As is often the case, the devil is in the detail. Alistair Darling’s Budget speech did not mention Ofcom at any point. Why would it? However, there is an interesting statement of intent buried in one of the Budget reports. Particularly, in paragraph 4.41 of Chapter 4, it states:
In advance of the Digital Britain final report, the Government will review the powers and duties of Ofcom to ensure it can strike the right balance between delivering competition and encouraging investment in the communications infrastructure.
What does this mean? Does this imply that Ofcom will be pressured to accept that BT be given a regulatory holiday for any broadband roll out? That is certainly what some sources appear to be suggesting to the Financial Times.
We have also heard rumours that the Council of Ministers may also have included similar wording into the draft revised electronic communications regulatory framework currently going through the EU co-decision procedure. We will have to see what appears in the EU Parliament at Second Reading.
If this means that regulatory holidays are alive and well and living in Europe, then this is a monstrous victory by incumbents, which will arguably put back the liberalisation and development of open competition in the electronics communications sector in the EU by at least three years. The position in the UK will also be reversed. No longer will Ofcom’s position as a leading regulator be maintained, and it will destroy the equivalence of access principles developed by Ofcom in its settlement with BT that are considered in many circles to be best international regulatory practice.
Or maybe we are just being too cynical?