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UPD ISP TalkTalk Business Adopt BT Openreach Dark Fibre After CMA Ruling

Monday, Apr 10th, 2017 (1:28 pm) - Score 2,579

UK Internet provider TalkTalk Business has today confirmed that they will be one of the first ISPs to adopt Openreach’s (BT) proposed ‘Dark Fibre Access‘ product, which follows a key ruling by the Competition and Markets Authority (CMA) that will affect how the service is priced.

Ofcom has been pushing for DFA since early 2016 because they see the so-called “Passive Remedy” as a way of delivering both more market competition and helping to speed-up the deployment of faster broadband services around the UK (e.g. backhaul capacity to support new networks).

Essentially DFA gives rival ISPs “physical access” to Openreach’s fibre optic cables (i.e. allows them to “take direct control of the connection“), which means that they can then install their own equipment at either end of the optical fibre within Openreach’s cable ducts.

Providers like TalkTalk may be able to benefit from this, although big infrastructure builders like BT, Virgin Media, Cityfibre and the Zayo Group fear that it will discourage operators from investing to build their own fibre optic networks (here). Never the less Openreach has reluctantly been constructing a DFA solution since last year (here) and the first trials are due to take place from August 2017 (here) in London, Birmingham, Manchester and Liverpool.

However TalkTalk complained that the initial model proposed by Ofcom had not taken into account the impact that non-domestic rates (business rates) would have on DFA. BT is currently responsible for the non-domestic rates payable on standard Ethernet lines, but under DFA any ISP that took the new service would take on the responsibility and that’s a problem because smaller ISPs pay a higher rate.

Today the CMA has upheld TalkTalk’s appeal and ruled that CPs’ higher non-domestic rates need to be taken into consideration when setting the wholesale price, which could in theory make the service a little bit cheaper.

Richard Thompson, TalkTalk Business’ Commercial Director, said:

“We are pleased that the CMA has recognised that BT’s wholesale dark fibre price needs to be adjusted to ensure that it becomes the cost-effective alternative it was originally intended to be.

Whilst there is still much to be agreed, we are very excited about the opportunities dark fibre will bring to increasingly data-hungry businesses, and we’re looking forward to being able to unveil our plans for giving our customers access to the great value, high performance connectivity they’re crying out for.”

The ISP claims to be “incredibly excited about the opportunities dark fibre will bring to increasingly data-hungry businesses” and they intended to unveil more information about their DFA plans “over the coming months,” although this solution is more intended to benefit business than home connections (some of it might also seep down to consumers).

The current DFA product is based off Openreach’s 1Gbps capable Ethernet Access Direct (EAD) service, albeit with the ISPs own kit on each end of the cable and with many of the same caveats (distance limits, main link charges etc.). At present it feels a bit niche but on the other hand this is a new market for Openreach and time will tell whether or not it delivers the sort of change that Ofcom desires.

NOTE: It’s important not to confuse DFA with Ofcom’s wholesale Duct and Pole Access (DPA) remedy, which will give rivals access to install their own cables via Openreach’s underground cable ducts and telegraph poles (i.e. two different sides of the same coin). Cityfibre and others welcome DPA, even if a few of them have had trouble using it (here and here).

UPDATE 11th April 2017

Ofcom has today proposed an amendment to their related regulation (here), which is open for consultation until 22nd May 2017. The regulator estimates that the “total impact of these changes will be in the order of £5m, or around 1% of the total allowed costs in the [Leased Line Charge Control] in 2018/19.”

Ofcom added that they expected BT to implement the change before DFA is formally introduced from October 2017. We should add that BT are also appealing via the CMA against some of Ofcom’s DFA related measures and an outcome on that is due soon. A similar appeal by Cityfibre was recently rejected.

Mark-Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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