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Connexin Blasts KCOM’s Broadband Infrastructure Sharing Plan for Hull UK UPDATE

Tuesday, Mar 19th, 2024 (10:16 am) - Score 2,920
Connexin-Engineer-Working-Next-to-Van

Broadband ISP Connexin has today responded angrily to KCOM’s move last week to send them a feasibility study on infrastructure sharing (PIA / cable duct and pole access) in the Hull area of East Yorkshire (here), which it was hoped might have reduced the level of new pole deployments for full fibre networks. But instead they’ve been left “disappointed“.

The alternative network operator is currently busy rolling out a new Fibre-to-the-Premises (FTTP) broadband network across Northern England, albeit starting in Hull and East Yorkshire. The deployment forms part of their wider ambition to cover 500,000 premises with their own fibre broadband infrastructure (no timescale has been given for when this will be achieved), much of which will be built using poles.

NOTE: Connexin is backed by an investment of £80m from PATRIZIA and currently has 25,000 customers (May 2023).

However, KCOM is the dominant provider in Hull and holds Significant Market Power (SMP), which is something that new entrants like Connexin and MS3 have been seeking to change. The fastest and most efficient way of doing this is often by running new fibre via the incumbents existing cable ducts and poles. But while that works well with Openreach’s regulated Physical Infrastructure Access (PIA) product, it’s a different story with KCOM.

The law does require KCOM to fairly share access to their existing infrastructure in Hull (ATI Regulations). But rival operators expecting the same level of access, flexibility and affordability as the regulated PIA solution from Openreach have often run into problems with KCOM’s sadly confidential commercial terms, which are alleged to place an unfeasibly high price on access.

As a result, Connexin and others end up having to build lots of new infrastructure, such as poles, which tends to irritate some local communities – especially those that have previously only had underground cables. In recent months, this also has become much more of a political issue (here and here). The government has even called on operators to “limit installation of telegraph poles” (here), while Ofcom has warned that it lacks the power to do that (here).

Signs of Hope, Dashed

Last week there was a small glimmer of hope and optimism after KCOM, which has come under increasing pressure to be faster and more constructive in their response, claimed to have “delivered a plan” to Connexin that they say “could enable other broadband providers to share its passive infrastructure without the need for more telegraph poles.”

The “plan” seemed to reflect the results of a recent “feasibility study“, which describes how “other broadband providers could deliver their services using KCOM’s infrastructure“. But regular readers of ISPreview will know that it took years of effort and changes by Ofcom before Openreach’s PIA became as effective as it is today, and KCOM are only really at the very start of that same process.

Suffice to say that our article on last week’s development noted that KCOM still seemed to be a way off having a truly Openreach PIA-like product, and there were doubts about what can be achieved without more direct regulatory intervention. The big development today is that Connexin have finally published their response to KCOM’s proposal and, needless to say, it’s scathing.

However, if you can’t be bothered to read the whole thing (it’s worth it), then Furqan Alamgir (Connexin’s CEO) sums it up like this: “KCOM’s feasibility report is merely a 10-page document full of blank spaces and bullet points containing “high level estimates” no firm pricing, no committed timing, and no conclusion as to whether they deem infrastructure sharing feasible or not. This from a company that says it is committed to infrastructure sharing!

Connexin Open Letter following KCOM’s PIA feasibility study

Why is Hull the only city in the UK that doesn’t have competitive broadband choice like the rest of the UK? Let me tell you why:

I felt it necessary to openly share this with the residents of Hull and the East Riding of Yorkshire to address the misleading narrative created by KCOM in line with their comments in relation to the “feasibility study” shared with Connexin.

Whilst I would love to share the contents of KCOM’s letter and “feasibility study” publicly we are unable to as KCOM have marked this as “Commercially Confidential”.

Publicly KCOM’s CEO has stated that KCOM do share infrastructure (https://www.youtube.com/watch?v=Kew_f8qJ0AA). Well, if this is the case, then one has to question why KCOM has felt the need to undertake a “feasibility study” at this stage? If they already share infrastructure, then surely this should not now be necessary?

The development of a “feasibility study” on infrastructure sharing, at this stage, backs what we have always said about KCOM putting obstacles in the way of what should be a simple process. KCOM says one thing publicly, but then does another.

KCOM also says that operators such as Connexin have not applied for Infrastructure access until Jan 2024. This is completely untrue. Connexin have tried working collaboratively with KCOM for many years. We are one of their largest wholesale customers, re-selling their products to consumers across the Hull telecoms area, covering Hull and part of the East Riding of Yorkshire. We have invested a significant amount of money to integrate networks but have for years faced what we can only call incumbent anti-competitive behaviour.

KCOM’s behaviour, first on wholesale access, and later on infrastructure sharing, led us to make the decision to build our own network to service our growing demand in the Hull and East Riding of Yorkshire region.

We have applied more than 15 times in the past three years for access to KCOM’s infrastructure. We initially applied under the Access to Infrastructure (ATI) Regulations designed to make infrastructure sharing simpler between operators and our experience is not unique. We are aware that other operators have tried too and experienced the same obstacles and challenges.

This behaviour from KCOM is nothing new. It is similar to the behaviour of Openreach nationally before Ofcom stepped in to regulate them to ensure they shared infrastructure on clear, fair and reasonable terms through effective regulation.

We have been in regular dialogue with Ofcom and following several meetings with them we revised our application to access KCOM infrastructure from the ATI Regulations to the Significant Market Power (SMP) regulations in October 2023.

KCOM only began the process of engaging a couple of months after our application, following a meeting Chaired by the Rt Hon David Davis MP, in Westminster, where Hull and East Riding MP’s were present, alongside the CEO’s of KCOM, Connexin and MS3. This political pressure led to KCOM accepting a meeting with Connexin which was held at their Carr Lane offices on 22 January 2024.

On 14th March 2024 at 14:03 we were sent a copy of KCOM’s “feasibility study”. Even in advance of receiving this we were approached for comment by journalists which suggests that KCOM briefed the media prior to sharing with Connexin. This again shows their approach and highlights their behaviour

In their press statement they state:

“Today, we’ve passed that (feasibility study) to Connexin, on a confidential basis, and asked for its views.”

It’s ironic that they would brief the press but then insist the details of the report are confidential. We would be happy for the contents of their report to be made available to the public. We feel this is in the best interest of the public, but does KCOM?

In spite of claiming to have worked “flat out” from a “standing start”, KCOM’s feasibility report is merely a 10-page document full of blank spaces and bullet points containing “high level estimates” no firm pricing, no committed timing, and no conclusion as to whether they deem infrastructure sharing feasible or not. This from a company that says it is committed to infrastructure sharing!

In the study, KCOM also argue that they feel sharing their infrastructure may not improve the situation with regards to new poles needing to be installed across Hull and the East Riding. This is completely disingenuous and demonstrates their stance in reality, given that we cannot think why it would be better for new operators to be required to unnecessarily erect duplicate poles or dig up streets, where access to ducts or existing KCOM poles are offered on reasonable terms.

The facts speak for themselves:

• Only the area of the UK where KCOM has significant market power is this really an issue. Everywhere else there is a choice for other networks between accessing Openreach infrastructure, or build their own. In the KCOM area, there is still no access to the incumbent’s ducts or poles, so there is no choice.

• Connexin are not the only provider struggling with KCOM. Other providers have also struggled to gain access to KCOM infrastructure.

• In parts of the East Riding, where Openreach ducts exist, Connexin has its network in shared Openreach ducts and on shared Openreach poles. If building new poles was preferred and was cheaper than sharing infrastructure, why would we be using shared poles elsewhere?

• KCOM haven’t demonstrated that they have shared a single metre of duct or a single pole with any operator let alone Connexin.

Quite frankly we are fed up with KCOM’s false narratives and anticompetitive behaviour. It’s clear that the only way KCOM will share infrastructure as they are required to do, legally, is through Ofcom stepping in and regulating them in the same was as they do Openreach.

Unfortunately this doesn’t do much to help the communities of Hull and East Riding who are affected by KCOM’s lack of action as this process can take months, or even years.

Why won’t KCOM do the right thing and share their infrastructure fairly? Why does it take them 3 months to do a “feasibility study”? With other providers we have agreed terms and moved to access ducts within the same timeframe!

In order to really test the SMP Regulations we have only one choice left and that is to file a complaint with Ofcom. Filing a complaint with Ofcom is not a simple process and requires significant investment to test weak regulation. That said, we are making progress. We had the latest in a series of meetings with Ofcom last week to review KCOM’s reluctance to act on this issue. Ofcom have a choice now, between facilitating next steps on the road to infrastructure sharing with KCOM and enforcement. Unfortunately enforcement only takes up more time and money.

We appeal to KCOM to act in the best interests of the people of Hull and the East Riding and to provide an infrastructure sharing process promptly, fairly and reasonably, as required by the current regulations so that we can work together to massively reduce the number of poles required to roll out our newer faster broadband networks.

Last week the Government called for further action on infrastructure sharing from the major telecoms infrastructure owners, including KCOM.

As you can see from the statement provided to the BBC below, we welcome Telecoms Minister, Julia Lopez’s call for action. We are concerned that it is still not strong enough, direct enough and timely enough to change the situation quickly for residents of Hull and the East Riding who are still affected by KCOM’s understandable desire to protect its continuing monopoly position over much of the ducts and poles in our region.

Statement provided to the BBC:

We welcome Julia Lopez’s call for action to help limit the installation of parallel infrastructure. Where Openreach has existing ducts and poles across most of the UK, there is a choice for operators to build in parallel, or to use the existing ducts and poles. We prioritise the use of existing infrastructure in our deployments where it’s available. In parts of the East Riding of Yorkshire where such infrastructure is openly shared, thanks to the regulations on Openreach for infrastructure sharing, around 90% of our network is built using existing infrastructure.

Unfortunately, in the Hull telecoms area, KCOM is not yet fully regulated to share its ducts and poles. In spite of them claiming to be open to sharing, it has now taken us three years and more than 15 attempts at application, using two different regulated processes, to get as far as a feasibility study. And we are not alone. There are other companies in the same position in Hull. Completion of a feasibility study is a first step, but the procrastination and delays up until now show this is clearly a company working hard to protect its monopoly.

We have only got this far thanks to pressure put on KCOM by MPs, councillors, the regulator Ofcom and local residents who have pushed them to do what they say they are doing. In reality, only stronger government and regulatory intervention will ensure the residents of Hull and East Riding get what they deserve, which is a genuine, transparent and fair sharing regime for the ducts and poles that already exist beneath our streets.

We would be delighted to rent reasonable access to KCOM’s ducts and poles, at a fair price, to create a situation where the telecoms infrastructure already in place is used more fairly for all.”

I hope this gives you some more insight into a complex situation which is proving very difficult to resolve. The ball is firmly in KCOM’s court, they can choose to make this simple, or drag their heels and blame operators who have demonstrated that they can share infrastructure everywhere else in the country apart from the Hull telecoms area, where KCOM own the network and are doing all they can to protect their monopoly over the vast majority of the ducts beneath our streets!

Sincerely,

Furqan Alamgir
Chief Executive Officer

The reality here is that it’s likely to take a more direct intervention by Ofcom to dig through the vested interests of both sides and find a solution. But that isn’t likely to happen until the regulator begins its next major market review, which should start with an evidence gathering stage this year.

However, it’s not yet clear whether the regulator will end up pushing for a PIA-like product and, even if they do (given the political pressure, we wouldn’t bet against it), it could still be spring 2026 before it’s formally introduced. But by that point many of the rival builds in Hull may already be nearing completion, or at least some level of good coverage.

The problem is, in the regulatory sense, there’s no quick solution to a complex problem like this and anything rushed could risk facing delays through legal challenges etc. As we say, it took years for Openreach’s PIA to become the product it is today, which is still imperfect but also attractive enough to have been widely adopted.

UPDATE 20th March 2024 @ 11:36am

We’ve had a response from KCOM, which has also promised to send over a point-by-point answer to Connexin’s claims (this will follow later today). I’m going to keep this all in one story to help avoid excessive repetition.

A KCOM spokesperson told ISPreview:

“For over a hundred years KCOM have been putting our technology and infrastructure to work for the benefit of the people of Hull and East Yorkshire. Most recently, that has included enabling other companies to use KCOM fibre infrastructure to supply broadband services. We want to work constructively with all wholesale partners who are committed to meeting the needs of local households and businesses.

We have been surprised and disappointed to read the negative response to the feasibility study from one supplier. We hope that such feasibility study is given the consideration it merits. We are committed to engaging constructively with our suppliers to create a standard offer that delivers access to KCOM’s passive infrastructure, and ensures as little disruption to local communities as possible.

KCOM has and always will continue to comply its regulatory and statutory duties.”

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Mark-Jackson
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 X (Twitter), Mastodon, Facebook and .
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Comments
13 Responses
  1. Avatar photo Big Dave says:

    If Ofcom have the necessary powers they need to pull their finger out and sort this out. If they do not then the government need to bring forward suitable legislation as a matter of urgency. Looking at KCOM’s ownership and previous actions of their owners (the company that left Thames Water £2 billion in debt) their actions should not come as a surprise.

    1. Avatar photo Fringe says:

      They also own Voneus

  2. Avatar photo Anonymouse says:

    KRapCOM

    1. Avatar photo HullLad says:

      How long did it take you to come up with that belter 😀

  3. Avatar photo James says:

    Ouch.

    Let’s see what KCOM’s response to that is.

    Popcorn at the ready!

  4. Avatar photo Darren Newton says:

    If all this is true then why have connexin and ms3 not either shared the same new poles or,better still,waited for resolution with KCOM before blighting neighbourhoods with their relentless installation of these poles.

    1. Avatar photo - says:

      They do not overlap that much, and in any case they are competitors and are not the incumbent monopoly who have a legal obligation to provide ATI.

  5. Avatar photo Steve says:

    It’s really sad to see this spat play out in public. I remember in the early 90s I visited someone in Hull who showed me a BBS and I recall they had a phone line just for the connection, I asked if it was expensive and they said it was a free call to them. This was just before the huge expansion of the cable network and it felt revolutionary. Fast forward 30 years or so and KCom’s owners Macquarie appears to be limping along like a dinosaur in its death throes rather than co existing gracefully. It would be great PR all round if they come to an agreement, done in the right way showing customer care and a clever revamp of their packages this could actually work in KCom’s favour.

  6. Avatar photo David says:

    They have taken ownership of a cash cow and don’t want to share anything with anyone, let alone a rival company. Kcom certainly isn’t a hundred years old as it is the name of the company that took over after the first privatisation of the Hull Council telephones department! KCOM appear to be hanging it out as long as possible to rake in the maximum return on their investment. Broadband in Hull isn’t cheap anymore!

    1. Avatar photo XGS says:

      ‘KCOM appear to be hanging it out as long as possible to rake in the maximum return on their investment.’

      Bingo. The longer they drag this out for the more time they have to increase market share of their own FTTP and the more the competition have to drain their own resources building from scratch.

  7. Avatar photo Board of the bs says:

    It’s interesting that I now have 3 sets of isp’s equipment in my street is this a display that its not only kcom that seems unable to share!

    You all need to grow up and learn not to waste our natural resources for your own personal gain!!!!

    It’s not like we have 3 sets of water gas and electricity infrastructure what would it be like if we did. Dumb and idiotic

  8. Avatar photo Jonathan says:

    Where is the point by point response from KCOM?

    1. Mark-Jackson Mark Jackson says:

      Sadly, they never provided it.

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