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Openreach Sets Price Hikes for UK ISPs Feeding FTTP via Leased Lines

Thursday, August 26th, 2021 (1:23 pm) - Score 6,048
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Openreach (BT) has today set out the wholesale prices that alternative network (AltNet) builders will have to pay when using the operator’s Ethernet (e.g. EAD) products to feed their gigabit-capable Fibre-to-the-Premises (FTTP) broadband services to end-users, which caused some annoyance within the market.

The issue arose after Openreach last year (here) shocked smaller AltNets with a new charge notification, which was originally due to be introduced on 1st January 2021 and centred around “price changes for leased line circuits being used to aggregate FTTP to multiple premises” (Briefing GEN102/20). Suddenly such ISPs found themselves facing a new annual charge, which ranged from £560.00 +vat on 1Gbps Ethernet (e.g. EAD) products and went all the way up to £11,060.00 for certain other optical spectrum products.

Some AltNets described the change as “overtly aggressive,” while others said it was “punitive,” reflected “totally shocking behaviour,” and several viewed it as a “massive game changer for the UK altnet industry.” But despite those complaints, Ofcom’s Wholesale Fixed Telecoms Market Review 2021-26 ultimately waved the changes through (here).

We do not consider such access to be reasonable as telecoms providers already deploying their own fibre access networks are able to use [Physical Infrastructure Access] for these connections,” said the regulator while making reference to the product that allows AltNets to run their own fibre through Openreach’s existing ducts and over their poles.

However, Openreach did recognise that such providers needed more time to adapt and as such they opted to delay the introduction of their change from January 2021 to the new effective date of 1st December 2021. Today’s briefing is thus effectively a re-announcement of those price hikes, albeit centred around the new date.

Katie Milligan, OR MD of Customer, Commercials and Propositions, said:

“We’ve just let Communication Providers (CPs) know about a change to the prices we charge for any leased lines that are being used to aggregate FTTP to homes and businesses from aggregation nodes (for example street cabinets).

We originally announced this change back in November 2020 to be effective from 1st January 2021, but we postponed that until 1st December 2021 to give our customers more time to prepare.

CPs can also continue to use our national network of ducts and poles (known in the industry as ‘Physical Infrastructure Access’ or ‘PIA’) as this product is specifically designed to support new FTTP network builds.”

Apparently, orders for such products that were placed before 1st December 2021, including completed orders, will be unaffected by this policy change, provided that they are not subject to an A-end or B-end rearrange or upgrade orders on or after 1st December 2021.

Where Openreach believe an ISP / AltNet has omitted to self-certify an order, such as one believed to have been placed for the purpose of aggregating FTTP to multiple premises, they will seek clarification of the use case of the relevant circuit(s). Where it is confirmed that circuit(s) are being used for FTTP aggregation, but were not self-certified at order entry, the applicable annual rental charge listed for where the service is used for FTTP aggregation will be applied from the point of confirmation, and the provider will be charged the applicable annual rental charge back to the date of provision, for orders placed from 1st December 2021.

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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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11 Responses
  1. Peter says:

    Isn’t this what Hyperoptic does?

    1. Vince says:

      It’s what an awful lot of people do. Because there isn’t that much choice for backhaul circuits out there especially in places you might happen to setup an Altnet.

    2. Ad says:

      Hyperoptic are doing a lot more with PIA now, however the Openreach document linked covers their usage.

      As long as it is a circuit to a single Multiple Dwelling Unit (MDU) then the surcharge does not apply. If they ran it to an apartment complex that had multiple blocks then it would potentially apply. So Hyperoptic using them to supply a single block of flats even with Fibre no surcharge, other Altnet supplying a similar number of houses from a cabinet gets a surcharge!

    3. MattP79 says:

      Can’t advise if it is, but there’s some shelter for their model in clause 5 of the re-released announcement:

      “Guidance note 5. This change does not apply to leased lines serving a single building which is split down to serve multiple units typically for business, but also residential (Multiple Dwelling Units)”

      What’s the options for the alt-nets to replace Openreach for this function?

  2. Karen says:

    Price segmentation is done all the time by all sorts of industries. Some phone companies charge more for weekday daytime calls than evening or weekends.
    Hotels charge more during the summer months.
    Air flights get more expensive during holiday times

    A leased line is a leased line. Openreach should be agnostic about what data is being carried. The type of data doesn’t make it any more expensive to operate. Perhaps the next thing is they will charge porn companies more to use the line etc etc.

    Now if Openreach stated it was a special product where there was a quicker fix time if there was a problem, then that would indeed warrant a enhanced price

    1. CarlT says:

      Neither does it make them cheaper – EADs are a regulated product. This is a side effect.

    2. wirelesspacman says:

      What amazes me is how Ofcom has blindly waved this through – the words “lost the plot” spring to mind.

    3. CarlT says:

      On the flip they happily regulated the price down.

      Maybe it would have been better if they’d let the market deal with it?

    4. Fastman says:

      karen

      Leased lines are normally point to point services – the issue was from my understanding leased lines were being used as a DIY version of PIA to build a FTTP network . which is i assume is why thay has been stopped as there is now a recognised product allowing an Altnet to do PIA. . so its either an EAD for a Point to point (service in the traditional way) or its a PIA — which is why i assume Ofcom ratified it .

    5. HDB3 says:

      I thinkit’s the location of the circuit end that’s the problem Karen, rather than the type of data. EAD circuits (I’ve bought hundreds, if not thousands, over the years) come with terminal equipment that’s designed to be installed in a rack or on a shelf in an office building comms room. It doesn’t work so well crammed into a metal cabinet outside subject to temperature extremes and moisture.

      PIA is a better product for FTTP providers to use. Presumably the extra cost comes with a hardened NTE better able to withstand ‘outside’ deployment.

  3. David Jones says:

    Its simple really, other CPS should use there own duct and backhaul.i bet any money Openreach can’t use other providers duct or backhaul. Its all one sided, Openreach have to give, give, give but they get nothing in return.

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