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Ofcom Reports Good UK Progress on Openreach’s Split from BT UPDATE

Wednesday, December 8th, 2021 (11:27 am) - Score 5,544

Ofcom has today published their annual monitoring report, which finds that Openreach continues to “operate with a high degree of strategic and operational independence” from BT and there has been positive progress in take-up of their Physical Infrastructure Access (PIA) product by rival broadband ISPs. Only a few small issues remain.

The annual report was established a few years ago as part of Ofcom’s effort to monitor Openreach’s progress toward becoming a distinct “legally separate” company away from BT, which in turn stemmed from their original 2016 Strategic Review of Digital Communications (full summary).

The aforementioned review found that Openreach previously had an “incentive to make decisions in the interests of BT, rather than BT’s competitors, which can lead to competition problems” and that the BT had failed to “sufficiently” consult rival ISPs, such as those that piggyback off their network, on future “investment plans that affect them.” They were also deemed to have under-invested in their network.

In response BT and Ofcom eventually reached a voluntary agreement (here), which aimed to boost competition by giving rivals easier access to the operator’s infrastructure and fostering an independent governance structure for Openreach, as well as tougher minimum service quality standards, separate branding, new consumer protection measures and better information sharing etc.

Since then, BT has also committed to invest £15bn in order to ensure that 25 million UK premises (c. 80% UK coverage) can access their gigabit-capable Fibre-to-the-Premises (FTTP) broadband network by the end of December 2026 (6 million+ premises have already been completed), which includes around 6.2 million properties in rural and semi-rural areas. Overall, Ofcom seems to be happy.

Ofcom’s findings since the last monitoring report

Overall, Openreach has continued to operate with a high degree of strategic and operational independence from BT, as envisioned by the Commitments. Strong structures and processes exist within BT and Openreach which help to support compliance and address instances of non-compliance.

Openreach and BT must not lose sight of the Commitments – they are an important part of the ecosystem that supports competition in the telecoms market. Notably, there have been several changes in senior leadership, including the appointment of a new BT Chairman. Continued focus and vigilance will be required to ensure that progress made in recent years remains embedded and sustainable. We will monitor these developments closely.

During the year the COVID-19 pandemic has had a significant impact on Openreach’s operations and has also reduced the quality of service that it has been able to deliver. We recognise the constraints that Covid-19 has placed on the telecoms industry. In spite of these challenges, Openreach and others have continued to provide services and build new fibre networks across the UK.

Last year’s report did highlight some concerns with the take-up of Openreach’s Physical Infrastructure Access (PIA) product, which enables alternative network ISPs to run their over fibre through or over the operator’s existing cable ducts and telegraph poles. But most of those issues now seem to have been addressed, and PIA has become extremely popular for helping AltNets to expand FTTP coverage.

At present, over 130 providers have so far registered with Openreach to harness PIA, which is up from 90 last year and around three quarters of these providers were actively placing orders with Openreach. As of September 2021, a total of 99 providers placed PIA orders, and 56 of those were building or had built their network using PIA.

In terms of PIA usage, Openreach reports that PIA Notice of Intent orders to the end of June 2021 covered 41,000km of duct and over 300,000 poles, up from 14,000km duct and 68,000 poles a year earlier. The total Openreach network footprint is c.450,000km of duct and c.4 million poles. Openreach also reports that the average time to deliver Network Adjustments (e.g. repairing ducts) stands at 2.05 days, with 99% delivered within five days.

Mark Shurmer, Openreach’s MD of Regulatory Affairs, said:

“There’s no room for complacency, but we’re encouraged that Ofcom recognises we’re more open and more independent. We’re continuing to work closely with all of our customers, to promote choice and competition in the UK’s broadband market, by building a full fibre broadband network which will deliver better outcome for consumers and businesses.”

Moving on, stakeholders are still said to have highlighted a range of issues to Ofcom about Openreach, although the regulator only gives the most basic of overviews for these. “We expect to report on progress on these and other areas highlighted by stakeholders in our next report,” said Ofcom.

The Identified Issues

• The development of Openreach’s physical infrastructure access product and how it can evolve to meet the needs of network builders.

• How Openreach can best work with other telecoms companies to ensure positive outcomes for consumers, for example in the adoption of FTTP.

• The level of transparency in Openreach’s forward looking build plans.

• What further clarity Openreach can provide about how it will approach the shutting down of its copper network over time.

Finally, Ofcom said that their next report will be expanded to cover the regulatory changes introduced in March 2021 as part of their Wholesale Fixed Telecoms Market Review 2021-26 (FTMR), which covered Dark Fibre Access (DFA), copper retirement, regulation that varies by geographic area and many other improvements in order to help boost UK investment in “full fibre” broadband and high capacity Ethernet services.

In order to support our monitoring, we encourage our stakeholders to contact us where they are concerned that there are issues that might act as obstacles to the development of competition in gigabit-capable networks. Ofcom remains ready to use the tools at our disposal to support the policy set by the WFTMR, including through the use of Ofcom’s enforcement function where appropriate,” added Ofcom.

We suspect that many AltNets will probably take the above call with a pinch of salt, since Ofcom didn’t seem particularly interested (here) in acting against the concerns that were raised against Openreach’s “Equinox” offer (price discount on FTTP broadband). But overall, today’s report is fairly placid and heaps more praise than criticism upon Openreach and BT.

UPDATE 4:31pm

TalkTalk has sent us a comment on this.

A TalkTalk spokesperson said:

“We are pleased that Ofcom has listened to our feedback and expanded the OMU’s remit to include monitoring how customers’ needs are served, competition, separation, and the quality and delivery of Openreach’s Full Fibre rollout. Customers must be able to easily switch from copper to full fibre, and it’s vital they benefit from a competitive market.”

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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
8 Responses
  1. Ex Telecom Engineer says:

    It would appear CityFibre have started legal proceedings against OFCOM, in relation to Equinox.


  2. GNewton says:

    The so-called Openreach split from BT has been a farce.

    The network assets are still owned by BT plc, and Openreach Limited is still wholly owned by BT plc’s parent holding company, BT Group plc.

    1. FibreFred says:

      Ofcom are happy. Merry Xmas.

    2. Jason says:

      Congratulations on stating the obvious

  3. New_Londoner says:

    This will not appease the conspiracy theorists!

  4. Stephen Bamforth says:

    Would be interested in the status of the government backstop to the BT pension arrangement if a full split takes place.

  5. Rob Ross says:

    Not sure how Openreach choose their locations is it commercial or for the greater community good? North Finchley (LNNFN) is in Barnet London and is almost completely saturated with Virgin Media. However, if you travel two miles down the road to Barnet TE (LNBAR) which serves New Barnet/Cockfosters, that part of the Borough has an Ultra Broadband hole the size of a small town 70+ roads. It is still completely FTTC, has no Virgin Media and is not on Openreach or Alt network uplift plans out as to Jan 2027. As a telephone engineer worked in North Finchley on exchange construction and know the area. There is nothing special about this exchange except it one of the few exchanges with its front door on a Main Road, just down the road to a major shopping centre and backs onto a small retail park. I don’t know I could be wrong but it looks like it was chosen because it is a prime candidate to be completely closed for commercial reasons, as part of the copper closure program.

  6. Joe says:

    Not entirely sure the time to deliver network adjustments is correct – i think its reffering to accpeting a network adjustment. 2 days to clear a blockage isn’t happening.

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