Persimmon Homes Criticised Over FTTP Broadband Monopoly Claims UPDATE2

Property developer Persimmon Homes is facing criticism from several UK MPs, which comes after residents on some of their new build home sites alleged that they’d been left them with no option but to use the Fibre-to-the-Premises (FTTP) broadband network provided by the same group (via ISP FibreNest).

The situation will be a familiar one to readers of ISPreview.co.uk as we’ve touched on it before, but first a recap. Not so long ago the market was very different from today, with Persimmon predominantly deploying broadband and phone services by working alongside existing telecoms operators (e.g. Openreach, Virgin Media etc.), which is how a lot of new build home developers work.

However, back in 2018 the property developer undertook a strategic venture to launch FibreNest, which meant that they could build their own “full fibre” (FTTP) service alongside the construction of new build homes (cheaper to deploy). Customers on this pay from £14 per month for a 10Mbps (1Mbps upload) package, and this goes up to £45 for 500Mbps (50Mbps upload).

Today, Persimmon’s own fibre network covers tens of thousands of UK premises, and they’ve managed to sign-up 14,000 customers, which is pretty good considering how young the network is. But the figures aren’t that surprising when you consider that FibreNest may be the only ISP choice for FTTP (here).

On the one hand, Persimmon residents can often enjoy better broadband speeds than many other parts of the UK, but on the other hand their options for an alternative may be very limited. According to the Daily Mail, several MPs have now criticised Persimmon’s approach for what they perceive as allegedly creating a monopoly.

John Hayes, Conservative MP for South Holland and The Deepings, said:

“These huge building firms should not be taking advantage of homeowners for the sake of their own financial interests. No residents should be tied to the builder’s own provider and forced to dance to their tune.”

John’s comment was also echoed by the Labour MP for Sefton Central, Bill Esterson, who views the developer’s approach as “predatory behaviour.” In response, Persimmon said that by deploying their own FTTP they’re often able to bring better broadband speeds to consumers sooner than if they left it up to others, which may take longer to install after a home move. However, most networks are now building FTTP by default and are still keen to work with new build sites – often at no extra cost to the developer.

Persimmon added that rival operators are also able to run their own fibre through the infrastructure they build on-site (we assume they mean cable ducts etc.). But some residents claim to have been told by BT that Openreach were unable to extend FTTP into such sites due to a FibreNest exclusivity agreement (we’re currently trying to clarify this).

On top of that, it’s always much harder (commercial viability) for rival FTTP operators to make a workable model for building into an area where an established player has already signed-up the majority of homes. Not that this has stopped that from happening in dense urban areas (e.g. CityFibre’s build vs Openreach and Virgin Media etc.).

We should add that the property developer has also pledged that FibreNest customers will never have to pay more for the same speed as they would with BT, which may give some comfort. But then BT is just one ISP in a growing sea of choice, and they’re not always the cheapest of options.

The big question is what, if anything, might be done about all this? At present, aside from a few gripes by MPs and consumers, Persimmon are still a fairly small FTTP operator, and they’re one of only a very few that seem to be taking such a vertically integrated approach on new build sites. Others, like OFNL (GTC/BUUK), may have a similar outcome, but they also wholesale to other ISPs.

Suffice to say that there are both pros and cons to the developer’s approach, but Persimmon are ultimately working within the law. We also shouldn’t forget that fixed line broadband isn’t the only way to get online these days, with 4G and 5G based mobile broadband becoming a viable option in some areas. The best thing that new house buyers can do is to stay informed, so that they can make the best decision before signing on the dotted line.

UPDATE 9:56am

According to UK ISP Aquiss (here), getting access to Persimmon’s sites can take a very long time: “Other network providers often can’t touch new build Persimmon sites until the developments are handed over to the local authorities (which can take up to 10 years).” Aquiss also mentioned that they “have had customers pull out of house sales because their broadband options were to be restricted to FibreNest.”

UPDATE 12:22pm

Persimmon informs that they are “currently in the process of inviting alternative internet service providers to offer their services to customers over our infrastructure,” although it’s unclear when there will be an outcome to that.

In addition, we note that rivals seeking to deploy FTTP on to such developments may have to do so through the Access to Infrastructure (ATI) Regulations 2016, which in some cases have been known to create costly barriers and may not align to the way that such networks conduct their rollouts (i.e. both cost and practical deployment barriers can be an issue).

However, the Government have been exploring the possibility of greater sharing via existing infrastructure under the ATI (here).

UPDATE 9:18pm

We’ve had a statement from Persimmon on our question about the existence of an exclusivity arrangement, although it’s a little light on detail.

A Spokesperson for Persimmon Homes said:

“We don’t have a formal exclusivity agreement. On a development-by-development basis we make a judgment to ensure other providers installing their infrastructure would not jeopardise our ability to deliver day one FTTP connections to our customers.

It was because of the significant number of complaints from customers who were not connected that we created FibreNest in the first place.

We remain very happy to speak to other infrastructure providers regarding any plans they have.

Equally, we have already and continue to encourage other providers to use our existing fibre infrastructure for their services.”