Ofcom has launched a consultation that probes next generation broadband networks, with particular focus on whether the UK requires a nationwide fibre network.

The UK government communications regulator is also making its initial proposals for future regulation of the broadband market.

The regulator notes that broadband has become a mass-market service, with providers other than BT offering services over three million unbundled broadband lines and Virgin Media offering a service to 50 per cent of the country over cable.

Ofcom reveals that ninety-nine per cent of the UK is connected to a broadband-enabled exchange, and claims over half of UK households have implemented broadband. Ofcom also notes that broadband prices have fallen by 9 per cent in the last twelve months.

But broadband take-up on such a massive scale is putting great demand on current copper-based networks, with ISPs implementing technology to deliver faster speeds over existing networks.

The regulator warns that the development and consumption of high speed services means current generation networks will at some point be unable to deliver the very high speed broadband service customers may demand.

Ofcom’s consultation highlights how the market and infrastructure conditions in the UK are very different to those countries where investment in fibre has already been strong.

The regulator accepts that the deployment of UK-wide fibre channels could have a major impact on the economy and on UK consumers, and notes the need for regulatory clarity in support of any investment in such infrastructure.

Ofcom wants to encourage competition while leaving plenty of opportunity to innovate in the market, and concedes whatever regulation it does put in place must also reflect the "significant commercial investment risk" associated with deploying next-generation networks

Ofcom CEO Ed Richards said: “Investment in next-generation access will represent a substantial commercial risk and the market should decide where and when it will be made. We want to ensure there are no barriers to investment and provide a clear regulatory environment which will help encourage investment.

“But we also want to ensure that the benefits of competition which consumers have enjoyed with current generation broadband can also be achieved as we move to higher speed next generation access.”

The consultation closes on 5 December 2007.