Rival UK ISPs Raise Alarm Over Full Fibre Competition and Openreach
A number of broadband ISPs including TalkTalk, Hyperoptic, Cityfibre and Gigaclear, as well as the Independent Networks Co-operative Association (INCA), have written to the UK Government and Ofcom in the hope of encouraging tougher measures to prevent Openreach (BT) from hampering “full fibre” (FTTP) competition.
The government has already made clear that they want 15 million premises to have access to Gigabit capable Fibre-to-the-Premises (FTTP) broadband by 2025 and then nationwide to all by 2033 (here), although the latter date would require a huge public investment (i.e. not commercially viable in rural areas without it) and is currently just a largely unfunded aspiration.
For its part Openreach have already committed to roll-out FTTP to 3 million premises by the end of 2020 (March 2021 financial) and they’re in the process of negotiating to ensure a favourable regulatory environment, which could enable them to extend this deployment to 10 million premises by around 2025. At present nearly all of this work reflects a purely commercial investment.
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However Openreach are not the only game in town. Over the past couple of years a growing number of alternative network (AltNet) ISPs have committed to do major roll-outs (see our ‘Summary of Full Fibre Broadband Plans‘). For example, Cityfibre have committed £2.5bn to deliver 5 million FTTH premises alongside Vodafone (here), while Hyperoptic plan 2 million by 2021 or possibly 5 million by 2024 (here) and Virgin Media are hoping to add 2 million.
Nearly all of this battle is taking place in commercially competitive urban areas, but some ISPs still fear that Openreach could use their weight in an anti-competitive way. For example, Cityfibre was less than pleased when, after announcing their intention to cover the city of Coventry, Openreach came out and did the same (here and here).
Balancing the threat from such overbuild is difficult precisely because, at this stage, we’re mostly talking about urban markets that have always been aggressively commercially competitive areas. Openreach and Virgin Media have both overbuilt each other and will continue to do so. Naturally the more players that venture into this market, the tougher it becomes to gain a return on such significant investments.
Calls for Monitoring Openreach
Over the past couple of years we’ve already seen Openreach become a “legally separate” company from BT, with its own largely independent board. Nevertheless rival ISPs remain concerned that BT could try to frustrate competition in the new “full fibre” market and they’ve once again called on the Government to take a tougher line.
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In particular The Sunday Times (paywall) reports that the ISPs want to see a new “early warning system” introduced to ensure a level playing field. This would be intended to tackle anti-competitive behaviour, although as usual the devil will be in the detail. Sadly the article doesn’t explain what key performance indicators such a system would use or how it might respond when triggered.
The letter alleges that Openreach still has the motive to “completely undermine” competition and that they seek to both protect their legacy products and establish themselves as the “monopoly full-fibre provider.” This seems unlikely to happen, albeit only while the market remains as competitive as it is today.
The Response
In response the Government’s culture secretary, Jeremy Wright MP, merely said that they’re continuing to monitor how negotiations are going. Meanwhile Ofcom added that they “remain vigilant” of situations where Openreach could use a “first-mover advantage” and “specific predatory actions” to undermine rival altnets.
Finally, Openreach noted how they are already a highly regulated business and will work closely with Ofcom and the Government in order to fulfil their commitments regarding transparency. We should add that the Government have so far shown little interest in preventing commercial overbuild by rivals, particularly in urban areas where aggressive competition is a fact of life (i.e. they opted not to act in the Future Telecoms Review).
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Nevertheless we shouldn’t forget that Openreach’s current FTTP products tend to be significantly more expensive and slower than the ones now being built by rivals (i.e. when compared at the same price points). Indeed there is no guarantee that Openreach will remain the main provider for such services into the future either.
At present nobody has a true dominance in FTTP and it would be a mistake to assume that Openreach are the only ones to seek such a position going forward. The UK market is going through a rapid pace of change.
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 X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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I find this forum hilarious or deluded or both most of the time and no real view of the
commercial world
X complains that Openreach is over building city fibre network — hhmmm that would be the same city fibre that has been releasing press releases for umpteen years about X fttp and not actually delivering anything
interesting the view of Gigaclear seems to have shifted now if not the little plucky altnet but is in now large recipient of BDUK money and has to deliver on that (no real improvement in fastershire or CDS area)
going to be an interesting 2019 but lets be clear big FTTP deployments will only happen in urban areas where it is commercially easy to do and market conditions and Physical availability and access will determine how much will get done and more importanty there
if Openreach is going to deliver X premises it will be X premises , what these x premises are will move in and out as any challenges or cost issues arise in the same way the BDUK has done . Any FTTP Commercial deployment will be in highly populated area and cities are a prime example so I would expect a number of players in a number of cities .. , That does not actually helps anyone is very sparse and rural locations even USO wont help those in 2020 as USOP say you can demand a 10 meg service in the same way you can demant a telephone service – if it costs more that X you pay the difference (another nuance that seems to have been forgotten in the USO discussion) through my might be able to aggregate your USO (allowance)
“I find this forum hilarious or deluded or both most of the time and no real view of the
commercial world
X complains that Openreach is over building city fibre network — hhmmm that would be the same city fibre that has been releasing press releases for umpteen years about X fttp and not actually delivering anything”
Yes it is very funny that is exactly what BT done back in 2009 with their aspirations of 2.5 Million premises with FTTP……….. One decade later, have they done it? Noooooooope.
You could say the little business and any deception has learnt from the master overlord.
Whats that you were saying about some being deluded????
josewph
aspiration OF 25% fttp — that with Openreach commercial money (you get much more FTTC that would have have done with FTTP
Actually covered significantly more with FTTC that with FTTP due to build cost of FTTP at the time
had openreach built more FTTP at the time (2009 – 2012) the 95% coverage of greater that 30 M/BPS would be much less — (so openreach got on an delivered a proven technology that delivered the required premises in the required timescales (something other BDUK recipeints seems not to be able to do – cos its easy to deploy fttp – not)
actually openreach is deploying now significantly more FTTP than FTTC now, as the deployment method has changed and now the cost model has changed,
Im sure ISP review will follow the FTTP number that openreach are delivering
Coventry was about city number 8 or 9 — a significant number of Coventry area exchanges were covered as part of openreach 2.5bn commercial investment
im not centainly not deluded
what amusing is a load of people moaned when Opereach scaled back FTTP and now a load of people are moaning that Openreach is scaling up FTTP deployment
seems to be a common theme there !!!!–
“aspiration OF 25% fttp”
NO DIFFERENT TO CITYFIBRE and their ASPIRATIONS of x million premises covered.
Or as i said to start “You could say the little business and any deception has learnt from the master overlord.”.
Just shows you are now not about what is right, wrong, or indifferent. YOU just want everything BTs way. When BT do something wrong its ok, when someone else does the same thing though they are wrong.
when BT do something wrong its ok, when someone else does the same thing though they are wrong
actually what have Bt Done wrong =– nothing as far as I can see
they may not have done what you wanted them to do but that does not mean its wrong
Im sure if BT had actually done something wrong Ofcom would be all over it
most want their cake and eat it on this
Aspirations there is nothing wrong with those……. Supporting one organisations aspirations while bashing anothers there is though.
You try to figure out what you did in the short exchange.
You try to figure out which company of the 2 mentioned is the bigger company which is full of the hot air and which is the smaller and cleverly copied the hot air which you and your initial post had an issue with.
Good luck with that.
When G.Fast runs off a BDUK funded cabinet, does the uptake contribute towards clawback?
Gfast runs off a pod attached to a cabinet but afaik the answer is yes.
Seems unlikely as BDUK fund the VDSL cabinet.
My assumption would be if there was no cabinet but then there was via BDUK then anything coming via it even gfast (pod) is still happening because of the public money so will be counted.
No.
gfast is off the PCP be vert surprised if very many of BDUK cab get enabled for Gfast as most BDUK sevice small spread cab and mot wont be suitable for Gfast either ini terms of speed or in terms of Density to justify the commercial investment of deployment of Gfast
Hard to call on that, I can think of local villages in my area where the cab was bduk and there are enough properties within Gfast range to fill a pod so…..
Wow this has brought out some serious axe-grinding, mostly focused around people whose comments are based around screaming ‘What about me?!?!’.
An entertaining start to 2019: thank you.
definitely
going to be a Busy year as Ever CarlT – lots to do
@CarlT
Much as I like to be ‘informed’ I didn’t have the stomach to read all of the posts after skimming a selection.
Happy New Year to all contributors. And better broadband to all men….sounds familiar somehow…..where have I heard that before?
And thanks to @MJ for bring this feast of comment to us…….
But lets be happy that at least some fibre is getting put in the ground somewhere….allegedly….and we could even try and be supportive of people actually doing stuff as opposed to talking about it.
I will be happy (?) to read FTTP rollout and sign up statistics as they come in.
Joking apart if OR do try and pull the old bus company (flooding routes with busses that a competitor has started on) stunt all over the place they do deserve to be sat on by OFCOM. Purely because it is a well recognised anti competitive practice.
At present however I would be content if OFCOM sent them a memo along the lines of ‘we are keeping an eye on this’ and let everyone get on with building FTTP and instead focused efforts on making it cheaper quicker and easier to get the FTTP network built…..which is what everyone really wants anyway.
Definitely plenty of work going on. Tons of duct unblocking, pole replacement and pole install appearing on roadworks.org in the areas of the fibre cities scheduled for FTTP with the odd bit of traffic management for access to underground structures.
Jesus I’ve never seen so many comments based on a single article. Mostly from Max sorry Mark is on to a winner in 2019.
I think the key issue here is that many of the network operators have similar commercial models, Openreach included, so it’s hardly surprising if many of them focus on the same areas. Whether their cumulative efforts cover many additional premises versus Openreach by itself remains to be seen – I suspect the 15 million or so premises passed is more like 11 million unique premises once overlapping plans are accounted for.
Quite why the so-called alt-nets need any sort of protection from the free market is unclear when there are existing protections in the Competition Act, through the CMA etc. In reality this feels more like the sort of generic PR that certain operators and industry groups specialise in to deflect attention from limited results and/or to provide an excuse for lack of activity in the future.
What we are perhaps loosing sight of here is that there are two reasons for OR to invest
1) commercial case high take up profitable spreadsheet stuff
2) costs a fortune to maintain and so by investing some CAPEX OR save big time on the OPEX budget.
These two business cases are quite different. Most what we see is case (1) at the moment but case (2) becomes more and more important as the network ages and I am a bit surprised that we have not seen more case (2) activity as some of the rural stuff must cost fortunes to maintain and has zero chance of ever providing USO.