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UPD Ofcom UK Considers Sky Broadband Call for Unbundled FTTC Product

Wednesday, July 10th, 2013 (3:26 am) - Score 1,880

Ofcom has confirmed that they’re considering a “difficult to assess” request by Sky Broadband (BSkyB) for BT to offer a new unbundled (LLU) superfast broadband (FTTC) product, which would most likely give UK ISPs more control and price flexibility over their services.

Local Loop Unbundling is the process of freeing-up BT’s telephone exchange so that rivals can install their own kit inside, thus semi-bypassing the incumbent and allowing for greater product price and service flexibility. Many ISPs use this for standard broadband (ADSL2+) lines but sadly the same product is not available with FTTC.

Instead many of the big FTTC (up to 80Mbps) using ISPs adopt Virtual Unbundled Local Access (VULA), which allows third-party ISPs to deliver services over BT’s new Next Generation Access (NGA) network. This solution affords a similar level of control to taking over the physical line (LLU), although it’s not as flexible and BT still retains control of the line and key prices.

So you might ask, why can’t ISPs just have an LLU product for FTTC too? The answer to that is complex, not least because of the way that FTTC shifts the focus out of the telephone exchange and into street cabinets. It also creates a technical nightmare if BT wants to deploy something like Vectoring technology to reduce interference (this only really works if it’s applied to all lines) and another ISP doesn’t or can’t support it. Differences between hardware and software would be a lot to tackle.

Ofcoms Statement (Consultation)

FTTC unbundling, also known as SLU Bitstream, could allow a CP to rent DSLAM ports at a cabinet where BT had deployed FTTC. This could provide it with more control over the connection, including through the use of its own backhaul. As with SLU, there are a number of ways in which the CP could arrange backhaul to the cabinet, including self-build, PIA or renting an active or potentially passive or wavelength connection from another CP such as BT.

In its 2012 FAMR Call for Inputs response, Sky stated that it and other CPs were soon to recommence commercial discussions with BT for the provision of such a product. It also said that if, as in the past, BT was not minded to provide such an unbundled access with the flexible backhaul options proposed, there would be considerable merit in Ofcom considering during this market review whether BT should be required to provide a SLU bitstream product.

We note this is currently the subject of an SoR that has been raised by Sky and which we understand has the backing of other CPs. We are generally supportive of products that offer increased dynamic benefits arising from a greater level of control, such as greater innovation and retail product differentiation. However, the CP demand and precise requirements (including the preferred backhaul option) for this product has yet to be established, which makes it difficult to assess what those dynamic benefits would be, particularly what those benefits would be above and beyond the current VULA product.”

Sky’s approach, which has been submitted to Ofcom’s on-going Fixed Access Market Review consultation, is roughly based around Sub-Loop Unbundling (SLU). This is the solution that ISPs like Rutland Telecom (Gigaclear) have used to build their own street cabinets in rural areas.

However the economics of SLU only really make sense in rural areas, which makes us wonder how Sky intends to change this. Ofcom’s current review has already proposed a partial solution to the problem but Sky appear to want something much more extensive for their solution.

Unfortunately the precise details of Sky’s request are not available to examine, which makes it difficult to comment. But The Guardian reported last week that they wanted not only unbundling of street cabinets but also of the lines running to them from local exchanges (Wavelength Unbundling perhaps?) and of the lines running from the cabinet to the home.

The idea of a truly unbundled FTTC product is certainly very appealing but the economic and technical complications (e.g. a nightmare for the future deployment of G.Fast or vectoring) of achieving this could prove difficult. Either way we should learn more when the responses to Ofcom’s consultation are published after 25th September 2013.

It should be noted that Ofcom does not currently propose to require BT to implement such a product but it has “invite interested parties to keep us updated on the progress of the [request]“.

UPDATE 7:09am

Added some extra details from Ofcom’s consultation document.

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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 Twitter, , Facebook and Linkedin.
Leave a Comment
7 Responses
  1. timeless says:

    an interesting read. will be interesting to see what Ofcom will come up with.

  2. Ignitionnet says:

    Ah Datastream. We meet again.

  3. Adrian says:

    I am confused by this.

    You can already get access at different levels. Physical level by your own FTTC cabinet and sub-loop unbunding (as Rutland do, I believe). Ethernet level access using GEA to connect your LLU equipment at the exchange via a port in the FTTC cabinet (same access BT Wholesale have as any other LLU telco). Ethernet level access with backhaul via BT Wholesale Etherway/Etherflow. PPP level access without full backhaul via WBC. PPP level access with backhaul with WMBC.

    I am not clear which bit Sky think is missing.

    FYI, What we (A&A) think is missing is a pricing model for aggregate GEA access via BTW Etherway/Etherflow to allow us to manage our own contention at a better price point (Ethernet equivalent of datastream).

    1. ritchie says:

      SLU wholesale service providers like the one you mentioned and others, cannot offer a SMPF service to LLU lines without having to buy a new MPF at c.8x the price. This is a BTOR policy which ruins the business case for going to an altnet provider of FTTC services, and needs addressing quickly if competition at the infrastructure level is to succeed.

  4. Colin says:

    This guy at other ISPs drop their way with it with the sub lull, Was that discouraged BT for rolling out superfast broadband in areas which currently doesn’t have it, faster.

    I just would like Fibre Internet in any way. I,m 0.4 miles away from the cabinet.. My adsl is as fast as I can get.

  5. DTMark says:

    As ever, the main problem is the capital cost of creating a broadband network which delivers services to premises and the predatory monopolistic position that BT holds.

    I shall qualify that – there is nothing wrong with adopting a predatory position towards other potential providers. It is the correct behaviour for a private enterprise.

    That said, BT has chipped in a few quid towards the VDSL rollout (perhaps a little disingenous) which forms private investment. BDUK could have gone for a model involving attracting private investment to create a market, but went for the “bung” model instead locking out other potential investment further entrenching a monpoly, and so we are where we are.

    Regulation and price controls haven’t worked.

    But the answer, as always, appears to be regulation and price controls.

    We’ve learned nothing from the last decade.

  6. Robert says:

    Excellent lets hope Ofcom see things their way which will lead to more consumer choice and even cheaper products. Its going to happen sooner or later just like ADSL and LLU on that platform.

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