On 20 March 2025, Ofcom published its consultation on the Telecoms Access Review (TAR) 2026-2031. This consultation sets out Ofcom’s proposed regulatory framework for fixed telecoms markets from April 2026 to March 2031, which aims to promote competition and investment in gigabit-capable broadband networks. The consultation is open for responses until 12 June 2025.
Ofcom's role
The Office of Communications (Ofcom) is the UK's regulatory authority for broadcasting, telecommunications, and postal services. Established under the Communications Act 2003, Ofcom's primary responsibilities include ensuring fair competition, protecting consumers, and promoting investment in high-quality communications infrastructure. One of its key responsibilities is setting the regulatory framework for telecoms providers, including BT Openreach, which (in part for legacy reasons) operates the UK’s largest broadband network.
Background to the Consultation
Since the last Wholesale Fixed Telecoms Market Review (WFTMR) in 2021, the UK has seen substantial investment in the roll-out of full-fibre broadband infrastructure, to the tune of £3-6bn each year. As a result of both private sector and publicly-supported investment in infrastructure over 83% of UK households now have access to gigabit-capable broadband (up from 40% in 2021), and 69% have access to full-fibre broadband (up from 24% in 2021). Inevitably though the lowest hanging fruit has been picked first and the challenge will be greater to extend the benefit of full-fibre broadband to the rest of the country.
Ofcom's consultation recognises that further investment will be required to ensure nationwide coverage and a sustainable competitive market. Its Telecoms Access Review 2026-2031 seeks to build on this progress, ensuring that regulatory measures continue to carefully and appropriately balance the establishment of competitive market conditions while facilitating investment in advanced digital infrastructure.
Key Proposals in the Telecoms Access Review
Ofcom is consulting on a number of key proposals:
1. Continued regulation of Openreach and imposition of Physical Infrastructure Access (PIA) requirements
Ofcom considers that Openreach retains significant market power (SMP) in several markets, warranting continued regulation. Ofcom proposes that Openreach will continue to be required to grant access to its telegraph poles and underground ducts through its Physical Infrastructure Access (PIA) products. This requirement ensures that alternative network operators (altnets) can build their own fibre networks using Openreach infrastructure, and that Openreach will be required to give access on a non-discriminatory and marginal cost-recovery basis to support market competition.
2. Maintain a geographically variable approach to wholesale broadband regulation
Ofcom will continue to regulate wholesale broadband differently across the UK, reflecting varying levels of competition. Two distinct geographic areas have been defined (named Areas 2 and 3 on the basis of a purely hypothetical Area 1 where market competition is functioning properly):
- Area 2 (90% of UK premises): Where material and sustainable competition is present or likely to emerge, regulation will focus on encouraging alternative providers while maintaining protections for consumers. Price caps on basic broadband will be maintained but adjusted to cover services supporting up to 80mbps instead of the previous 40mbps limit. The proposed coverage of this area expands from 70% to 90% of UK premises, reflecting increased network investment.
- Area 3 (10% of UK premises): Where competition is not and is unlikely to be material or sustainable, regulation will ensure Openreach can recover reasonable costs while protecting consumers through continued wholesale price caps.
3. Pricing and competitive safeguards
To prevent behaviour that may adversely affect the emergence of greater competition, Ofcom proposes to extend restrictions on Openreach’s pricing strategies including by restricting its ability to offer discounts in some geographic areas but not others, and by requiring Openreach to give 120 days' notice (up from 90 currently) of any new commercial terms that it offers to customers.
4. Transition from copper to full-fibre networks
As Openreach continues to roll out full-fibre networks, Ofcom will support a gradual transition away from legacy copper networks by transitioning regulatory obligations such as price controls from copper to fibre, ensuring that Openreach is not required to maintain two parallel networks at unnecessary cost.
5. Geographically variable regulation of leased lines and dark fibre
Leased lines provide essential high-capacity connectivity for businesses. Ofcom proposes differentiated regulation based on market conditions:
- High Network Reach (HNR) Areas (9% of UK postcode sectors): Where there is significantly more competition in the leased lines market, but Openreach still has SMP, it must provide leased lines at fair and reasonable prices.
- Area 2 (42% of UK postcode sectors): Where there is currently, or there is likely to be the potential for, material and sustainable competition, Openreach will be required to provide leased lines under inflation-adjusted price caps.
- Area 3 (46% of UK postcode sectors): Where there currently is not, and there is unlikely to be potential for, material and sustainable competition, Ofcom will continue to require Openreach to provide dark fibre access on a cost-based model. In addition, Ofcom proposes to continue to require Openreach to provide access to its active leased lines services.
6. Inter-exchange connectivity (IEC) market reforms
Ofcom proposes deregulation of exchanges with two or more competing providers, while exchanges with one or no competitors will require Openreach to provide dark fibre at cost-based prices. This is intended to promote competition where it can be promoted and prevent excessive pricing where competition will not achieve that on its own.
7. Quality of service (QoS) standards
Ofcom will maintain existing service quality obligations for Openreach, requiring timely repairs and installations. Adjustments will be made to reflect the decline of copper-based services, with new backstop standards proposed in areas where consumers rely solely on Openreach’s fibre network.
8. Future regulatory approach beyond 2031
Looking ahead, Ofcom acknowledges that investment in full-fibre networks will take a significant amount of time to provide a commercial return. Future regulation will depend on the competitive landscape at the time, but Ofcom intends to uphold its "fair bet" principle, ensuring Openreach can recover investment costs while maintaining competition and consumer protections.
Consultation process and next steps
Ofcom's proposals as a whole can perhaps be seen as reflective of the new "pro-growth" approach that the UK Government is loudly requiring of the UK's various economic regulators. Like the Competition and Markets Authority and others, Ofcom is aiming to continue to promote competition where possible, and take regulatory interventions where necessary and appropriate, but to do so in a way that makes investing in new UK broadband infrastructure attractive.
The consultation is open for responses until 12 June 2025. Stakeholders, including telecom providers, consumer groups, and businesses, are encouraged to participate by submitting their views via Ofcom’s consultation response form. Final decisions are expected to be published in March 2026.
If you would like assistance with responding to the consultation, or to discuss any of the matters discussed in this blog, please do not hesitate to get in touch with Jamie Dunne, another member of our Telecoms team, or your usual Brodies contact.
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