UPDATE OTA Reveal Final Stumbling Blocks for BT’s UK Dark Fibre Product

Openreach (BT) hope to publish a final reference offer for their new Dark Fibre Access (DFA) product by the end of 2016, which will give rival ISPs “physical access” to their fibre optic cables. But a recent progress update reveals that disagreements over contracts, repair times and fees have yet to be resolved.

The new Passive Remedy allows rival ISPs to install their own equipment at either end of the optical fibre within BT’s ducts (i.e. allowing them to “take direct control of the connection“), which Ofcom hopes will result in more competition and may even help to speed-up the roll-out of new broadband services around the United Kingdom.

Openreach’s DFA product is due to be introduced on 1st October 2017 and the first Draft Reference Offer has already been released (summary), with the aim being to complete a final offer by the end of 2016. The service itself will be available on a national basis in the regulated UK areas, with the exception of Hull, Central London, Core Routes and Data Centres.

Perhaps unsurprisingly there are still a few disagreements to overcome and the latest update from the Office of the Telecommunications Adjudicator (OTA2) includes a list of the “relatively small number of issues on which the two sides will not agree” (the two sides meaning BT/Openreach and the ISPs).

DFA – Failure to Agree Items

• Minimum term of 36 months
• Forecasting linked to SLG (Service Level Guarantees) payments
• The SLA (Service Level Agreement) for repair of the fibres at 18 hours
• The price of an abortive visit charge at £650
• Openreach refusal to consider waiving and term cancellation fees for circuits under their term, migrating from the active product onto DFA

The OTA have said that they will, for the “purpose of wider understanding“, raise the list of “failure to agree” items at the OTA2 Executive and inform the Business Connectivity Market Review (BCMR) team within Ofcom. At this stage it remains to be seen whether these aspects result in ISPs posting a formal objection to the current product proposals.

An Openreach Spokesperson told ISPreview.co.uk:

“We’re making good progress towards launching a Dark Fibre Access product. We worked closely with industry to develop our Draft Reference Offer and we are confident that we’re close to a proposition that works for all parties.

We’ll continue to have regular discussions with Communications Providers as we finalise the offer by Dec 1st 2016 and build the product for launch on 1st October 2017.”

In fairness we’re surprised that these are the only disagreements left because DFA tends to be a particularly contentious product, with even Ofcom’s older 2012 business connectivity review describing it as carrying “significant risks of worse outcomes, both for consumers and for effective competition, including adding costs and encouraging inefficient entry.” How times change.

BT claims that the solution is a “flawed piece of regulation that introduces an unnecessary layer of complexity and will deter others from building their own fibre networks” and they’ve got support from other core infrastructure builders, such as Virgin Media, Cityfibre and Zayo. Cityfibre are even in the process of challenging DFA through the Competition Appeals Tribunal (here).

The core concern is that a cheap DFA solution from Openreach could damage competition in the market and discourage investment by rival Dark Fibre providers, which for once is a position that BT shares with their infrastructure rivals. We have asked BT for their thoughts on the current areas of disagreement and are waiting to hear back.

Separately the OTA’s update also touched on a number of other areas and these usually don’t offer much in the way or new information, but this time we did get a few interesting little bites of information about their future SOGEA (standalone FTTC broadband) and Long Reach VDSL (FTTC / VDSL2 extended range for helping to meet the 10Mbps USO) products, among other things.

Update – Copper & Fibre Products Commercial Group

SOGEA is well advanced and after discussion between the OTA2 and Openreach agreement has been reached regarding an acceptable way forward which allows CPs to upgrade existing customers without the need to consume the full 10 day migration period. CPs will need to consume a registration process to ensure that the risk of erroneous lines transfers is avoided. Concerns around what is known as “day 2 test” (the removal of the copper back to the exchange for testing) still exist. Openreach are still investigating how these can be addressed.

LR-VDSL (Long Range VDSL) is proving to be complicated as any trial involves contacting resellers served by the wholesale community. Not all resellers are currently able to adopt FTTC so potentially risk losing customers. Discussions are ongoing in trying to resolve these reseller/CP issues.

Finally, Openreach have relaunched their joint initiatives with CPs to trial and explore how to improve fault resolution where the line test reports ok (LTOK). The expectation is that joint work on diagnostics and data exchange will improve customer experience and give a better indication of the location of problem. It is still not clear whether CPs would prefer to develop their own capabilities or rely more on Openreach.

The LRVDSL issue is one that we’ve briefly touched on before as being a possibility, not least because the technology works best when existing ADSL broadband services are removed from local lines (i.e. ADSL users would be migrated to FTTC / LRVDSL). This obviously presents a complicated problem for any future roll-out to overcome (more here and here).

UPDATE 1:15pm

We’ve added a comment from Openreach above.