Original article ISPreview UK:
The national telecoms regulator, Ofcom, has today published their proposals for the new Telecoms Access Review 2026 (TAR), which it hopes will help to “promote competition and investment” in gigabit broadband and business connectivity. Broadly speaking, the regulator will be updating and tweaking their existing approach, with few radical changes this time around.
The regulator only conducts a single holistic review of the markets for both Business Connectivity (i.e. Leased Lines / Ethernet and Dark Fibre etc.) and the more residential focused Wholesale Local Access (i.e. broadband products like FTTP and FTTC etc.) sector every 5 years, which makes this very important. The review also covers inter-exchange connectivity (IEC) and wholesale access to existing physical infrastructure (PIA etc.).
NOTE: Ofcom states that their last review helped to push gigabit-capable broadband to cover more than 25 million UK homes (83% of the UK) and full fibre (FTTP/B) to 20m (69%). But they predict full fibre alone could reach 96% by 2027 “with the right regulation and support“.
The last review, which was published in March 2021 (here), introduced lots of changes, such as regulation of Openreach that varied by geography, a new Dark Fibre Access (DFA) product, measures to help retire legacy copper line networks (ADSL, analogue phone etc.), limited restrictions on broadband discounts and new Quality of Service (QoS) standards.
Some of those changes helped to accelerate the roll-out of Fibre-to-the-Premises (FTTP) coverage across the UK, which has been supported by a wide mix of alternative networks (Summary of UK Full Fibre Builds), albeit with the likes of Openreach, Virgin Media (inc. nexfibre), CityFibre, Netomnia (inc. Brsk), CommunityFibre and Hyperoptic having the biggest impacts. But many operators have recently suffered a slowdown due to the worsening economic climate (high interest rates, rising build costs and aggressive competition etc.).
Ofcom’s latest review will thus face a particularly difficult challenge because they will need to avoid doing anything that might upset the current inward flow of investment, particularly while that flow is already under strain.
Ofcom’s TAR 2026 Proposals
The regulator has spent the past year gathering evidence on the state of the current market and industry feedback, which has today resulted in the publication of their first tentative proposals for the next Telecoms Access Review 2026 (TAR).
The goal of all this remains the same as it was before, which is “incentivising investment and promoting network competition.” But as usual it means that Ofcom still has the incredibly difficult job of trying to balance the many competing (vested) interests of different operators, and inevitably there will always be winners and losers.
Summary of the Key TAR 2026 Proposals
We are proposing that BT has significant market power (SMP) in a number of markets, and so are proposing a regulatory framework to address the competition concerns that arise as a result.8 Our proposed remedies are the same as in our last review, except where recent or prospective market developments indicate an update is necessary to provide regulatory stability and maintain incentives for investment and network competition. Our proposals are:
➤ Maintaining access to Openreach’s telegraph poles and underground ducts:
We propose that Openreach will continue to be required to allow all network operators to deploy and operate their own fibre networks using its infrastructure through its Physical Infrastructure Access (PIA) products. To ensure a level playing field between Openreach and other network operators, we propose that Openreach will continue to be subject to a strict no undue discrimination obligation and that the charges paid by other operators should reflect a fair share of Openreach’s costs, based on their use of Openreach infrastructure. While our approach to PIA rental charges is broadly consistent with that set out in 2021, we have made some adjustments to ensure that there is a level playing field.
➤ Continuation of our approach to regulating wholesale broadband differently in different parts of the UK, to reflect the potential for effective network competition:
We recognise that competitive conditions are different across the UK for the supply of wholesale broadband services, and so propose to maintain our overarching approach to reflect this. While we have seen significant network investment since 2021 by rivals to Openreach, we do not think there are any areas yet where competition is sufficiently well-established or effective (i.e. ‘Area 1’). We therefore propose to define two distinct geographic areas:
• Area 2, where there is, or there is likely to be potential for, material and sustainable competition. We propose that this area is expanded from 70% to cover 90% of UK premises, reflecting more widespread build (actual and planned) by altnets than envisaged in 2021. We propose to continue setting regulation that promotes investment and competition by alternative providers (including maintaining a stable regulatory environment for those investments already made), while also providing protection to consumers as competition develops.
We propose to do this by continuing to set flat, inflation-adjusted prices for a basic superfast broadband product whilst allowing flexibility on pricing for other speed services. To ensure this price cap remains effective, we propose to move the regulation from Openreach’s products that support download speeds of up to 40 Mbit/s to those supporting up to 80 Mbit/s, in line with changes in the market driven by the increasing use of data by consumers.
• Area 3, where there is not, and there is unlikely to be potential for, material and sustainable competition. In the remaining 10% of the UK, we will continue to focus on allowing Openreach the opportunity to recover the reasonable costs of its investments in rolling out its full-fibre network commercially, but recognise the important role public subsidy will play in rollout in this area.
We also seek to promote competition based on access to Openreach’s network to protect consumers. As in Area 2, we propose to move the price cap regulation from Openreach’s products that support download speeds of up to 40 Mbit/s to those supporting up to 80 Mbit/s, and set flat, inflation-adjusted prices for these products.
➤ Fair wholesale prices for Openreach and other networks:
While Openreach is able to make its full-fibre services attractive to its Internet Service Provider (ISP) customers, we propose to maintain restrictions on deals that could stifle investment and the development of sustainable network competition. Specifically, we propose to continue to restrict Openreach’s ability to set geographic discounts and to extend this to cover all charges (not just rental charges as in the previous review).
We are also concerned that Openreach could offer commercial terms that deter ISPs from using competing networks, depriving these networks of demand and undermining the development of network competition in the long run. We propose that Openreach should continue to be required to give notice of the introduction of certain commercial terms, and that this notice period be extended from 90 days to 120 days. This allows us to assess any deals before they take effect. We are also providing updated guidance on the types of commercial offers that we might consider to be problematic.
➤ Supporting migration from legacy networks and exchange exit:
As Openreach lays a full-fibre network to replace the ageing copper network, it should not have to incur unnecessary costs in running two parallel networks. We propose to continue our support for a gradual transition away from Openreach’s copper-based network, while facilitating the wider objectives of this review, including promoting network competition and protecting consumers. We propose to progressively transfer regulation (including price protections) from copper to full-fibre services in line with the approach set out in 2021.
Openreach will also start to exit exchanges during this review period and is currently negotiating with its customers on specific terms of exit. We are supportive of Openreach’s objectives, which provide the opportunity for both Openreach and other providers to consolidate infrastructure, reduce energy consumption and increase efficiency. We are proposing to maintain our existing regulation where appropriate, to mitigate risks to competition and consumers during this review period, as well as proposing changes to rules for services that connect exchanges together, to reflect exchange exit.
➤ Continuation of our approach to regulate leased lines differently in different parts of the UK, to reflect the level of current or prospective competition:
We recognise that competitive conditions are different across the UK for the supply of leased lines services, and we propose different market boundaries compared to wholesale broadband services reflecting differences in how the markets have developed since 2021. We are not revisiting our previous assessment of the Central London Area (CLA), which has been deregulated since 2019. Elsewhere, we propose different regulation in different areas as follows:
• High Network Reach (HNR) area, where there is significantly more leased lines network competition, but BT still has SMP. In this area, which covers 9% of UK postcode sectors, we propose that Openreach should provide access to its leased lines services at fair and reasonable prices.
• Area 2 where there is, or there is likely to be the potential for, material and sustainable competition. In this area, which covers 42% of UK postcode sectors, we propose to continue to require Openreach to provide access to its active leased lines services, and to set flat, inflation-adjusted price caps.
• Area 3 where there is not, and there is unlikely to be potential for, material and sustainable competition. In this area, which covers 46% of UK postcode sectors, we propose to continue to require Openreach to provide dark fibre and to set prices based on its reasonable costs. In addition, we propose to continue to require Openreach to provide access to its active leased lines services. For higher bandwidth active services, we propose to maintain flat, inflation-adjusted price caps while the market transitions to dark fibre. For lower bandwidth active services (1 Gbit/s and below), we propose to reduce prices in line with costs as dark fibre is a less attractive alternative than we expected in 2021.
➤ Inter-exchange connectivity (IEC) market:
IEC services are used by telecoms providers to connect BT exchanges located in different geographic areas in order to deliver traffic between their customers and their own networks. IEC services typically use similar products to those in the leased lines access market, such as leased lines at different bandwidths and dark fibre. We propose to deregulate exchanges where there has been an increase in competitor presence since our last review such that Openreach now faces two or more competitors.
In cases where Openreach faces one or no competitor at an exchange, we propose to require Openreach to provide dark fibre, with prices set to reflect reasonable costs. Compared to our approach in 2021, this extends the availability of dark fibre to exchanges where there is one competitor present or nearby, because we do not expect further material competitive investment in these exchanges.
Our proposals seek to promote competition through access to dark fibre, which we consider to be an attractive remedy for IEC services, and to protect consumers from high prices. We also propose to continue to require Openreach to provide active IEC services from these exchanges and propose to set flat, inflation-adjusted prices.
➤ Quality of service (QoS):
We are proposing to broadly maintain the existing rules for how quickly Openreach must carry out repairs and installations of its main network access products in regulated markets including copper-based broadband, Ethernet and dark fibre. However, to reflect the decline in Openreach’s copper-based broadband services over the review period, we are proposing an adjustment in how performance is assessed. Where customers have no choice but to rely on Openreach for their full-fibre broadband services (i.e., Area 3), we are proposing new backstop QoS standards.
➤ Our approach beyond 2031:
Consistent with the approach we set out in 2021, we recognise that the investments being made by all network operators in gigabit-capable networks have long payback periods and material competition takes time to develop and become sustainable. While our future decisions will depend on the circumstances that exist when we carry out our next reviews, we are reiterating how we would approach future decisions. If we consider that investment and sustainable competition are still in the process of emerging beyond 2031, we would expect to continue to regulate in a way that continues to support this.
If there is a need to move to cost-based regulation of Openreach in the future, we will honour the fair bet principle. This means that in setting any price controls, we would expect to allow BT to keep the upside (i.e. returns in excess of its cost of capital it has earned up to that point), as well as ensuring it can earn its cost of capital going forwards. This means that BT would have the opportunity to earn a return above its cost of capital over the whole fibre investment cycle.
Overall, Ofcom appears to have chosen to maintain much of what their 2021 review introduced, albeit with some big tweaks here and there to reflect natural changes in the market and current levels of network coverage / competition. Some notable changes include the shift to take Openreach’s 80Mbps (20Mbps upload) tier on FTTP/C as the regulated product instead of 40Mbps. Many ISPs already view 80Mbps as their entry-level, but the impact of this will be limited, particularly for those still stuck on slower FTTC lines as the only option.
Ofcom also appears to have got a little bit tougher on Openreach’s ability to discount the wholesale price of their FTTP broadband products for ISPs, which could have implications for a hypothetical “Equinox 3” price cut in the future. But the regulator hasn’t completely blocked this avenue, so it remains to be seen how the operator and rivals will respond.
Alternative networks, which are carrying a lot of financial risk, often complain that any price cuts by Openreach makes it harder for their own rival FTTP networks to gain a return on their investment – allowing the incumbent to use its scale against them. On the flip side, Ofcom can’t completely block Openreach from responding to the growing competition, particularly as they lose hundreds of thousands of broadband lines to altnets each year and consumers benefit from such competition via lower prices.
However, one potential risk in the changes could yet stem from Ofcom’s decision to identify more of the UK as being competitive, which is understandable given the rise in competing networks. But at the same time it may serve, in those new areas now deemed to be competitive, to soften some of the protections that altnets previously enjoyed vs Openreach. We are still assessing this as the documents are extremely long and complex.
Natalie Black, Ofcom’s Group Director for Networks and Communications, said:
“The roll out of full fibre across the UK is a British infrastructure success story. Four years ago, less than a quarter of UK homes and offices had access, and it now stands at nearly seven in 10. But we do not take this momentum for granted, and today we are setting out how we can work with the sector to finish the job.
It means that people and businesses in nearly all corners of the country will get faster, better broadband, fuelling economic growth and enabling technologies like artificial intelligence to benefit everyone.”
On the surface we couldn’t spy any truly radical or massive surprises, which is to be expected as the rules that Ofcom set down in 2021 were largely designed to foster a stable market for the next decade (i.e. Ofcom seem to be keeping their options open for bigger changes in the next post-2031 review). But on the other hand, the regulator’s review is MASSIVE (many hundreds of pages) and devils can often be found in the detail, which may take us more time to fully uncover.
The closing date for this consultation is 12th June 2025 and Ofcom then intend to publish their final decisions in March 2026.
Ofcom’s Telecoms Access Review 2026 (TAR) Consultation
https://www.ofcom.org.uk/../consultation-promoting-competition-and-investment-in-fibre-networks-telecoms-access-review-2026-31/
