BT 'wants deregulation before fibre work'

BT may be prepared to spend billions of pounds rolling out high-speed fibre connections if Ofcom relaxes its Universal Service Obligation, a report has suggested.

Requirements under the USO state that BT, and in the Hull area Kingston Communications, must provide phone lines across the UK "irrespective of geographical location". They also have to give discounts to people on low incomes and provide a level of public phone box coverage.

BT is under pressure to extend its fibre-optic network closer to the home, bringing much faster connections and the potential for carrying new bandwidth-hungry services.

The Sunday Times yesterday said BT would be more inclined to make the required investment, estimated at more than £10bn, if its costs under the USO - particularly maintaining the existing copper wire network - were relaxed.

Ian Livingston, who will succeed Ben Verwaayen as BT chief executive in June, also appeared to suggest the costs should be shared with other telecoms providers.

"We will not spend material amounts of money that will guarantee that we lose money for shareholders," he said. "It’s just not going to happen.

"We want changes to the USO to reflect a fibre world. There are 200-odd service providers. Why should all the USO fall on BT Retail?"

Livingston said the regulator had already moved in the right direction: "Ofcom has been a bold organisation because it would be easier not to change things. But we still have got to move on. Things that were rigid in the past world have to be changed for the future."

Pressure on internet connections from the recent growth in online video has highlighted the need for improvements.