UPD Ofcom UK Propose Faster Line Repairs and Installs from BT Openreach

The communications regulator has launched a new consultation on proposals that would require BTOpenreach, the company responsible for maintaining BT’s national UK telecoms and broadband network, to meet better “minimum performance standards“. Faster service installations and repairs could be two of the benefits but it won’t help FTTC/P lines.

Ofcom, which has been investigating the issue as part of its wider Fixed Access Market Reviews process (here), has been examining the problem following concerns from both ISPs (e.g. TalkTalk and Sky Broadband) and consumers (here), many of whom felt that Openreach took far too long to install or repair their service.

The regulator already requires Openreach to meet new contractual targets for services, which can result in automatic payments to other phone or broadband ISPs where it misses those targets. According to Ofcom, this has improved the company’s performance to “pre-2012 levels“, although the new proposals will go much further.

Ofcoms New Openreach Proposals

* Openreach must complete around 80%** of fault repairs within one to two working days of being notified, irrespective of factors such as severe weather conditions;

* Openreach must provide an appointment for around 80%** of new line installations within 12 working days of being notified, irrespective of factors such as severe weather conditions;

* Openreach must ensure it adheres to these new standards across the country, by meeting the requirements in each of ten geographic divisions of the UK1; and

* Openreach must provide data on repairs and installations that are not completed within this timeframe. This information, which would be publically available, would allow Ofcom to monitor Openreach’s performance closely and intervene further if required. Ofcom has also asked Openreach to make clear the timeframe in which it expects to complete these remaining jobs in future, in order to provide reassurance to consumers about how long this work is likely to take.

Ofcom states that both of the two 80% targets above “will be adjusted slightly to deal with instances where external factors beyond Openreach’s reasonable control (such as extreme weather) mean it is not possible to meet the service standard. The targets will allow that up to 3% of repairs and 1% of installations in a typical year might be delayed due to such factors.”

However, the new targets would only apply to BT’s own Wholesale Line Rental (WLR) product and its LLU fully unbundled (MPF) broadband and phone lines, which are used by the majority of ISPs. Sadly the targets would not help Openreach’s superfast “fibre broadband” (FTTC/P) lines, where Openreach has been judged to have “generally met or exceeded its service level agreements” (though Ofcom has promised to monitor this).

But what happens if they fail to meet the new targets over the regulators recommended 12-month period? Ofcom has warned that Openreach could be fined. The regulator also states that any increase in Openreach’s charges, resulting from the above changes, would be at wholesale level and have been estimated “to be in the order of a few pennies per month“. Ofcom is being cautious not to damage consumer affordability but prices might still rise (e.g. the need to hire extra staff), if only by a very small amount.

Ofcom states that the new requirements would have to be met in full by April 2016 and several softer intermediate targets will be applied before then to help progression towards the end goal. The new consultation will remain open for responses until 13th February 2014.

As a side note, today’s consultation also includes another mild update to Ofcom’s original charge control consultation (here), which proposed to reduce the cost of BT’s fixed line wholesale broadband and phone services (WLR, SMPF, MPF) to communication providers. As above the change remains in the order of a few pennies and is not yet finalised.

UPDATE 9:30am

The following is a statement from Openreach.

An Openreach Spokeswoman told ISPReview.co.uk:

“There is nothing terribly new here as service level agreements have existed for many years with Openreach compensating ISPs if it doesn’t deliver against targets. The fact is that it does meet those targets on a regular basis.

Openreach is focused on customer service but it has to be recognised that improvements come with a price tag. Openreach’s charges are already amongst the lowest in the world – allowing UK consumers and businesses to enjoy very low prices – so the challenge is balancing those low prices with an increased focus on service.

Our concern is that the prices being proposed are insufficient to fund the higher level of service that Openreach wishes to deliver and its customers expect.

BT is disappointed that Ofcom wants to extend the unfair regime whereby third parties benefit from cheaper wholesale prices than BT Retail. TalkTalk and Sky have benefited from artificially low prices for many years now and it is time they were forced to compete on a level playing field.”