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UPDATE Ofcom Makes BT’s UK Cable Ducts and Poles Accessible to FTTP Rivals

Posted Thursday, April 20th, 2017 (10:24 am) by Mark Jackson (Score 1,508)
telegraph pole and bt openreach engineer

The UK communications regulator, Ofcom, has today set out their final plans for opening up Openreach’s (BT) national network of telegraph poles and underground cable ducts so that they can be used by rival ISPs in order to deploy ultrafast “full fibre” broadband (FTTH/P) services.

Firstly, we should say that making it easier and cheaper to access Openreach’s cable ducts is not a new idea. Ofcom proposed to improve competition in this area via a new Duct and Pole Access (DPA) solution last February 2016, which followed the outcome from last year’s Strategic Review (here). The related measures were then formally consulted upon in December 2016 (here).

Openreach has been offering a similar Physical Infrastructure Access (PIA) product for some years, which does basically the same thing. However, rival ISPs have long complained that the current PIA solution is cumbersome (administration), suffers from awkward costs and was intended more for helping to connect residential homes (i.e. using it to provide leased line style rural backhaul or big business connectivity wasn’t possible, even though this helps alternative network providers to build a more economically viable model).

Since then Openreach has developed an enhanced PIA2 style solution that they hope will meet Ofcom’s requirements, which has already been trialled by five ISPs (e.g. Callflow, Cityfibre and Vodafone). Mind you the trials were not without problems (here and here), with issues such as blocked ducts, limited duct space, costs and a lack of maps for new cables causing various hiccups. Openreach has already improved their mapping (here).

Never the less Ofcom has today moved to set out their final proposals on the new approach, which they view as being “most viable in denser urban areas and other places with strong demand for new services.

The Main Proposals

Access on fair terms: Providers should be able to lay fibre using BT’s ducts and poles as easily as BT itself (there will be a non-discrimination requirement on BT for all processes, unless it can justify any differences); and the cost to BT for providing this access should be spread across all users (e.g. BT will be required to recover related costs, such as repairing ducts, in the same way it recovers these costs for its own deployments – for example, by spreading them across all the services that make use of the duct).

Network ‘ready for use’: Openreach must repair faulty infrastructure and clear blocked tunnels where necessary for providers to access them.

Mixed-use networks: Companies can lay fibre for consumers and large businesses, provided the purpose of the network is primarily to deliver broadband to homes and small offices. Openreach will no doubt be happy to see this versus the originally proposed ‘any usage‘ rule.

Final connections into homes: BT should ensure capacity is available on its telegraph poles for additional fibre cables that connect buildings to a competitor’s network.

Better information: Openreach will continue to develop a ‘digital map’ of its duct and pole network so competitors can plan new networks.

Most of this has been hinted at in recent consultations, although the ‘ready for use‘ change that would require Openreach to repair faulty infrastructure and clear blocked pipes on request, within a timeframe agreed with its customers, seems like an enhancement on the original outline.

In addition to this, Ofcom states that they are “considering changes to Openreach’s rental charges for accessing its duct network” and they expect to publish specific proposals on this in the summer.

Yih-Choung Teh, Ofcom’s Competition Policy Director, said:

“People increasingly need fast, reliable broadband. We’ll make it easier for companies to offer their own full-fibre broadband more cheaply by accessing Openreach’s tunnels and telegraph poles.

This will put other providers on a level playing field with BT, so they have the confidence to invest in their own full-fibre networks.”

All of this is being supported by the Government’s 100% business rates relief for new full-fibre infrastructure for a 5 year period from 1st April 2017 and their £400m ‘Digital Infrastructure Investment Fund’ (will be matched by private finance), which aims to help boost alternative networks and push FTTH/P capable connectivity out to around 2 million more premises by 2020 (Details). Not to mention the Budget 2017 announcement of another £200m for “local projects to leverage private sector investment in full-fibre broadband networks” (here).

The regulator’s Strategic Review suggested that “sufficient duct space could be available in the UK to support this model of competition” and they pointed to a 2010 survey, which claimed that 63% of the 90mm duct ends surveyed and 97% of the 50mm duct ends surveyed (between the street cabinet and the premise) had at least 42% of unoccupied space. Full-fibre broadband coverage in the UK currently stands at around 2%, which compares to over 70% in Japan, Spain and Portugal but those are also different markets and investment models.

However BT has already warned that this will “not all translate into useable duct space” and indeed the examples above show that there are plenty of obstacles, many of which often don’t crop up until detailed survey work has begun (this often occurs after contracts have been signed). The requirement to repair such problem areas is a useful improvement, but such repairs are often costly and this may thus continue to present an obstacle.

A Spokesperson for Openreach told ISPreview.co.uk:

“Our ducts and poles have been open since 2011 and Ofcom recognises the big steps we’ve taken recently to encourage more companies to use them.

As well as launching an online mapping tool, we’ve made the whole process more accessible, user-friendly, automated and self-service oriented.

We recognise that further improvements might be needed over time, but the economics of network investment remain challenging.

Investing in more full fibre and upgrading not spots will be even harder if Ofcom force us to cover the upfront entry costs for other companies.”

Never the less Ofcom has previously suggested that “a good outcome in the long term would be to achieve network competition of around 40% of households” and today’s measures are a necessary step in that direction. The question now is how much use will AltNet’s make of the revised approach or will it remain a solution that only the smallest players harness.

So far Sky Broadband has already said that they don’t plan to build any new full fibre networks of their own, while TalkTalk’s FTTP deployment remains focused on the city of York and Vodafone has only hinted that it might have an interest. On the other hand some smaller players, like Gigaclear, Cityfibre and Hyperoptic, are fast becoming medium-sized competitors and today’s news should help to drive that growth.

The proposals form part of Ofcom’s new 2017 Wholesale Local Access Market Review for the period from April 2018 to March 2021. The consultation itself closes on 15th June 2017, and Ofcom expects to publish its final decisions in early 2018, with the new rules then taking effect on 1st April 2018.

UPDATE 11:09am

The first comments have just come in.

A TalkTalk Spokesperson said:

“This is positive news for consumers. Allowing other companies to use BT’s existing infrastructure will make it quicker and cheaper to build the world-class infrastructure consumers deserve. If Ofcom get this right, it should mean greater choice, lower prices and better services. This is a step in the right direction, but it is critical Ofcom continues unblocking the other barriers to the infrastructure investment and competition Britain needs.”

We should point out that this is a rehash of an earlier comment and TalkTalk are currently studying the consultation in more detail.

Separately Openreach informs us that, since they launched their enhanced DPA/PIA product the team has seen more interest from ISPs with 25 smaller providers now registered to use the related online mapping service. Apparently the early results are encouraging, with more than 375km of duct reserved to build. We should have an official response from them soon.

UPDATE 11:37am

Added a comment from Openreach above.

UPDATE 1:05pm

Now a comment from Cityfibre, which also appears to take a stealthy dig at Ofcom’s Dark Fibre proposal.

Mark Collins, Director of Strategy at CityFibre, told ISPreview.co.uk:

“CityFibre welcomes any remedies that accelerate the deployment of full-fibre infrastructure by alternative providers. Reducing restrictions on duct and pole access (DPA) and making it more user-friendly is a positive step to support this. We are currently undertaking extensive trials of DPA and believe it to be a valuable deployment option. DPA is only part of the solution however.

To ensure the UK can secure a full-fibre future, companies like CityFibre need to continue to invest in our own physical network infrastructure at pace. In accordance with its strategic review last year, Ofcom must ensure that all of its regulation supports the business case for private investment and infrastructure competition.”

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8 Responses
  1. Ethel Prunehat

    > registered to use the related online mapping service

    Is there a reason why one would have to register to see this information? Make it a layer on OpenStreetMap or whatever and be done with it!

  2. Chris P

    “and the cost to BT for providing this access should be spread across all users (e.g. BT will be required to recover related costs, such as repairing ducts, in the same way it recovers these costs for its own deployments – for example, by spreading them across all the services that make use of the duct).”

    So “Bodge IT” lay fibre in BT’s duct and break the duct or other people’s fibre and BT have to fix it and spread the charge with all that use the duct? That just rewards the bad installers and puts undue burden on the careful installers.

    Would be good to see how this works in practice and how happy the ISP’s When this is in operation.

    OFCOM need to have their ideas realigned with reality.

    • Optimist

      Chris P – ” So “Bodge IT” lay fibre in BT’s duct and break the duct or other people’s fibre and BT have to fix it and spread the charge with all that use the duct?”

      Easy-peasy! You just repair it with duct tape!

  3. Jonny

    Surely this is enough for Sky to crack on and build their FTTP network? Or do they still want somebody else to handle everything for them and just present it on a plate at a low price to be resold?

  4. CarlT

    Anyone else suspect this is going to be used largely for leased lines, be they business to business or for Hyperoptic et al to connect buildings and backhaul them?

    Be great if you’re in an Hyperoptic MDU, otherwise people will I suspect be SOOL.

    • This is why Ofcom changed from their initially proposed ‘any usage’ model to ‘mixed use’, where business style connections like leased lines can be deployed but only “provided the purpose of the network is primarily to deliver broadband to homes and small offices.”

      Of course finding and measuring that balance could be tricky, so we’ll have to see what happens.

  5. Steve Jones

    “(e.g. BT will be required to recover related costs, such as repairing ducts, in the same way it recovers these costs for its own deployments – for example, by spreading them across all the services that make use of the duct).”

    This bit is clearly nonsense. The costs of clearing ducts for the FTTC and FTTP deployments were factored into the business cases for those deployments. As such, it is the revenue for FTTC/FTTP alone that will have been used to justify the duct repairs and and capacity uplifts and relevant costs will therefore be recovered from revenues for those products, and not from all the services that run through ducts (which would, of course, include the MPF products).

    If Ofcom want some form of system for the costs of any such duct clearances and repairs to be spread, then the logic would suggest that the costs that have been incurred to date for passive infrastructure remedy/enhancement for FTTC, FTTP & other fibre deployments ought to be added (suitably amortised) to the charge for PIA services. To do this properly surely requires an in-depth process to work out the costs and value of the passive infrastructure and some sort of charging regime which would (of course) apply to OR’s network as well. That might well impact on the cost of MPF & LLU (which might be a bit unfair, as it’s not those services which required the passive infrastructure repairs).

    Before anybody says it, yes, I am aware that for the BDUK projects, clearance and repair costs would have been subsidised by gap funding. However, it rather makes the point that, to date, OR have treated this as part of deployment costs, and not as operational costs, which has always been the accounting approach adopted by Ofcom in regulating prices. Once there is a requirement to maintain a deployment ready passive infrastructure for new services, then that changes everything and implies a large increase in operational costs and resources.

    It this rate OR will have to split off another company to own and maintain the passive infrastructure. We might called it Openduct, although that might imply a pavement hazard.

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