Ofcom last week held a seminar in Brussels on the subject of NGA. I don’t think the public was invited — I don’t recall seeing an announcement. Anyway, Dougal Scott gave an overview of the issue for the UK. Here are the reasons why Scott thinks that no big NGA announcements have been made in the UK:

* ‘DSL is pretty good in many places’

* ‘British people live in little houses, rather than blocks of flats’ so fibre roll-outs are more expensive

* The high-level of digital TV penetration makes the IPTV market ‘look a bit difficult’

It’s interesting to me that the three reasons all involve good things: many Brits don’t live in ugly blocks of flats, they have good DSL service and several digital TV choices. It seems odd. We’re supposed to believe that the reason we have a looming problem is because we otherwise have it so good?

What’s not to blame according to Scott? Ofcom. According to Ofcom, the lack of NGA investment in the UK has nothing to do with the BT Settlement and the resulting functional separation of BT into retail and wholesale divisions:

[I]f you’re saying that functional separation removes the incentives to invest, what you’re really saying is this. You’re saying that the incentive to invest in next generation access comes from the ability to foreclose competition downstream. And as any economist will tell you: if that’s the only reason you’re making the investment, it’s probably not a very efficient investment to have made.

I’m not sure I agree. It’s not about foreclosing competition downstream, it’s about being rewarded for the incredible risk you take installing fibre in various areas. But I’m no expert here. I don’t presume to know as much as Ofcom as to what motivates or demotivates a telecoms firm to make fibre investments. It’s just something like a hunch combined with a strong correlation: Ofcom required the functional separation of BT and now the UK and seemingly no other country — including ones with ‘pretty good DSL’ and ‘little houses’ — is falling behind on NGA.

Ofcom face a challenge here. Asking what’s wrong with NGA in the UK requires at least an initial examination of whether Ofcom’s functional separation of BT is a causal or contributing factor. But that examination would require Ofcom to essentially review its previous work for error or the occurence of unforeseen consequences.

Who likes doing that?