{"id":12686,"date":"2016-10-13T11:55:42","date_gmt":"2016-10-13T10:55:42","guid":{"rendered":"http:\/\/www.ispreview.co.uk\/?p=12686"},"modified":"2016-10-14T08:41:40","modified_gmt":"2016-10-14T07:41:40","slug":"bt-study-challenges-ofcoms-strategy-grow-rival-broadband-networks","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2016\/10\/bt-study-challenges-ofcoms-strategy-grow-rival-broadband-networks.html","title":{"rendered":"UPD Study Challenges Ofcom’s Strategy to Grow New Broadband Networks"},"content":{"rendered":"

A new BT<\/a> commissioned report from Analysys Mason has perhaps unsurprisingly warned that Ofcom<\/a>’s effort to encourage alternative network (AltNet) ISPs to build rival ultrafast broadband networks, such as by opening up access to Openreach<\/a>’s cable ducts, may fail to achieve the desired result.<\/p>\n

<\/p>\n

Ofcom<\/a>’s on-going Strategic Review<\/strong> proposed a number of major changes to BT<\/a>’s network access division, Openreach<\/a>. One of the most important of those was a new wholesale Duct and Pole Access<\/a><\/strong> (DPA) solution, which is a much more flexible, streamlined and useful enhancement to the existing and not entirely popular Physical Infrastructure Access<\/strong> (PIA) product.<\/p>\n

Essentially this allows rival ISPs to access and use the incumbent\u2019s national network of underground cable ducts and overhead telegraph poles, which could help them to deploy new fibre optic cables into areas that might have otherwise required significant and expensive street works.<\/p>\n

Ofcom<\/a>’s very aspirational view is that a “good<\/em>” long-term outcome of this approach would be to achieve full competition between three or more network providers for around 40% of premises across the United Kingdom, “with competition from two providers in many areas beyond that<\/em>.” Some of this is already being achieved via Openreach<\/a> (BT<\/a>) and Virgin Media<\/a>, predominantly in the low hanging fruit of dense urban and suburban areas.<\/p>\n

On the other hand we know that smaller operators, such as Hyperoptic<\/a>, Gigaclear<\/a>, B4RN<\/a>, IFNL and many others are making a lot of progress. However the new report suggests that it might only be financially viable for new entrant(s) to deploy to 2 million UK premises (around 7% of the country) and this is an optimistic forecast, with the “more realistic<\/em>” model suggesting only 4%.<\/p>\n

Apparently this forecast could be improved to 10% of the UK if a major ISP, such as one with an established customer base like Sky Broadband<\/a> or TalkTalk<\/a>, were to enter the fray. But 10% is still a long way off what Ofcom might hope to see. Meanwhile Sky appears to have given up on the idea of building its own fibre optic network and TalkTalk<\/a> would need to find a lot of money.<\/p>\n

Matt Yardley, Partner at Analysys Mason, said:<\/strong><\/p>\n

“It is highly unlikely that a third operator will be able to reach 40% [FTTP<\/a>] coverage on a commercially viable basis.<\/p>\n

The UK has a highly competitive broadband market, but our economic modelling suggests that encouraging a third separate network to invest in covering more than 5-10 percent of the country will be extremely difficult to achieve.”<\/p><\/blockquote>\n

No doubt the Independent Networks Co-operative Association<\/a> might also disagree with the findings because they’ve recently forecast, albeit very optimistically, that AltNets could cover 4.9 million premises (18% of the UK population) with FTTP<\/a> by 2020 (here<\/a>).<\/p>\n

A Spokesperson for Ofcom told the FT<\/a>:<\/strong><\/p>\n

“We know from discussions with major operators that there is significant interest in laying fibre using BT\u2019s network. Progress is happening each week, and smaller operators are building fibre networks in cities across the UK. The future is fibre, and we expect BT to play its part in making that happen.”<\/p><\/blockquote>\n

Another potential challenge stems from Ofcom’s belief that “sufficient duct space could be available in the UK to support this model of competition.<\/em>” A related 2010 survey found that 63% of the 90mm duct ends surveyed and 97% of the 50mm duct ends surveyed (between the street cabinet and the premise) had at least 42% of unoccupied space, which is very good.<\/p>\n

However BT has previously warned that this won’t “all translate into useable duct space<\/em>” and indeed we\u2019ve seen plenty of issues with blocked or poor quality ducts crop up as part of existing roll-outs, which in some cases have stalled local upgrades due to the high cost of repair or issues with access. Both Vodafone<\/a> (here<\/a>) and Cityfibre<\/a> (here<\/a>) have also encountered similar issues.<\/p>\n

In the end the DPA solution is a very welcome improvement, but at issue is whether or not this will be enough to create positive change on the sort of scale that Ofcom wants to see. Sadly the full report hasn’t been published and so we can only go off the FT’s rather vague summary, although BT informs that they will try to get it online today.<\/p>\n

UPDATE 14th October 2016<\/strong><\/p>\n

Added a comment from Matt Yardley<\/strong>, Partner at Analysys Mason, above. The full report can now be downloaded (here<\/a>).<\/p>\n","protected":false},"excerpt":{"rendered":"

A new BT commissioned report from Analysys Mason has perhaps unsurprisingly warned that Ofcom’s effort to encourage alternative network (AltNet) ISPs to build rival ultrafast broadband networks, such as by opening up access to Openreach’s cable ducts, may fail to achieve the desired result.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[474,472,52,65,56,36,69],"class_list":["post-12686","post","type-post","status-publish","format-standard","hentry","category-uk_isp_news","tag-bt","tag-business","tag-fibre-optic","tag-ftth","tag-fttp","tag-ofcom-regulation","tag-bt-openreach"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nUPD Study Challenges Ofcom's Strategy to Grow New Broadband Networks - ISPreview UK<\/title>\n<meta name=\"description\" content=\"A new BT commissioned report from Analysys Mason has perhaps unsurprisingly warned that Ofcom's effort to encourage alternative network (AltNet) ISPs to\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2016\/10\/bt-study-challenges-ofcoms-strategy-grow-rival-broadband-networks.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UPD Study Challenges Ofcom's Strategy to Grow New Broadband Networks - 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