Ofcom and Openreach Trial Cheaper UK FTTC Broadband Upgrades UPDATE

The UK telecoms regulator, Ofcom, has begun a consultation on the proposed introduction of a new “bulk upgrade process,” which requires an exclusion in Openreach’s (BT) quality of service regulation but would make it more efficient for them to upgrade slower lines to FTTC (VDSL2) based broadband ISP connections.

Apparently ISPs that use Openreach’s network have been calling for a “more efficient and cost-effective” way to upgrade existing retail customers to higher-speed products, which is particularly important given all of the discounts and offers that the operator is currently promoting in order to encourage stronger take-up.

The proposed solution to this is a voluntary new installation process that will allow providers to upgrade their standard broadband customers (e.g. copper line ADSLMax / ADSL2+) to “superfast broadband” (FTTC) products in batches, at a given street cabinet, and at a lower price per line.

Openreach started a trial of this new approach on 28th October 2019 and no doubt their plans for a full launch will be subject to both the results of that and this consultation document.

The Regulator’s Proposal

We are proposing to agree to Openreach’s request, given that a more efficient and cost-effective upgrade process would benefit people and businesses. This means orders completed using Openreach’s ‘Bulk Grouping provision capability’ would be exempt from certain quality of service regulation requirements for the remainder of the 2018-2021 review period.

We will monitor Openreach’s service performance, using information collected from Openreach about orders using this process. We remain open to imposing additional standards on these orders in the future if we consider it appropriate.

Assuming all goes well then the new method could be introduced from sometime during “early” 2020. We suspect any cost savings would not be passed on to consumers but that would be up to ISPs.

UPDATE 27th Nov 2019

In speaking to Openreach about this it has become clear that the way Ofcom wrote their consultation did not give the correct reflection for the proposed exclusion. For example, Ofcom repeatedly mentioned “ultrafast” and “superfast” products but in fact it only applies to “superfast” VDSL2 based FTTC lines.

The regulator also stated that reducing costs in this way might require Openreach to delay completing some jobs until there is a sufficient volume from a given ISP at a given cabinet, which in turn would attract different contractual terms. However Openreach says the discount is not dependant on delaying job completion, it’s the same street cabinet (PCP) jobs being done by one engineer (i.e. more efficient).

Openreach said they will not delay completion of any jobs awaiting volume. ISPs will prepare bulk upgrades for existing customers and supply Openreach the details when they are ready to place orders.