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Ofcom Satisfied with Openreach Split from BT, But Fibre Needs Work

Thursday, November 15th, 2018 (11:56 am) - Score 2,856
sharon white openreach fibre optic broadband fttp splice

The UK telecoms regulator has today issued an update on Openreach’s legal separation from BT. Overall they were “broadly satisfied with progress,” although Ofcom still wants to see more progress being made on improving “full fibre” (FTTP) and general broadband ISP connectivity.

At the end of last month Ofcom formally released BT from their 2005 Undertakings (here), which among other things meant that Openreach would now be subject to a different set of regulations and regarded as a “legally separate” company from its parent with its own independent identity, employees and board etc. (as set out in the 2016 Strategic Review).

Overall BT and Openreach have delivered on the vast majority of their core commitments, but today’s update still warns that the overall UK availability of “full fibre” (FTTP) broadband networks remains “low” at 5% (it may take a couple of decades to solve this). Ofcom said that, in terms of consumer outcomes and broadband, they assess Openreach’s performance in three areas using baseline metrics (tracked over time):

• Widespread availability of more fibre based broadband networks;

• Decent broadband connectivity for all UK consumers and businesses at a speed that is sufficient to meet modern needs; and

• A step change in quality of service, to ensure Openreach’s performance meets the needs of all wholesale customers, consumers and businesses.

The core metrics for these are displayed below and Ofcom has pledged to develop these further, which will be set out in more detail as part of next year’s annual progress report.

openreach broadband progress 2018

Currently it’s still unclear precisely what Ofcom expects Openreach to deliver on this front, except for vaguely demanding more of everything. So far Openreach has committed to roll-out Gigabit capable Fibre-to-the-Premises (FTTP) lines to 3 million premises by the end of 2020 and at the same time they hope to have spread their 300Mbps capable hybrid fibre G.fast technology to 5.7 million premises.

Meanwhile a question mark remains over the operator’s ambition to extend their FTTP roll-out to 10 million premises by around 2025, which they estimated could cost £300-600 per premises passed (total of between £3bn to £6bn); plus £175 – £200 to connect a customer.

Openreach has said the FTTP plan will require regulatory flexibility in terms of migrations (i.e. switching off old copper lines as FTTP goes live), reduced barriers to planning / civil engineering, wholesale tweaks and some other protection / support for their investment (“fair bet“).

The recent Future Telecoms Infrastructure Review (FTIR) has already delivered on some of what they, as well as other operators, were seeking. Nevertheless we’re still waiting for news of a final agreement and our bet is that it will surface after BT Group’s new CEO takes the reins, early next year (here).

Ofcom Statement

Overall, we remain broadly satisfied with progress. However, continued commitment from Openreach and BT is crucial to ensure the new arrangements are a success.

We recognise that the new arrangements represent the biggest ever reform of Openreach, meaning that the changes will need some time to fully bed in. Our focus is on making sure the new arrangements are leading to meaningful changes for the industry and delivering better services for consumers.

We will work closely with BT, Openreach, Openreach’s customers and other stakeholders to assess further progress that is being made through the remainder of the year. In June 2019, we intend to publish a full compliance report covering the period April 2018 to March 2019

A Spokesperson for Openreach told ISPreview.co.uk:

“The biggest ever reform of Openreach is happening alongside our largest ever recruitment drive and a huge acceleration in our network build programme.

We’re working hard to fully bed the changes in, and at the same time we’re developing better services for our customers, improved training and opportunities for our people, and more encouraging conditions for network investors throughout the UK.

We’re pleased that Ofcom recognises that progress, but we’re not resting on our laurels. We’re getting on with job of building faster, more reliable, futureproof broadband infrastructure for the nation.”

However Ofcom noted that industry feedback had also raised some “specific concerns” about the “ability for Openreach’s behaviour to impact on industry outcomes“. In particular, some ISPs appear to be worried that the greater access now being offered to the operator’s cable ducts and poles (Physical Infrastructure Access) might not be “suitable for … [deploying] FTTP at scale.”

Meanwhile some others worry that the “way Openreach rolls out its FTTP network could undermine investment.” For example, some operators (e.g. Cityfibre) are likely to have been angered by Openreach deploying FTTP into the same urban areas as them, which could be seen as an attempt to crowd out smaller rivals.

On the other hand dense urban areas have always been an aggressively competitive minefield and inevitably many of the commercial deployments will focus on the same areas, much as they did in the past between BT and Virgin Media. The FTIR opted not to take any dramatic action to limit urban overbuild.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
3 Responses
  1. Joe

    I was going to write a parody latter from ofcom to BT but tbh the truth is too depressing.

  2. Marty

    Hey don’t worry today might still be a good day. Since resignations are popping up all over the place in the government maybe Sharon White might find a disagreement with Brexit too.

    We can all live in hope 🙂

    • Joe

      Wishful thinking. Quangos as like the old joke about cockroaches they’d survive a nuclear fallout! Brexit won’t get them

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