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Ofcom Adds Dark Fibre and Tweaks Rules for KCOM in Hull UK

Thursday, October 28th, 2021 (11:30 am) - Score 3,384
kcom home fttp outside install

Ofcom has today published the outcome of their latest Hull Area Wholesale Fixed Telecoms Market Review 2021-26, which tends to largely influence what rules they set for KCOM’s dominant network in the Hull (East Yorkshire) area. The main changes this time reflect deregulation and a new Dark Fibre requirement.

KCOM, which is owned by Macquarie Infrastructure (here), has historically held a position of Significant Market Power (SMP) in Hull (at wholesale and retail level), although Ofcom has tended to be quite soft on the operator and that may be partly because they’re a significant local employer and financial contributor to the area. Indeed, the operator has invested a lot (£85m) to cover Hull with Fibre-to-the-Premises (FTTP) connectivity (c.200,000 premises).

On top of that they’re now investing c.£100m to extend this FTTP network to cover new parts of East Yorkshire and North Lincolnshire (here), which unlike Hull are areas where rivals like Openreach (BT) are already able to offer aggressively competitive FTTC/P products at wholesale (i.e. these competitive areas fall outside of today’s review).

On the flip side local consumers have often complained about a lack of alternative choices in Hull, except for in a few smaller areas where rivals do exist (some fixed wireless and FTTP solutions). For example, CityFibre has a Dark Fibre style network that serves local mobile masts and some businesses, but they have no plans for a wider rollout within Hull.

In addition, MS3’s network currently passes 2% of all premises within Hull and is within 50 metres of 8% of large business and mobile sites in Hull. It has plans to cover a further 21,000 premises in the Hull Area with full fibre broadband during the current review period, extending its network to reach around 13% of premises. It currently serves around 50-150 customers with broadband or leased line services.

Finally, some Fixed Wireless Access (FWA) networks exist from Connexin, Purebroadband, Quickline and Wisper. Overall, KCOM accounts for the vast majority (over 90%) of retail broadband supply in the Hull Area including FWA. Most of this comes from their new FTTP network.

Ofcom’s Proposed Changes in Hull

As we expected, the regulator hasn’t proposed too many changes for KCOM, but there are some limited developments on the Dark Fibre front (i.e. allowing rival operators to use KCOM’s spare optical fibres, where viable) and a few areas will also be deregulated.

Ofcom states that KCOM still has “a near monopoly at both the wholesale and retail level” in the Hull area. “Therefore, following consultation, we have improved our regulation to encourage competition in the retail broadband market. We believe there is now a better prospect of competing providers entering the Hull Area, which ultimately should result in more retail choice and lower retail prices,” said the regulator.

NOTE: Ofcom intends the new rules to apply from 1st November 2021 for 5-years.

Summary of Changes for KCOM

We have found that KCOM has market power in local access and leased lines access services. We address that market power by regulating in a way that supports competition and protects customers.

Encouraging competition in the retail broadband market. The move to fibre in both the Hull Area and the rest of the UK has the potential to encourage new providers to supply broadband in the Hull Area using wholesale products. In addition to ensuring that competitors will continue to have access to KCOM’s network on fair and reasonable terms, we will facilitate new entrants’ use of KCOM’s network by making improvements to the existing wholesale local access arrangements.

Promoting access for rival providers to KCOM’s leased lines access services, using dark fibre. Network providers will be able to lease from KCOM just the fibre element of a ‘leased line’ – the high-speed data connections used by large corporations and mobile networks.

Deregulating the wholesale broadband access and fixed voice markets. Our focus is on regulating KCOM’s fibre wholesale local access services, and we have deregulated the legacy wholesale broadband access market. We have also deregulated fixed voice telephone services, as in the future these services will be provided over broadband connections. Improving access to KCOM’s fibre network will mean more companies can provide such services in the Hull Area – our existing regulation is therefore no longer required. We have also deregulated the ISDN markets because intervention is no longer necessary in this declining market.

In addition, it’s noted that KCOM “currently does not have plans to withdraw its copper network“, although it does apparently expect to no longer be able to maintain PSTN (traditional phone) services after 2025 in line with BT (this references the move to an all-IP style voice network). Realistically, KCOM will at some point move to completely withdraw their copper too, particularly now that their entire network patch is reached by FTTP.

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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.
Leave a Comment
10 Responses
  1. Buggerlugz says:

    Heaven forbid OFCOM allow KCOM to spread forth across the UK as some kind of genuine competitor to BT or Virgin eh!

    1. New_Londoner says:

      This is about the Hull area where KCom enjoys significant market power, not about the rest of the UK.

    2. Buggerlugz says:

      Yes, and OFCOM wouldn’t want KCOM to leave Hull, would it?

    3. Alex says:

      I see no reason why KCOM couldn’t expand outside Hull. Its free to do commercial build outside Hull as far as I’m aware its just not interested.

    4. Mark Jackson says:

      As the article states, KCOM are already freely expanding outside the Hull area, with support from Ofcom to do so (they aren’t restricting the expansion). Today has no real impact on that, it’s to do with KCOM’s SMP market in Hull alone.

    5. George low says:

      With the cheapest tariff starting at £45, I don’t think you’d want them providing your service.

  2. Alex says:

    Would like to see some restrictions on KCOMs pricing (similar to how Openreach is restricted due to its monopoly). £40/50/60/70pm for 100/300/500/900mbps is high pricing considering the expensive part of their infrastructure (poles and ducts) will have been payed off decades ago.

    The lack of a cheap product is also not great, Vodafone offer a little under £20pm for 36mbps. Admittedly Vodafone’s support is not good but that is still half the cost of KCOMs cheapest package for a connection which is good enough for some people.

  3. MykXman says:

    Approx 2 months ago we changed Internet providers from KCOM to Purebroadband . Everything went fine until just after 4 weeks when our internet suddenly disappeared, this internet interruption lasted for 8 days , for 8 days we had complete zero internet .
    When we finally succeeded in getting a KCOM engineer around to the distribution box the engineer (KCOM) stated that our internet connection had been deliberately switched off . The engineer was adamant that it was a deliberate act to disconnect the internet . Just over a week later we had another interruption of internet , this turned out to be another deliberate disconnection by KCOM . Totally to the contrary of KCOM lies and deceptions we haven’t ever received a fibre optic connection. Our internet connection has only ever been a DSL connection .

  4. Patricia shepherdson says:

    Be careful what you wish for some are cheaper but the service is terrible.

  5. Paul says:

    You do know kcom built a network outside of hull.
    Google torch telecom.
    Try doing a bit of research before you write or comment with such poorly reseached drivel.
    Fyi. Kcom had a network in bristol, manchester, leeds, mk, Nottingham, reading, london, bradford, sheffield, lincoln.

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