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Ofcom Push Dark Fibre and Unrestricted Openreach UK Duct Access

Friday, May 24th, 2019 (7:53 am) - Score 5,186
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Ofcom has today proposed changes under their latest UK Physical Infrastructure (PIR) and Business Connectivity Market Reviews (BCMR), which imposes tougher service quality standards upon Openreach’s (BT) network, introduces a regulated Dark Fibre solution and gives ISPs “unrestricted access” to their cable ducts and poles.

At present only around 7% of UK premises can access a Gigabit speed Fibre-to-the-Premises (FTTP) broadband ISP network (up from 3% a year ago) and the regulator is keen to foster this, while also taking account of the proposals that were made as part of the Government’s Future Telecoms Infrastructure Review (FTIR); this aimed to stimulate the market toward delivering nationwide “full fibre” coverage by 2033.

Suffice to say that the new reviews have both been designed to feed into the aforementioned objective, albeit at the same time as “preserving incentives” for BT Group to invest in doing more fibre. Indeed Openreach recently raised their FTTP ambition from 10 to 15 million premises passed by around 2025 (here) and the regulator needs to be careful about not discouraging such work.

On the flip side Ofcom also recognise that alternative network ISPs, such as Cityfibre, Gigaclear and Hyperoptic (see our Summary of Full Fibre Plans), are having an increasingly big impact upon the market and they want to support those too. As such the regulator has today set out a series of changes that they hope will act to stimulate the wider market and raise standards.

Market Definitions

To understand how competition varies geographically Ofcom have divided the UK into areas based on the number of competing networks. They categorise the areas as:

• BT Only;

• BT+1 competitor; and

• BT+2 or more competitors – high network reach (HNR) areas

Ofcom has also defined two product markets for contemporary interface (CI) services (connections over fibre typically using an Ethernet interface):

• CI Access services, which are the connections to end-user business sites (such as office buildings or mobile base stations); and

• CI Inter-exchange connectivity services, which consists of the connections between BT exchanges in different geographic areas (such as between towns and cities).

Unrestricted Cable Duct & Pole Access (PIA)

Openreach already offers a revised cable duct access solution through their Physical Infrastructure Access (PIA) product, which allows rivals to install their own fibre optic cables through the operator’s existing network. At present this adopts a “mixed usage” model, which means ISPs can deploy local access networks offering both broadband and non-broadband services, provided the primary purpose of the network is the delivery of home broadband.

By comparison today’s move to introduce “unrestricted usage” means that companies offering high-speed lines for large businesses/mobile/broadband operators will also be able to harness PIA, which Ofcom hopes will help to grow the business case for such investments and thus boost the overall reach of fibre infrastructure. Admittedly this may not solve all of the gripes around PIA (here and here) but it is a big change.

Ofcom has also decided to set price regulation on the unrestricted PIA rental services, imposing a level of maximum charges identical to those set out in their 2018 WLA market review for mixed usage PIA. As a side note it’s worth remembering that the PIA product has no usage or geographic scope restrictions, unlike the next change.

The regulator notes that Virgin Media, TalkTalk and CityFibre are among the firms already using Openreach’s ducts and poles to connect thousands of homes and businesses to faster, more reliable broadband (example). Between them, competing providers are using around 12,000 Openreach telegraph poles and 2,500 km of underground duct.

Dark Fibre

Ofcom’s 2016 attempt to introduce a regulated Dark Fibre Access (DFA) product upon Openreach (here), which would have allowed rivals to gain “physical access” to Openreach’s existing fibre optic cables (i.e. enabling them to install their own equipment at either end of the fibre within cable ducts), suffered a spectacular failure after the courts rejected Ofcom’s market definitions (here and here).

The regulator’s plan was to make DFA available in all parts of the UK (RoUK) except central London (including the City of London and Docklands), which didn’t just irritate BT but also other full fibre builders (e.g. Zayo, Cityfibre, Virgin Media etc.) who warned that it could act to discourage investment in the construction of new fibre optic networks.

By comparison today’s new Dark Fibre solution is much more restrictive and will only be available for connections from exchanges where BT faces no competition from rival operators. This reflects the inter-exchange connectivity market, which means the connections between BT exchanges in different geographic areas (e.g. between towns and cities).

Ofcom Statement on Dark Fibre

There are some areas where duct and pole access is unlikely to have a material impact on competition. In the BCMR, we have focused on inter-exchange connectivity routes from the circa 3,700 exchanges where BT faces no competition from rival operators and there are no rival networks within 100m, making network extensions unlikely.

Rival networks are too far from these exchanges to make it economically viable to serve them, even with duct and pole access. This means telecoms providers who purchase wholesale access services from these exchanges have no choice but to use BT as their supplier.

Given the low likelihood of network competition, we are imposing a requirement for dark fibre at cost for inter-exchange circuits that connect to these locations.

In our view this will work for ISPs who are based in Openreach’s exchanges and want to backhaul (capacity supply) between them, but it may not be of much use for alternative network ISPs that are not based in such exchanges (e.g. B4RN). This is all very different from the original DFA product in 2016, although Ofcom has hinted that they may in the future try to extend their Dark Fibre solution again.

New Openreach Quality of Service Standards

As usual Ofcom’s review has included a range of new Quality of Service (QoS) changes, which essentially impose rules about the minimum level of service required for new line installations and repairs etc. The focus here is all about encouraging the operator to get key pieces of work done more quickly.

In keeping with that the regulator are imposing QoS standards on Ethernet services in the CI Access services markets in BT Only and BT+1 areas, and in the CI Inter-exchange connectivity market, at BT exchanges where it is the only provider or where there is only one other provider present.

We have decided to include dark fibre within the scope of the QoS standards in the second year of the market review period (1 April 2020 to 31 March 2021). We are not imposing QoS standards in the Metro Areas or other High Network Reach areas, or on WDM circuits,” said Ofcom.

openreach_quality_of_service_2019_standards

Overall this represents a gradual continuation of the current QoS standards and it’s worth noting that Openreach already tends to beat these (e.g. looking at certainty cross-link and the 53 working days target, Openreach currently delivers within 44.2 days and 94.6% of faults are repaired within the SLA etc.).

Jonathan Oxley, Ofcom’s Competition Group Director, said:

“The amount of internet data used by people in the UK is expanding by around half every year. So, we’ll need faster, more reliable connections for our homes, offices and mobile networks.

Our measures are designed to support the UK’s digital future by providing investment certainty for continued competitive investment in fibre and 5G networks across the country.”

An Openreach Spokesperson said:

“Last year we delivered our best ever service performance, but we want to keep improving and we share Ofcom’s desire to improve service across the industry.

Our ducts and poles have been open to other companies since 2011, and we recognise that unrestricted access is a natural next step so we had volunteered to get on with that, ahead of Ofcom’s original schedule.

We welcome the greater clarity around Dark Fibre and the timeframe needed to deliver a fully functional product to market.

We’ll consider the range of proposals carefully, and we’ll continue to work with Ofcom on developing an environment that encourages greater investment.”

Separately Ofcom has unsurprisingly found that KCOM has Significant Market Power (SMP) in the wholesale CI Access market for Hull (East Yorkshire), although the changes they propose are fairly minor (mostly centred on extra cost accounting and more information sharing with the regulator).

On the flip side they intend to deregulate the Hull area retail market for CI leased lines and in the wholesale and retail markets for low bandwidth TI leased lines (this is mostly because KCOM now has rivals in these markets). “We consider that these markets are no longer susceptible to ex ante regulation and have therefore removed all remedies in these markets,” said Ofcom.

Otherwise today’s decisions are a draft statement (not final – pending EU approval) and the new regulations will thus cover the period from their final decision, until April 2021. Ofcom said they will aim to implement the new duct and pole access changes 1 month after their final statement, while Dark Fibre will have to be provided from 6 weeks after their final statement.

The final statement itself, subject to any unlikely last minute delays from the European Commission, is expected to be published during June 2019. We should add that in the future Ofcom intends to combine such reviews into a single study and this process will start sooner than you think.

We intend to consult in December on detailed proposals for a single, holistic residential and business telecoms market review, covering the period 2021 to 2026,” said Ofcom. We can only imagine how much of a headache it will be to report on such a vast review, given that these individual ones can already run to hundreds of pages.

UPDATE 9:37am

Added a comment from Openreach above.

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Mark Jackson
By Mark Jackson
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 Twitter, , Facebook and Linkedin.
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18 Responses
  1. Avatar Christopher Woodhead

    I have fttp and I can not access 1Gbps. The most I can get is 300 download and 50 up. Virgin media have said they are going to offer 500Mbps and BT are lagging behind again for no reason when I have fttp

    • Avatar New_Londoner

      I’m pretty sure that you can get 1gbps on Openreach FTTP, you just need to select an ISP that offers the service. These tend to be ones targeting SMEs as they are more likely to have a real need for that much bandwidth.

    • Avatar CarlT

      Those on ECI equipment may only order 330.

    • Avatar adslmax

      Virgin Media will not sold 500Mbps standalone or with phone line at present. Only with V.VIP bundle.

    • Avatar Mike

      VM 500Mbps is available standalone if you order via the business section.

    • Avatar Peterson Bertalinon

      Sorry to disappoint your sir but that’s not FTTP lol.

    • Avatar Go away Max

      Except where it is

  2. Avatar StillWaitingForSuperFast

    Using poles would seem to be a very fast way to deploy fibre but I never see this happening. Gigaclear and Truespeed, both deploying very slowly in my area, use trenching. Anyone know why? Or will this change with this announcement?

    • Avatar Jim Weir

      Truespeed deploy using both WPD pole sharing and Openreach PIA plus some own Aerial and U/G infrastructure they build themselves.

      Gigaclear have always only built their own U/G duct infrastructure but whether this ever changes with the pressures they are facing time till tell.

    • Avatar Joe

      In the long term buried/own ducts is the cheaper more reliable solution. Certainly not cheaper in the short to medium though.

      Be interesting to hear GCs calculations on this one.

    • Avatar CJ

      New buried ducts alongside existing openreach ducts should not be the cheaper solution over the short or long term unless the openreach ducts are already close to being full. Apart from the initial build cost, two sets of ducts would need ongoing maintenance rather than one so it should be cheaper to maintain one duct and share the cost.

      If new build is genuinely cheaper, that implies either the costs for using openreach ducts have been set too high or the ducts are in such bad condition that it would be cheaper to just start again than to repair them.

      There are some who believe openreach should bear the full cost of duct maintenance regardless of other telco’s using them, but that’s frankly unreasonable. It might be appropriate for telegraph poles which need to be maintained for safety reasons but a duct only really needs to be in top condition at those times when someone wants to pull a new cable through it.

    • Avatar Joe

      Rural GC is buried as there are few ducts to use. They could go on BTs poles but I can see lots of reasons not to use them. BT Rural ducts seem (so afar one can quantify it) to need a lot of clearing for access.

    • Avatar StillWaitingForSuperFast

      @Joe – lots of reasons not to use poles? Ok, I can think of two: aesthetics and the fact that the cables are open to the elements. The 80 year old copper outside our house seems to have lasted OK though, with minimal maintenance. Its got to be a hundred times quicker than tenching. Patches of badly redone tarmac do not look that nice either.

    • Avatar Joe

      Setting the cost aside – they don’t always go where you want them to! BTs pole routes often reflect the priorities of the phone network c1960!

      Storms cause regular damage obviously, higher wear and tair generally. Accidents happen at a fair regularity. Farmers flail poles, hit wires etc!

    • Avatar JamesMJohnson

      The main reasons I can think of are snagging, thermal expansion and wear.
      Copper is strong enough to handle thermal expansion, constant flexing and stress from branches on lines etc.
      I doubt fibre can handle them at the same levels.

    • Avatar Meadmodj

      Physical infrastructure isn’t free. OR spend hundreds of millions on BT infrastructure each year. Duct can get damaged or silt but is fairly durable. The main cost is in maintaining structures from small footway boxes to multimillion pound manholes and old tunnels. Parking on pavements doesn’t help with the covers. So it is not just the installation but the ongoing liabilities whoever the owner is.

      I followed some Cityfibre reinstatement recently in Chichester which appeared to go from a BT main distribution manhole round a couple of corners to pick up the BT duct into the hospital meaning Cityfibre did not have to follow directly the BT duct layout or lay excessive duct themselves. So we may see a hybrid of infrastructure appearing.

      Ofcom have purposely excluded VM duct for the time being which is a shame, particularly in BT direct buried or OH areas.

    • Avatar The_builder

      Arial deployment is generally lot cheaper than underground but with BT Poles, you are dealing with existing infrastructures which are mostly old, less flexible in terms of capacity and sensitive to loading. With millions of poles out there it would be difficult to keep on top of maintenance and it is not easy to increase capacity on poles or installing additional poles would be just nightmare where as installing new chamber may not be depending upon where you are deploying the network.

  3. Avatar Peterson Bertalinon

    stop complaining brits :D. Stay with dialups and be happy haha.

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