UPD2 Ofcom Consult on Cheaper Access to Openreach’s Cable Ducts and Poles

The telecoms regulator has today set out “detailed pricing proposals” for Openreach’s (BT) new Duct and Pole Access product, which allows their existing telegraph poles and underground cable ducts to be used by rivals in order to deploy new ultrafast broadband services (e.g. FTTP/H).

At present it’s already possible for ISPs to access Openreach’s existing ducts via the operator’s Physical Infrastructure Access solution, although rivals complained that PIA 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, although this helps alternative networks to build a more economically viable model).

Ofcom sought to address the above concerns via their Strategic Review proposals (here) and a related voluntary agreement with BT (here). Since then Openreach has developed an enhanced PIA2 style solution that they hope will meet the regulator’s requirements, which has already been trialled by five ISPs (e.g. Callflow, Cityfibre and Vodafone).

However the trials did suffer from a few problems with blocked ducts, limited duct space, cost and a lack of maps for new cables causing various hiccups (here and here). Openreach has already improved their mapping (here) and in April 2017 Ofcom set out their first Duct and Pole Access (DPA) proposals for “making it cheaper and easier” to access the operator’s infrastructure (here).

Today, Ofcom has published detail pricing proposals for the DPA product and they are also consulting on the methodology proposed to calculate maximum charges (based on Openreach’s methodology), which they say will “result in material reductions for the majority of rental charges.”

Ofcom Statement

Today, Ofcom has proposed to impose caps on Openreach’s rental charges for accessing its duct and pole network in order to increase certainty and predictability for investors. We are consulting on the methodology proposed to calculate maximum charges, based on Openreach’s current price calculation methodology. We anticipate this would also result in material reductions for the majority of rental charges.

In April, we also said that Openreach should repair faulty infrastructure and clear blocked tunnels on request. We proposed that the associated costs should be recovered from all users of the infrastructure. Ofcom is consulting on a range of £4,000 to £6,000 per km as a financial limit for the recovery of such network adjustment costs, with any costs incurred above this limit to be recovered from the telecoms provider making the request.

The proposals do indeed appear to represent quite a change from the current approach, which can be seen below.

It’s worth pointing out that Ofcom’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.

However BT has already warned that this will “not all translate into useable duct space” and that appears to be supported by evidence from the recent trials. Nevertheless Ofcom has previously said that “a good outcome in the long term would be to achieve network competition of around 40% of households” and today’s measures are another step in that direction.

An Openreach Spokesperson told ISPreview.co.uk:

“We’ll consider these proposals in detail before responding formally, but we’re encouraged that Ofcom doesn’t expect Openreach to cover all of the upfront investment in ducts and poles for other companies.

Our ducts and poles have been open since 2011 and Ofcom recognises we’ve taken big steps to encourage more companies to use them – launching an online mapping tool and making 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. That’s why we recently launched a consultation with Communications Providers to assess the feasibility of building a large-scale ‘full fibre’ network.

With the right conditions we believe we could make FTTP available to as many as 10 million homes and businesses by the mid-2020s, but we need to understand if there’s sufficient demand to justify the roll-out, and support for the enablers needed to build a viable business case.”

Today’s proposals form part of Ofcom’s wider 2017 Wholesale Local Access Market Review, which will cover the period from April 2018 to March 2021. The new consultation closes on the 12th September 2017 and the regulator aims to publish a statement in early 2018, with the new measures then taking effect on 1st April 2018.

Mind you there’s still a big question mark over the expected level of take-up for the new PIA / DPA solution, although recent announcements from Cityfibre and Hyperoptic hint that there might be quite a bit of interest.

DPA Pricing Proposals
https://www.ofcom.org.uk/../pdf_file/0019/105427/consultation-dpa-pricing.pdf

UPDATE 11:17am

Added a comment from Openreach above.

UPDATE 3rd August 2017

Now it’s Cityfibre’s turn to comment.

Alex Blowers, Cityfibre’s Head of Regulatory Affairs, said:

“CityFibre is conducting the largest trial of Duct and Pole Access, currently taking place in Southend, with a view to making use of DPA to accelerate our rollout of full fibre networks to up to a million homes and businesses. From that exercise we have developed a range of practical learnings that will allow DPA to be used at scale for FTTP deployment.

We welcome this further consultation as part of Ofcom’s continued efforts to make DPA useable and affordable. We are studying the proposals but our initial reaction is very favourable.”