City Leaders Warn UK Full Fibre Rollout is Uncoordinated and Inefficient

Political leaders from 20 cities and towns across the North of England have written an Open Letter to Ofcom that calls for a more coordinated way of deploying new Gigabit capable Fibre-to-the-Premises (FTTP) based broadband ISP networks, which could speed-up the effort by avoiding the need to dig up streets several times over.

The letter, which is being supported by the independent Northern Powerhouse Partnership (NPP) and has been signed by the leaders of various city councils (e.g. Bradford, Manchester, Leeds, Sheffield and Newcastle), wants to see every home and business in the top 30 northern towns and cities being completely covered with “full fibre” by 2025.

The NPP suggests that even delivering just 50% FTTP coverage across the so-called “Northern Powerhouse” area could boost the economy by £26.2bn, rising to £47.2bn at 90% coverage. Such figures should always be taken with a pinch of salt because it’s notoriously difficult to accurately gauge the economic impact of increased broadband speeds from new infrastructure.

Meanwhile the government has already made clear that they want 15 million premises to have access to “full fibre” broadband by 2025 and then nationwide to all by 2033 (here), although last year’s related Future Telecoms Infrastructure Review (FTIR) stopped short of recommending any changes to tackle the challenge of overbuild between networks.

Henri Murison, NPP Director, said:

“Towns and cities across the Northern Powerhouse eagerly anticipate full fibre roll-out and its transformative potential to unlock productivity. But this letter highlights leaders concern that the North’s full fibre future is at risk from uncoordinated investment, acting against the interests of business and home customers.

In some cases we are seeing the needless duplication of full fibre networks, while at the same time, short distances away, other Northern towns and cities with no planned investment, risk being left behind on antiquated copper networks, missing out on the huge benefits full fibre brings.

If we are to close the productivity gap between North and South we need to be attracting businesses to come here and help others grow. Digital connectivity can and must play a major role.”

The letter appears to be seeking greater coordination between operators (e.g. Openreach, Cityfibre, Virgin Media, Hyperoptic etc.) in order to reduce the prospect of investment duplication, limit disruption from local street works and thus cover a wider area with the same amount of funding. All of which is easy to say but rather more difficult to deliver due to the aggressively competitive nature of the current commercial roll-outs.

In commercially competitive urban areas it’s quite normal for broadband operators to end up overbuilding each other with rival infrastructure (e.g. Openreach and Virgin Media). The move to build a new generation of FTTP networks, with investment flowing toward lots of alternative networks (i.e. weakening the hold of Openreach and Virgin Media), is essentially recreating this scenario for a new generation.

On the one hand this benefits consumers who will find themselves with a wider choice of broadband infrastructure. On the other hand, aside from the issues mentioned above, it can also create a problem for the providers as such networks are expensive to build and it could become more difficult for operators to gain a return on their investment.

Operators do try to avoid overbuilding but as they grow in scale then such clashes become inevitable (e.g. Cityfibre and Openreach in Coventry), although in some cases this can be mitigated by using existing infrastructure. For example, Openreach’s revised Physical Infrastructure Access (PIA) product can make it cheaper and easier for rivals to deploy their own “full fibre” broadband networks via existing cable ducts and poles.

An Openreach (BT) Spokesperson told ISPreview.co.uk:

“The Government and Ofcom have set a policy which encourages digital infrastructure competition and we support that.

Openreach already has a national network of underground ducts and poles, so we’re reusing that wherever possible to build faster, more reliable and future proof broadband. This network is available for other companies to use too, so it should reduce the need for roadworks.

Meanwhile we’ve been developing a raft of innovations and techniques which help us avoid closing roads and digging new trenches – such as ‘overblown’ fibre cables, endoscopic duct cameras and drones.

We’re also working closely with local authorities and highways agencies across the country to minimise disruption and coordinate works with other utilities wherever we can.”

Admittedly PIA, in the eyes of Openreach’s opponents, still has plenty of problems to overcome (here) and can’t be used everywhere, although Ofcom have proposed further changes that could help to make it more accessible (e.g. the possible adoption of “unrestricted usage” and better service level agreements etc.). But even with those changes PIA is only part of the puzzle and rival operators will still have to dig most of their own trenches.

The idea of achieving full co-ordination between such bitter rivals, which each tend to have their own build philosophies, regulatory considerations, standards, competitive interests and engineering teams / contractors, will not be an easy task and may be unachievable without radical change (like herding lions and hyenas together).

As state earlier, overbuild remains inevitable in such an aggressively competitive market and this tends to result in winners and losers (can vary depending upon the area). If left unchecked then natural market dynamics will eventually solve this (e.g. consolidation), although by then a lot of the overbuild may have already occurred.

The question of whether or not radical change will be needed is one for the Government to answer, although there’s clearly an appetite among alternative network providers for greater intervention (here). However politicians have to weigh this against the dangers of disrupting the existing competitive commercial environment and inward flood of investment.

For now it may just be a game of wait and see, with the big changes reflecting lots of tweaks around the edges to encourage broader deployments from all operators (e.g. softer regulation on planning, more access to Openreach’s ducts etc.). Caution and carrots, but few sticks.

UPDATE 2:07pm

We have the following comment from Cityfibre.

Greg Mesch, CEO of CityFibre, said:

“While the benefits of having competing full fibre builders at a national level are already clear – faster services, lower prices and greater reliability for consumers – at a local level, duplicative fibre rollouts will deliver no additional benefit to communities and starve other areas of investment altogether.

It’s critical that the voice of cities, their leaders and communities is heard. It is in their interest and in the national interest that coverage is maximised and that no area misses out.”