Ofcom Clear Openreach FTTP Migration Trials with Softer Rules

Ofcom has today implemented softer rules to support Openreach’s (BT) IP (VoIP) and FTTP UK migration trials in Salisbury and Mildenhall (here), which aim to test the processes for moving customers off older copper broadband ISP and telephone services. Discounts and a new bulk migration process are part of the changes.

Just to recap. Openreach is investing £8m to roll-out FTTP broadband to c.20,000 premises in Salisbury by April 2020, which will effectively give them universal coverage of the city. Due to this the city has also been chosen for their Exchange Upgrade trial (i.e. switching off copper and going full fibre).

Meanwhile the Mildenhall trial will focus on the move from analogue telephony to digital voice services. The trial will help them to prepare the industry for the upgrade to VoIP technology, as well as the withdrawal of wholesale products and services that run over the traditional telephone network (due to close in 2025).

Both of the aforementioned trials are set to run until December 2022 or later and Ofcom has said that they expect Openreach to cover an entire exchange area (100%) with “fibre” (they include both FTTP and G.fast into this definition) before they start to move the regulatory focus away from copper (the transition period for this will take several years).

Moving masses of consumers on to the new platforms like this will not be easy and requires new processes, as well as targeted discounts, to help soften the blow for consumers and ISPs alike.

The Key Changes

* Ofcom has approved Openreach’s new “Bulk Grouping provision capability,” which is a voluntary new installation process that will allow ISPs to upgrade their standard broadband (e.g. ADSL) customers to superfast (FTTC / VDSL2) products in batches at a given street cabinet, and at a lower price per line (i.e. savings from engineering efficiencies created by bulking jobs). Related orders will thus be exempt from certain Quality of Service (QoS) regulation requirements for the remainder of the 2018-2021 review period. This change is not specific to the Salisbury and Mildenhall trials, but is related.

* Ofcom has agreed to limit the application of their current rules which require Openreach to provide wholesale access to standard and superfast broadband on its copper network. In Salisbury, where fibre is available, Openreach will no longer be required to provide new copper services when customers move house, change service or switch ISP. Instead, it will be able to offer broadband over its fibre network only.

* To allow Openreach to vary its charges to encourage participation in the Salisbury and Mildenhall trials, Ofcom has also decided to limit the application of three of their rules in the trial areas. These changes will enable Openreach to:

1. Waive selected wholesale connection charges for migration from legacy to replacement services;
2. Maintain wholesale rental charges at the legacy service rate for one year after migration; and
3. Waive certain ancillary charges associated with migration.

NOTE: The rules mentioned above are an obligation not to discriminate unduly when providing network access, including the requirement to provide identical wholesale services to all telecoms providers (‘equivalence of inputs‘); and the rule which specifies that in areas where Openreach has deployed fibre and has withdrawn its copper-based broadband services, it must offer a 40Mbps download, 10Mbps upload fibre based broadband service at the same regulated price it charges for the equivalent copper-based service elsewhere in the UK (more background).

These amendments will apply only to certain charges offered by Openreach for the Salisbury and Mildenhall trials and for a limited time. Ofcom’s rules will continue to apply in full elsewhere in the UK. “We will be working with industry to put appropriate safeguards in place for the protection of vulnerable customers during the trials, including the ability to pause their migration or to restore their copper services at short notice if necessary,” said Ofcom.

Ofcom now intend to closely monitor Openreach’s trials in order to inform their plans for future regulatory changes. In relation to the Salisbury trial, the consent limiting the application of the relevant Significant Market Power (SMP) Conditions, which will enable Openreach to stop providing new connections where fibre is available, takes effect from 1st December 2020.

In relation to the Salisbury and Mildenhall trials, the direction disapplying the relevant SMP Conditions, which will enable Openreach to offer its proposed commercial offers in the trial areas, takes effect for the period from 3rd February 2020 to 4th May 2021.

As for the new bulk grouping provision capability, only Cityfibre raised some concerns with the proposals. In particular, Cityfibre claimed that the proposals would run the risk of promoting FTTC take-up and undermine investment incentives for FTTP deployment, including leading to a delay in migration of customers to FTTP which would leave customers worse off overall. Ofcom said they “do not share Cityfibre’s concerns.”

You can check out both of Ofcom’s related statements here and here.