Copper retirement second threshold: Ofcom leaves the post-2031 rules undefined
In short: The copper retirement second threshold changes on 1 April 2029: from that date Openreach may exclude 10% of the premises in an exchange area, so 90% ultrafast coverage replaces 100%. Ofcom decided this on 9 September 2026. The mechanism operates for two years, and Ofcom expects conditions for full copper deregulation from 2031.
A broadband provider buying copper wholesale lines from Openreach keeps the benefit of a price cap on those lines until at least 1 April 2029. Ofcom fixed that date on 9 September 2026, alongside a decision that Openreach may leave a tenth of the premises in an exchange area out of the coverage test that lifts the cap. Ofcom has not yet written the conditions for full deregulation of copper, which it expects to take effect from 2031.
Key points
- Openreach may exclude a fixed 10% of the premises in an exchange area from the ultrafast coverage requirement, so it satisfies that requirement at 90% rather than 100%. Source: Ofcom, Statement: Approach to the copper retirement second threshold calculation, 9 September 2026, paragraph 3.2
- The exclusion is available only from 1 April 2029. Until that date Openreach must reach 100% ultrafast coverage in the exchange area. Source: Ofcom statement, paragraph 3.2
- The exclusions mechanism operates for two years, from 1 April 2029 to 1 April 2031, and Ofcom will revisit the second threshold in the market review beginning in March 2031. Source: Ofcom statement, paragraph 3.255
- Ofcom has not defined the criteria for the third threshold, the complete withdrawal of copper regulation, and expects any conditions to take effect from 2031. Source: Ofcom statement, paragraphs 4.57 and 4.61
- Openreach asked for 80% coverage and no date, nine respondents including CityFibre asked for defined exclusions rather than a percentage, the Independent Networks Co-operative Association (INCA) asked for delay to 2031 or a 3% figure, Sky asked for a lower percentage and VodafoneThree for 5%. Ofcom adopted none of those positions. Source: Ofcom statement, paragraphs 3.24 to 3.32 and 3.48
| Issue | What Ofcom has decided | Where Ofcom says so |
|---|---|---|
| Exclusions from the coverage test | A fixed 10% of premises in an exchange area, applied uniformly across the UK, so Openreach meets the requirement at 90% ultrafast coverage | Paragraphs 3.2, 3.11 and 3.123 |
| Earliest date | 1 April 2029; the 100% requirement governs until then | Paragraph 3.2 |
| Life of the mechanism | Two years, from 1 April 2029 to 1 April 2031 | Paragraph 3.255 |
| Legal instrument | A direction in the wholesale local access Area 2 and Area 3 markets under SMP condition 1.7(b), given under section 49 of the Communications Act 2003 and tested against section 49(2) | Paragraphs 3.257 to 3.258 and Annex 1 |
| Premises with no Openreach FTTP | Openreach remains subject to the copper charge control at those premises, including after the second threshold is met in that exchange area | Paragraph 4.35 |
| Third threshold | Criteria still undefined for 2026-31; Ofcom expects any conditions to take effect from 2031 | Paragraphs 4.57 and 4.61 |
| Possible shape after 2031 | Ofcom offers premises-by-premises withdrawal as an illustration, with conditions that could reflect alternatives other than Openreach FTTP | Paragraph 4.62 |
The 10% exclusion and the 1 April 2029 date
Openreach may now exclude a fixed 10% of the premises in an exchange area when Ofcom assesses whether the second threshold has been met, so it satisfies the coverage requirement at 90% ultrafast rather than the 100% the rules require today. The second threshold is the point at which Ofcom withdraws the charge control on Openreach’s copper wholesale services in an exchange area. Openreach cannot use the exclusion before 1 April 2029. Ofcom gives effect to the decision by a direction in the wholesale local access Area 2 and Area 3 markets under SMP condition 1.7(b), made under section 49 of the Communications Act 2003, which required Ofcom to satisfy itself that the direction is objectively justifiable, not unduly discriminatory, proportionate and transparent.
Ofcom chose the fixed percentage over the Defined Exclusions Approach, under which it would have specified the circumstances in which a premises could be left out, on the ground that the fixed percentage is far less onerous to implement and so proportionate. Every substantial respondent asked for something else. Openreach argued for a 20% exclusion, putting the coverage requirement at 80%, and objected to having any date at all. Nine respondents supported defined exclusions instead, CityFibre and Community Fibre among them. INCA asked Ofcom to delay any fixed percentage until 2031, or failing that to set it at 3%. Openreach, Community Fibre, INCA and CityFibre all told Ofcom that its rationale for 10% was unclear, arbitrary or unsupported by evidence. Sky argued for a lower percentage, VodafoneThree for 5%, and PXC for individual justification of each exclusion.
How the three thresholds work
Ofcom regulates copper retirement exchange by exchange in three stages, under Significant Market Power (SMP) conditions 1.6 to 1.11 imposed on BT in the Telecoms Access Review 2026-31 of 17 March 2026. At the first threshold Openreach may stop selling copper-based services at premises where fibre to the premises (FTTP) is available, once ultrafast services reach 75% of premises in the exchange area and Openreach has published a First Threshold Notice. The three-stage structure is set out in more detail in an earlier post on the copper retirement framework, written when this calculation question went out to consultation.
At the second threshold Ofcom disapplies the inflation-indexed charge controls on metallic path facility, SOGEA 80/20 and FTTC 80/20 connections and rentals, and the requirement that charges at other bandwidths be fair and reasonable. Openreach must satisfy five conditions: 100% ultrafast availability in the exchange area, excluding any premises Ofcom directs; a notice at least 12 months before it expects to reach the threshold, under SMP condition 8.2; at least two years since the First Threshold Notice; Openreach FTTP at the premises in question; and a published Second Threshold Notice. Where FTTP is not available at a premises, Openreach remains subject to the copper charge control at that premises. The third threshold, the complete withdrawal of copper regulation, has no criteria: Ofcom decided in the Telecoms Access Review that it was too early to set them.
A two-year mechanism and a 2031 review that is not bound by it
Ofcom states the position plainly at paragraph 3.255 of the statement: the exclusions mechanism “will be in place for only two years until the start of the next market review period, from 1 April 2029 to 1 April 2031”, and Ofcom will have the opportunity to review the second threshold, and to define the third, in the market review commencing in March 2031. The heading over its central decision reads “Decision on adopting a 10% fixed percentage for the period to April 2031”. The 90% requirement does not mean that Openreach must reach that coverage in every exchange for copper deregulation to apply beyond 2031 (footnote 154, to paragraph 3.152).
Conditions for further deregulation are due to take effect from 2031 on Ofcom’s own timetable, and Ofcom intends to consider a range of approaches to them. Ofcom’s approach to the first and second thresholds has centred on Openreach’s own coverage requirements, but Ofcom records that different approaches may be appropriate as FTTP build completes and take-up progresses. Ofcom’s own illustration is withdrawal of copper regulation premises by premises, on conditions that “could also reflect the availability of alternatives other than Openreach FTTP, where those alternatives are capable of supporting migration from copper-based services”. For the second threshold, Ofcom declined to designate premises served by alternative networks as exclusions from the coverage calculation, having decided that point in the Telecoms Access Review. Ofcom leaves the equivalent question open for the third threshold, at paragraph 4.62.
Implications for access purchasers, alternative networks and investors
An internet service provider buying copper wholesale inputs has at least a year’s formal notice under SMP condition 8.2, and more than two years from today, before any exchange sees copper pricing deregulation. Once Ofcom disapplies the copper charge control in an exchange area, Openreach becomes subject to a charge control on the FTTP 80/20 anchor product, so the service the customer migrates to is priced under a cap. BT ceases to be subject to the fair and reasonable pricing requirement on the deregulated copper charges but remains subject to the non-discrimination requirements in the SMP conditions. Ofcom declined to exclude SOGEA customers from price increases and declined a glidepath, on the ground that both would require amendment of the SMP conditions and so fell outside this statement, and disagreed with both suggestions in any event.
Alternative networks did not want a coverage test at all, and INCA asked Ofcom to hold the exclusions back to 2031 rather than 2029. For the period after 2031, Ofcom takes the opposite approach at paragraph 4.62. Answering Gigaclear, Ofcom accepts that the network within scope of the copper retirement thresholds is not necessarily limited to Openreach’s own FTTP network, that whether another network falls inside the definition depends on the degree of direction and control BT can exert over it, and that a network treated as BT’s for the thresholds is likely to be treated as BT’s for the rest of the SMP conditions. Anyone negotiating a commercial rights-of-use arrangement with BT over a third-party network is inside that question. A buyer or lender modelling copper-based wholesale revenue past 2031 is modelling a framework that does not exist yet, which makes it a live item in regulatory due diligence on a UK fixed network rather than a settled input.
Viewpoint
I read paragraph 4.62 as the most consequential passage in this statement. Ofcom has fixed the 90% figure and the 1 April 2029 date only for a mechanism it describes as operating for two years, and Ofcom has said that the coverage logic behind them may not be the logic it uses after 2031.
Ofcom plans to begin engaging on full deregulation well in advance of consulting on the 2031-36 review, and has given no date for it. The exercise that closed on 9 September 2026 ran from 17 March, with fourteen respondents and an economic report Sky commissioned from Frontier Economics, to settle one calculation question inside an existing threshold. Defining the third threshold is a larger question, and a wholesale purchaser or an alternative network has more influence in the engagement Ofcom has announced than in the consultation that follows.
The European Commission has proposed a common framework for copper retirement in the Digital Networks Act with a 2035 backstop, still subject to negotiation and with Q4 2027 identified as a target for political agreement, and Ofcom records that only the incumbents in Spain and Norway have fully switched off copper. The UK is getting to the same place through Ofcom’s market reviews rather than through a statute, and Ofcom’s current thinking puts the start of full deregulation at 2031.
Frequently asked questions
When can Openreach raise copper wholesale prices?
Not before 1 April 2029, and then only in an exchange area where the second threshold has been met and at premises where Openreach FTTP is available. From that date Openreach may exclude 10% of premises in the exchange area from the ultrafast coverage test, so it meets the test at 90% coverage. The other second threshold conditions, including the 12-month notice and the two-year gap after the First Threshold Notice, still apply.
What happens at premises with no full fibre?
Openreach remains subject to the copper charge control at those premises, including in an exchange area where the second threshold has been met. Ofcom confirmed this in response to PXC and the UK Competitive Telecommunications Association (UKCTA) at paragraph 4.35. Where Ofcom disapplies the copper charge control, Openreach becomes subject to a charge control on the FTTP 80/20 anchor product instead, so the customer migrating to fibre moves to a regulated price.
Has Ofcom set a date for full copper switch-off?
No. Ofcom has not defined the third threshold, which is the criteria for complete withdrawal of copper regulation, and decided in the Telecoms Access Review 2026-31 that it was too early to do so. Ofcom expects any conditions for further deregulation to take effect from 2031 and will consider them in advance of the market review commencing in March 2031. BT’s separate industry programme to retire the public switched telephone network runs to January 2027 and is a different exercise.
Does alternative network coverage affect the thresholds?
Not the second threshold. The test measures Openreach’s own ultrafast coverage in the exchange area, and Ofcom declined to designate premises served by alternative networks as exclusions from that calculation, having decided the point in the Telecoms Access Review 2026-31. For the period after 2031 Ofcom has left it open, and offers as an illustration conditions that could reflect the availability of alternatives other than Openreach FTTP where those alternatives can support migration from copper.
For advice on the copper retirement framework, wholesale access pricing or Ofcom consultation engagement, contact Rob Bratby at Bratby Law.
