IN Brief:
- Ofgem is consulting on DCC required revenue for November 2026 to March 2028.
- The regulator is moving from ex-post cost review to a forward-looking ex-ante framework.
- The price control affects the secure communications network supporting smart metering in Great Britain.
Ofgem has opened consultation on the Data Communications Company required revenue for the period from November 2026 to March 2028.
DCC provides the central secure communications network for smart metering in Great Britain. It operates as a monopoly under licence arrangements, with its costs subject to regulatory control.
The consultation sets out draft determinations for DCC’s required revenue in the first price control period under a new forward-looking framework. Responses are open until 14 July 2026 through Ofgem’s consultation process.
The regulatory model is moving from an ex-post structure, where costs are assessed after the event, to an ex-ante framework that assesses revenues upfront. The change gives Ofgem a stronger opportunity to test costs, outputs, incentives, and performance expectations before revenue is recovered.
Smart metering communications sit beneath much of the modern retail and flexibility system. Consumption data, supplier switching processes, settlement arrangements, remote operations, and future demand-side services all depend on reliable and secure communications infrastructure. As time-of-use tariffs, low-carbon technology adoption, and distributed flexibility grow, the quality and resilience of that data layer become more important.
Price control design has to balance investment and cost discipline. DCC needs sufficient revenue to operate and maintain a secure national communications system, while customers need protection from inefficient expenditure in a monopoly environment. The consultation therefore sits at the intersection of infrastructure regulation, digital energy systems, cyber resilience, and customer cost control.
The same direction of travel is visible across the wider power sector. NGEN’s AI-led battery control platform shows how storage assets are increasingly operated through data, forecasting, market signals, and automated dispatch logic. DCC’s function is different, but both developments rely on communications infrastructure being robust enough to support a more active electricity system.
Physical networks still carry the power, yet digital systems increasingly influence how efficiently that power is scheduled, measured, billed, settled, and balanced. Smart meters, distributed energy resources, EV charging, battery systems, heat pumps, and flexibility services all rely on data moving through secure and dependable channels.
The consultation will test how Ofgem expects DCC to manage cost, risk, and service delivery during a period of continued system change. Cyber security, operational resilience, supplier interfaces, technology refresh, and compliance obligations all carry cost, but the price control must also ensure that expenditure produces measurable value.
A forward-looking framework can provide clearer expectations for customers and market participants if allowed revenue is linked to defined outputs. It can also reduce the uncertainty created by retrospective cost assessments, provided the settlement is transparent and the incentives are strong enough to maintain pressure on performance.
The smart metering programme remains a foundation for a more flexible electricity system. Its value depends not only on the meters installed in homes and businesses, but also on the communications infrastructure that allows data to be used reliably. Ofgem’s consultation places that infrastructure under a more anticipatory form of regulatory scrutiny, with the next control period set to define how DCC costs are governed as the power system becomes more data-dependent.