Ofcom to do Phorm's bidding?

 

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By Barry Collins

Posted on 23 Sep 2008 at 10:04

Ofcom is offering to help "improve consumers' perception" of behavioural advertising services such as Phorm, to help boost revenues for broadband providers.

In a newly-published consultation document on "super-fast broadband", the regulator claims that the "third incentive for launching super-fast broadband services is to generate new revenues".

One way in which ISPs can recoup investment in fibre networks is through behavioural advertising services, such as the highly controversial Phorm, which has suffered a barrage of negative publicity following secret trials with BT.

However, Ofcom says it's prepared to help turn the tide of opinion on such services. "The introduction of new business models can be controversial, but may be very important in the delivery of new access networks," the consultation document claims.

"Regulation can have a role, for example in helping to increase consumer confidence in new services. One example is improving consumers' perception of behavioural advertising. We are interested in views on where else Ofcom can assist in new commercial developments."

No price restrictions

Ofcom also plans to encourage investment in fibre networks by allowing network operators such as BT to set their own wholesale prices, rather than having them fixed by the regulator.

"This may be a suitable approach where there are indirect retail price constraints, for example from today's broadband services or services offered over other access networks to limit the risk of excessive pricing," Ofcom claims. "Such an approach allows the market to find the right price for these services."

However, Ofcom claims it would be prepared to reapply constraints on wholesale pricing if there wasn't sufficient competition. "If the current situation were to change any pricing approach put in place would need to be reviewed," it claims. "One example would be where the closure of current access networks results in less retail competition and reduced indirect pricing constraints."

Ofcom is welcoming public comment on its proposals on its interactive executive summary.