Ofcom has opened a focused consultation to update its leased line access regulation, reflecting the increasing role of Physical Infrastructure Access in network deployment. The review covers market definitions, cost modelling, and charge controls for leased line access, PIA, and inter-exchange connectivity services.
A key proposal involves extending the buffer distance used to define the boundary between LLA Area 2 and Area 3. New evidence indicates that PIA may have a greater impact on enabling providers to build customer-specific network extensions, prompting Ofcom to reassess competitive conditions. The consultation also responds to stakeholder concerns on altnet consolidation and clarifies how such consolidation could influence competitive dynamics during the current review cycle.
Ofcom is assessing a revised approach for calculating simplified lead-in duct rental charges by updating the discount rate methodology. The regulator is further consulting on incorporating BT’s planned fibre cost reallocations, due in its 2026 RFS, into its charge control modelling. These adjustments would influence cost-based pricing for leased lines up to 1Gbit/s in LLA Area 3 and for dark fibre services both in LLA Area 3 and in SMP exchanges. As part of this update, Ofcom proposes lifting the sub-cap on Main Link service charges across Ethernet charge control baskets from CPI-0 percent to CPI+5 percent.
For low bandwidth services in LLA Area 3, Ofcom proposes a transition that allows Openreach to maintain national LLA pricing at CPI-0 percent for one year, followed by a gradual shift to cost-based pricing by the end of the TAR period. The review also considers changes to dark fibre modelling in line with BT’s revised allocation of product management component costs introduced in its 2025 RFS.
Ofcom’s analysis shows that most fibre-connected LLA end-user sites are situated within a 50 metre buffer distance, with longer routes occurring only in limited cases due to operational considerations. The broader context highlights robust investment in the UK’s gigabit-capable networks. Since 2021, the regulatory framework has supported annual full fibre investment of around £3-6 billion. This sustained spending has helped increase full fibre availability from 6.9 million premises (24 percent) to 20.7 million premises (69 percent) by July 2024. During the same period, gigabit-capable coverage rose from 11.6 million premises (40 percent) to 25 million premises (83 percent).
Competition has also strengthened as private investment accelerates. Seventy percent of UK premises now have access to at least two fixed networks, while twenty-two percent can choose from three. Full fibre adoption continues to rise, with take-up reaching thirty-five percent of premises where services are available as of July 2024.
However, Ofcom notes that commercial investment alone will not extend gigabit connectivity to all parts of the country. More remote rural regions remain underserved, prompting the need for targeted public funding. The UK Government is investing £5 billion through Project Gigabit to expand high-quality broadband to the hardest-to-reach areas. More than thirty contracts have been awarded so far, covering around one million premises, with additional procurements underway.
The consultation remains open until 17 December 2025.
Baburajan Kizhakedath
