{"id":18340,"date":"2019-04-13T00:01:59","date_gmt":"2019-04-12T23:01:59","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=18340"},"modified":"2024-02-23T15:19:37","modified_gmt":"2024-02-23T15:19:37","slug":"openreach-interview-the-challenges-of-sharing-cable-ducts-for-fibre","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2019\/04\/openreach-interview-the-challenges-of-sharing-cable-ducts-for-fibre.html","title":{"rendered":"Openreach Interview – The Challenges of Sharing Cable Ducts for Fibre"},"content":{"rendered":"

Spreading Gigabit speed “full fibre<\/em>” (FTTP<\/a>) broadband ISP networks across the UK is a slow and expensive process, although recent improvements to Openreach<\/a>’s infrastructure sharing product could help rivals to boost their own alternative roll-out plans. But some challenges remain.<\/p>\n

The idea of giving rival operators access to install their own fibre optic cables through Openreach<\/a>’s existing cable ducts and telegraph poles is not new and their related Physical Infrastructure Access<\/strong> (PIA) product has been around since 2011, although until recently its take-up was fairly low. A variety of issues, from awkward costs to tedious administrative processes and restrictions on use were often highlighted by rivals as a hinderance.<\/p>\n

Indeed the early PIA product was primarily only focused upon helping to connect residential properties and could not be used for providing rural backhaul or big business connectivity (e.g. leased lines). Admittedly this would have threatened BT<\/a>’s own products, but it could also play a pivotal role in helping rivals to make the economic case for building new connectivity to homes.<\/p>\n

In 2016 Ofcom<\/a> set about to revise this via an enhanced approach to Duct and Pole Access<\/strong><\/a> (DPA), which has this month been adopted by a now much more independent Openreach<\/a>. The update gives ISPs more information (better maps etc.), more efficient processes, new obligations for repairing\/clearing blocked ducts (at cost), better pricing and makes PIA available to ISPs building networks for both homes and businesses (mixed usage, with restrictions).<\/p>\n

In the words of Ofcom<\/a>, the updated DPA \/ PIA approach could “fundamentally change the business case for building new networks \u2026 It could cut the upfront costs of laying fibre cables by around 50% – from \u00a3500 per home, to \u00a3250. It could also reduce the time required for digging works, enabling fibre to be installed in some streets in a matter of hours, where it would have taken days<\/em>.”<\/p>\n

Concerns Remain<\/strong><\/span><\/h3>\n

The revised product has been broadly welcomed and a fair few operators are now making use of it to assist, where appropriate, in their deployments of Gigabit capable Fibre-to-the-Premises<\/strong> (FTTP<\/a>) networks. For example, Virgin Media<\/a> recently made their first commercial (non-trial) use of PIA in Wales (here<\/a>).<\/p>\n

However several ISPs have raised concerns about using it more widely, such as when supporting major city-scale roll-outs (here<\/a>). Cityfibre<\/a> told us that, in its current form, PIA remains a “fundamentally non-equivalent proposition and its full potential to accelerate competitive rollouts unrealised<\/em>.” Similarly Hyperoptic<\/a> said, “Openreach has no incentive to treat its competitors fairly \u2013 instead it is attempting to slow us down and make us pay to unblock and repair its Victorian infrastructure<\/em>.”<\/p>\n

Complaints also crop up around issues linked to Service Level Agreements<\/strong> (SLAs \/ Guarantees SLGs), as well as problems with accessing Openreach’s infrastructure on private land (Openreach may have an existing wayleave<\/strong> but rivals still need to get their own – paying multiple times to access the same infrastructure) and issues with the Network Adjustment<\/strong> process for repairing ducts (described as too “clunky<\/em>” or “inefficient<\/em>“).<\/p>\n

Meanwhile Ofcom<\/a> has already proposed to introduce “unrestricted access to the entirety of [Openreach’s] duct and pole network<\/em>” and possibly better SLAs in the future (here<\/a>). The change to unrestricted use, if adopted, means that PIA could also be harnessed by rivals for the deployment of leased lines, which can be harnessed to connect larger corporations or as capacity (backhaul) for mobile operators or broadband ISPs etc.<\/p>\n

At this point we note that Openreach, Ofcom and ISPs are still working to refine PIA as part of an on-going process (particular focus is on Network Adjustment, Key Performance Indicators [KPI] and SLA\/SLG improvements). As such we were keen to know what Openreach thought of all this and how they are adapting.<\/p>\n

\"katieThankfully the operator’s MD of Customer, Commercial and Propositions, Katie Milligan<\/strong>, has been kind enough to respond. Katie has been working in the telecoms industry since 2004 – having graduated from the University of Strathclyde – and she joined Openreach back in 2009. Today she is responsible for their entire \u00a35bn product portfolio and plays a big role in managing their relationships with more than 600 wholesale customers.<\/p>\n

The Interview<\/strong><\/span><\/h3>\n

1. Firstly, can you tell us a little about PIA and what changes have been made to this on 1st April 2019?<\/strong><\/p>\n

Katie’s Answer:<\/u><\/p>\n

We\u2019ve offered a Physical Infrastructure Access (or Duct and Pole) product since 2011, and basically it allows Communications Providers to pay us an annual rental charge in return for installing their own cables and equipment using our national network of underground ducts and telephone poles.<\/p>\n

We\u2019re committed to making this work for our customers and it\u2019s something we see as a priority. Openreach was created to enable retail competition, and we believe that providing a great PIA product will help Ofcom and the Government to encourage more competing networks at an infrastructure level.<\/p>\n

Over the last few years we\u2019ve been working closely with Ofcom, our customers and the wider industry to make access to our ducts and poles even easier. That process has brought us to our latest product update, which was formally launched on April 1st and introduces a big raft of improvements.<\/p>\n

Firstly, we\u2019ve recruited more than 100 people into our PIA team and given them the training they need to CPs who want to scale up their deployment.<\/p>\n

We\u2019ve backed that up with a bunch of streamlined processes and made further investments in our online mapping tool and ordering system. This is going to give CPs greater autonomy in recording and reserving the bits of the network they want to use.<\/p>\n

Under the new product, we\u2019re also now obliged to carry out improvements to our network, at our cost, in certain circumstances. Those improvements \u2013 known in the industry as Network Adjustments – include clearing out duct blockages or decluttering poles to relieve congestion and that should mean our customers can deploy their network infrastructure where they need to, and quicker than ever.<\/p>\n

Lastly, and by no means least, we\u2019ve also significantly reduced our rental charges and removed our order processing charges altogether.<\/p>\n

We\u2019re going to keep working closely with customers as they use the new capabilities, and we\u2019ll evolve the product in the future, based on their feedback.<\/p><\/blockquote>\n

2. Ofcom have previously predicted that the revised PIA product could \u201cfundamentally change the business case for building new networks \u2026 It could cut the upfront costs of laying fibre cables by around 50% \u2013 from \u00a3500 per home, to \u00a3250. It could also reduce the time required for digging works, enabling fibre to be installed in some streets in a matter of hours.\u201d<\/strong><\/p>\n

Do you agree with this assessment and if not, why?<\/strong><\/p>\n

Katie’s Answer:<\/u><\/p>\n

It certainly sounds logical that using an existing network would be quicker and cheaper than building from scratch, but we\u2019re not an alternative network building an investment case, so I can\u2019t really comment on the cost comparison. All I Know is that a month after Ofcom\u2019s statement back in May 2018, we effectively halved our rental charges for the service and removed all the order processing costs. These moves, combined with the new Network Adjustment regime, should enable CPs to deploy at much lower cost than they could before.<\/p><\/blockquote>\n

3. A fair few cable ducts (especially older ones) sometimes become blocked and need to be cleared, which can be a very tricky and expensive process. The revised PIA approach gives operators a choice between either, A) working to clear the ducts at their own cost or, B) ordering a Network Adjustment product that enables Openreach to undertake the work on their behalf, also at cost. <\/strong><\/p>\n

Some operators have complained that the Network Adjustment process is too \u201cclunky and inefficient<\/em>.\u201d Can Openreach offer any rough indication of how many ducts are likely to be blocked in your UK network and what are your views on the revised approach, as well as the criticism of its efficiency? Also do you worry that rivals could damage your network if they do it themselves?<\/strong><\/p>\n

Katie’s Answer:<\/u><\/p>\n

We own and maintain nearly half a million kilometres of spine duct in the UK – some of which was laid all the way back in the Victorian and Edwardian eras \u2013 so it\u2019s no surprise to us when our engineers occasionally come across blocked or damaged duct.<\/p>\n

Given the scale and variety of conditions and geographies, it\u2019s difficult to be specific on volumes but I\u2019d say that in some areas you might expect to encounter a couple of blockages per kilometre.<\/p>\n

We only launched the new capability a few days ago, so I think it\u2019s probably a bit early to make a sweeping judgement on how well it\u2019s working.<\/p>\n

We\u2019ve worked hard to get this right and for several months prior to launch, and we\u2019ve not just done this in a room on our own. We worked closely with customers on a proof of concept to iron out wrinkles and, for example, we now believe more than 95 per cent of our pole requests can be processed from one of our three PIA operation centres (in Belfast, Cardiff or Walsall), rather than having to take the time to find an individual field planner to assess the work.<\/p>\n

With Network Adjustments underground it becomes trickier, as we can only assess whether a request to unblock a duct is valid with a site visit and a lot of the time we go out there and discover there\u2019s not really a blockage at all, which is wasted effort. We have a huge amount of experience building networks over many years and, with that experience, we often find we don\u2019t need to dig when we investigate. Already in week one we\u2019ve found that we can get through situations that others consider need Network Adjustments.<\/p>\n

The bottom line is, we\u2019ve invested big sums to develop a robust system that will significantly reduce the time it takes for customers to plan and place orders, but we\u2019re not stopping there. We do aim to make further improvements on PIA throughout the year and we\u2019re keen for our customers to work closely with us as we keep progressing.<\/p><\/blockquote>\n

4. Some operators that have made large PIA\/DPA orders, such as to support a roll-out of Fibre-to-the-Home (FTTH<\/a>) style ultrafast broadband ISP networks in urban areas, have previously raised concerns that Openreach could use this information to help them target areas for their own rival FTTP<\/a> deployments (i.e. in an anti-competitive way).<\/strong><\/p>\n

Do you understand such concerns and what, if anything, can reasonably be done to mitigate those fears?<\/strong><\/p>\n

Katie’s Answer:<\/u><\/p>\n

I do understand those concerns, but I also know that we take customer confidentiality extremely seriously and we\u2019ve got strict governance and controls in place, so I\u2019m convinced it\u2019s not an issue.<\/p>\n

For a start, we have stringent Chinese Walls internally, so no ordering or forecast information for PIA can be used in any way, other than to make sure we meet our contractual obligations to our customers and provide a quality PIA service.<\/p>\n

We also have dedicated teams working on PIA who are all subject to compliance training and rules about what information they can share, with who. These guys are then subject to extra oversite by our Business Integrity team and our Internal Audit and Commitments Monitoring team. On top of that, we\u2019re a heavily regulated business, so ultimately Ofcom\u2019s dedicated Openreach Monitoring Unit (OMU) is there to provide an extra level of assurance.<\/p>\n

Finally, it\u2019s worth saying that we now announce all of our own plans for FTTP build 12 months in advance. So the entire industry can see where we\u2019re planning to build and make their own plans accordingly. Our plans are governed, conceived and operated in a completely separate part of Openreach that\u2019s also regularly audited and monitored by our compliance and audit teams.<\/p><\/blockquote>\n

5. Various providers have also noted that PIA runs into a problem with wayleaves (legal access agreements) in some parts of the country, such as across much of Scotland. In this situation a lot of Openreach\u2019s PIA assets (poles etc.) are located on private land and as such rival ISPs would require a wayleave to access the infrastructure.<\/strong><\/p>\n

Naturally this creates a difficult situation, not least with having to pay multiple wayleaves for access to the same infrastructure. What are your views on this and how do you think it could be resolved?<\/strong><\/p>\n

Katie’s Answer:<\/u><\/p>\n

Wayleaves don\u2019t form any part of the PIA product. They\u2019re separate bilateral contracts between operators and land owners.<\/p>\n

We believe it\u2019s important for any company deploying networks to consider and invest resources in obtaining the necessary consents and permissions to carry out their work, and that\u2019s something Openreach has done over a long period of time and continue to do.<\/p>\n

It\u2019s also important to remember that during industry discussions, it has generally been agreed that CPs themselves need to identify and obtain the consents, permissions and any wayleaves they might need for their own network deployment.<\/p>\n

We have given information to CPs to help them identify whether we have any permissions under the new 2017 code, although it remains a matter for CPs to ensure they have the right consents for their work or equipment. We\u2019re also in ongoing discussions with Ofcom and the Office of the Telecoms Adjudicator (OTA) about how we could make available a list of relevant post codes or grid references where we have one of the newer wayleaves in place so that it\u2019s more easily available to CPs using PIA.<\/p><\/blockquote>\n

The interview continues on page 2..<\/p>\n

<\/p>\n

6. Some rival operators have raised general concerns about the equivalence of PIA\/DPA. The argument follows that Openreach may apply different expectations or obstacles to rivals than they themselves follow. The wayleave issue mentioned above is arguably one such difference, albeit tricky to solve without Ofcom\/Government intervention.<\/strong><\/p>\n

Other equivalence issues may potentially be perceived to stem from Openreach\u2019s use of its own network in terms of the apparatus it deploys, as well as its own engineering principles \/ solutions. Some operators are further concerned that Openreach may be encouraged to deploy inefficient space-consuming equipment, such as on top of poles, which may hinder the potential for use by a rival.<\/strong><\/p>\n

As Cityfibre<\/a> said recently, \u201cUntil Openreach is obliged to reserve access for its own fibre roll-outs through the same product and is made to jump through the same hoops as challengers, DPA will remain a fundamentally non-equivalent proposition and its full potential to accelerate competitive rollouts unrealised<\/em>.\u201d<\/strong><\/p>\n

What are your thoughts on these concerns and are they issues that could ever be reasonably addressed by future changes (if so, how)?<\/strong><\/p>\n

Katie’s Answer:<\/u><\/p>\n

We\u2019re a highly regulated business and we\u2019re committed to meeting all of the legal obligations that Ofcom sets out for us. But it goes beyond that. We\u2019re also committed to making duct and pole access fit for purpose, and we\u2019re continuing to work on a significant set of enhancements over the coming year which will add further automation and flexibility to the product for scale operators.<\/p>\n

I have to say it would make no commercial sense for us to deploy inefficient processes or equipment, when the reality is that this stuff is already sufficiently complex and costly to build in the first place.<\/p>\n

What we really need is for operators to collaborate and work in partnership with us on enhancements, and we need to be working together as an industry, with the Government and Ofcom, to create a more effective regime overall. There are lots of issues we agree on – for example the need for network builders to be given the same kind of access as utilities get when it comes to repairs \u2013 and we can achieve some really positive changes if we work together.<\/p><\/blockquote>\n

7. Openreach has introduced some limited Service Level Agreements (SLAs) and Guarantees (SLGs) to PIA, although among the larger alternative network providers there\u2019s a feeling that these still need to be improved, such as to make the product more predictable and give them the confidence to adopt it at scale. Do you think further changes can be made to cater for this and if so, what is planned?<\/strong><\/p>\n

Katie’s Answer:<\/u><\/p>\n

We\u2019ve introduced a full suite of SLAs and SLGs and we\u2019ll be regularly reporting on our performance. We\u2019ve also agreed to a 12 month \u2018bedding in\u2019 period during which no SLGs will be in force and we will engage in an industry review led by the OTA.<\/p>\n

We\u2019ve also shared top level plans with Industry on the items we\u2019ll be working through over the next 12 months.<\/p><\/blockquote>\n

8. Do Openreach foresee any other problem areas cropping up with the most recent revision of PIA?<\/strong><\/p>\n

Katie’s Answer:<\/u><\/p>\n

There\u2019s always going to be some bumps in the road with any new process or way of doing things. But if there are issues, then I believe we\u2019ve put the resources in place to avoid them impacting customers.<\/p>\n

We do have some concerns over a lack of forecasting. If we were to face a sudden influx of un-forecasted demand then it could give us some challenges with things like field validation of Network Adjustments. However we\u2019ve done our own planning on what that demand\u2019s likely to be, and we\u2019ve worked with our operational teams to prepare for moving resources around should we need to react to sudden spikes.<\/p><\/blockquote>\n

9. The revised PIA product adopts a \u201cmixed usage<\/em>\u201d approach, which Ofcom believes will enable greater flexibility in the use of Openreach\u2019s cable ducts and poles by rivals (i.e. creating stronger business cases for more investment). As a result ISPs should be able deploy local access networks offering both broadband and non-broadband services, albeit provided the primary purpose of the network is the delivery of broadband.<\/strong><\/p>\n

However Ofcom\u2019s latest business connectivity review has proposed to change this again by adopting \u201cunrestricted usage<\/em>\u201d of ducts and poles. Currently PIA primarily only focuses upon the residential and small business market, while unrestricted usage suggests that companies offering high-speed lines for large businesses\/mobile\/broadband operators may also be able to make use of it.<\/strong><\/p>\n

On the one hand this could further help rivals to build competing networks with more attractive business models by using your existing infrastructure. On the other hand it also appears to be directly competitive with some of Openreach\u2019s own products. What are your concerns around unrestricted usage and do you intend to oppose it?<\/strong><\/p>\n

Katie’s Answer:<\/u><\/p>\n

We understand the importance of access to our ducts and poles as a means of encouraging other operators to build competitive fibre networks throughout the UK. We don\u2019t believe Ofcom has properly made the case for extending DPA beyond \u2018mixed usage\u2019 however, we\u2019re not opposed to the further extension of the scope of DPA provided we receive greater certainty in some key areas of the forthcoming regulation.<\/p>\n

We have provided a full response to Ofcom on their recent Passive Infrastructure Access consultation on Unrestricted Duct & Pole Access a few months ago. Our full PIMR response can be read here: https:\/\/www.ofcom.org.uk\/__data\/assets\/pdf_file\/0027\/139455\/openreach.pdf<\/a><\/p><\/blockquote>\n

10. Finally, do the changes to PIA\/DPA broadly help or hinder Openreach\u2019s own \u201cFibre First<\/em>\u201d strategy, which is currently working to make FTTP broadband available to 3 million premises by the end of 2020 (March 2021 financial) and possibly 10 million by around 2025?<\/strong><\/p>\n

Katie’s Answer:<\/u><\/p>\n

To be honest it\u2019s not really a question of helping or hindering us.<\/p>\n

We\u2019ve been really clear that if the UK is going to achieve the Government\u2019s 2033 ambition, we need to be a dependable partner for alternative networks \u2013 which means having an effective PIA product. At the same time, we need to be out there building our own network at scale and pace.<\/p>\n

It\u2019s both in parallel and we\u2019re very clear on that.<\/p>\n

Obviously, we are building faster, further and – we believe – to a higher quality than anyone else, and we\u2019ve passed more than 1.2 million homes and businesses so far. But we\u2019re also helping others to build by taking advantage of our ducts and poles. That is really important to us.<\/p>\n

We\u2019re only going to meet the Government\u2019s ambition by working together.<\/p><\/blockquote>\n

11. Anything else you want to add before we finish, Katie?<\/strong><\/p>\n

Katie’s Answer:<\/u><\/p>\n

We\u2019ve spent a year in the nitty gritty of product, process and systems development, as well as the contract negotiations which can be contentious – but we all now need to get on with it and get some real experience of customers using the product before anyone comments further on its effectiveness.<\/p>\n

We\u2019re determined to deliver a highly useable, highly scalable product and to meet all of our regulatory obligations so it\u2019s now about getting on and using it, then improving it from there.<\/p>\n

I\u2019m looking forward to seeing an increase in activity over the next few months, as more network providers start to build at scale, and I actually want to thank our customers for all their feedback in the discussions so far.<\/p>\n

We\u2019ll be continuing to work with them, Ofcom and the OTA as we develop and refine the product over the coming months.<\/p><\/blockquote>\n

ISPreview would just like to thank Katie Milligan for kindly taking the time to respond to our questions.<\/p>\n","protected":false},"excerpt":{"rendered":"

Spreading Gigabit speed “full fibre” (FTTP) broadband ISP networks across the UK is a slow and expensive process, although recent improvements to Openreach’s infrastructure sharing product could help rivals to boost their own alternative roll-out plans. 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