haven’t already been lucky enough to receive a section 135 information request).

Given the next market review period begins from April 2026, Ofcom is likely planning to publish its final statement in early/mid-March 2026. Working backwards, Ofcom may be expected to publish its main consultation document in late 2024/early 25, which typically runs for 12 weeks i.e., closing in April. Ofcom is then likely to publish a further consultation on remedies towards the middle of the year that will likely run for a further 8 or 12 weeks. That brings us to somewhere around October 2025 when Ofcom will aim/try to start to pull down the shutters on taking into account any further substantive input that is inconsistent with its direction of travel.

However, history shows that Ofcom can be expected to formulate the foundation and majority of its substantive views (at least in principle) well ahead of publication of the main consultation(s) through its information gathering and early analysis of the markets. As a consequence, for stakeholders to (i) ensure their issues, characteristics and desires are either fully taken into account and addressed in the process leading up to the main consultation and final regulatory decision and/or (ii) ensure they have laid down their markers in the event they wish to later challenge Ofcom’s final decision, the time is nigh.

Our experience is the earlier the engagement by operators the better to have the most impact on Ofcom’s considerations, which are sometimes disproportionate to current market positions, especially in relation to innovation and solid business plans. Ofcom will be fully reliant on industry input to provide a picture of commercial reality in the various markets which it will use to underpin and shape the regulatory framework that it is already in the process of designing for the next five-year market review period. It is therefore imperative that operators and stakeholders fully engage in the process as early as possible to ensure the greatest impact and longest possible trail of markers are laid before the shutters actually come down.

References

[1] Page 3 of the Review Document.