Ref: 51/01
Date: 18 July 2001

Balancing incentives to invest in new communications networks against the need for access by programme makers and content providers will be a key challenge for Ofcom, David Edmonds Director General of Telecommunications said today.

Inappropriate regulatory decisions could threaten the £8bn of investment planned by operators for building new third generation mobile phone networks and upgrading existing networks for broadband services, he added.

David Edmonds was speaking at a conference today on the future of communications regulation, organised by the Oxford Economic Research Association.

David Edmonds said:

"Convergence means that competition will be between an ever increasing range of digital service carried by different mobile, broadcast and cable networks.

"But due to their high cost, the number of networks will be limited. So regulation must address access to and competition between communications networks.

"Ofcom will need to balance incentives to invest and innovate with the opportunities for greater competition and the need for access by programme makers and content providers.

"Regulation by Ofcom should focus on removing structural barriers to market entry by ensuring competitors have access to the networks of companies with market power and by effective policing of anti-competitive behaviour."

David Edmonds stressed that it wasn’t simply about getting the right regulatory framework.

"Ofcom has to be about delivery, not just getting the legal framework right. It must get stuck into the detail of how markets operate and how they can be made more competitive – whether allocation of radio spectrum, the future of public sector broadcasting, or traditional telephony concerns.

"Ofcom will also need to regulate to ensure the provision of a universal service, monitor taste and decency and set technical standards.

"Getting the structure of Ofcom right will be vital to its success. Form must follow function. We need to identify the functions required of a converged regulator and only then decide a structure that will best deliver these functions."

David Edmonds said that Ofcom would need to put the best interests of consumers first when making decisions.

"Any action or decision by Ofcom must be guided by whether it is in the best interest of the consumer. That means close working with consumer groups and extensive market research.

"Ofcom should encourage competition wherever possible. Only competition will ultimately deliver the widest choice, lowest prices and new innovative products and services to consumers."

Note to Editors

A copy of David Edmonds's speech is available on Oftel’s website at www.oftel.gov.uk/press/speeches/spee0701.htm.