{"id":22790,"date":"2020-07-16T11:26:02","date_gmt":"2020-07-16T10:26:02","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=22790"},"modified":"2020-07-16T11:37:22","modified_gmt":"2020-07-16T10:37:22","slug":"ofcom-propose-tweaks-and-dark-fibre-for-kcom-in-hull-uk","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2020\/07\/ofcom-propose-tweaks-and-dark-fibre-for-kcom-in-hull-uk.html","title":{"rendered":"Ofcom Propose Tweaks and Dark Fibre for KCOM in Hull UK"},"content":{"rendered":"

After a bit of a COVID-19 delay. Ofcom<\/a> has today opened a review of regulation on KCOM<\/a>’s network in the Hull (East Yorkshire) area, which last year completed the roll-out of a new gigabit Fibre-to-the-Premises (FTTP<\/a>) broadband service across their entire network and is now expanding beyond that footprint.<\/p>\n

In the past it was fairly easy to understand KCOM<\/a>’s market in East Yorkshire<\/strong> (i.e. the Hull area), where they have historically held a position of Significant Market Power<\/strong> (SMP). Despite this Ofcom<\/a> has often appeared to be quite soft on the operator’s incumbent position, perhaps partly because they’re a significant local employer (as well as financial contributor) and have invested \u00a385m to make “full fibre<\/em>” available across their network of 200,000 premises<\/strong> (i.e. the regulator doesn’t want to discourage such investment by getting too tough, too early).<\/p>\n

On the flip side consumers within Hull have often complained that the lack of any major rivals, except a few somewhat limited alternative networks (fixed wireless and FTTP<\/a>), leaves them with precious little choice but to take their broadband and phone connectivity from KCOM<\/a>. Such gripes have reduced somewhat with the arrival of FTTP<\/a>, which offers a significantly better service, but the fundamental issue hasn’t gone away.<\/p>\n

More recently though KCOM have begun a \u00a3100m<\/strong> expansion of their FTTP network to cover “tens of thousands more homes and businesses<\/em>” across new parts of East Yorkshire and North Lincolnshire<\/strong> (here<\/a>), which unlike Hull are areas where major rivals like Openreach<\/a> (BT<\/a>) are already able to offer aggressively competitive FTTC<\/a>, and some FTTP, products at wholesale.<\/p>\n

NOTE:<\/strong> So far KCOM’s new rollout project has added areas such as Driffield, Market Weighton, Nafferton, Withernsea, Hornsea, Pocklington, Howden and Goole (here<\/a>).<\/div>\n

For KCOM this presents somewhat of a difficulty since they now need to think about real competition, which might explain why they recently slashed the cost of their entry-level unlimited 30Mbps broadband and phone package for new customers from \u00a340 to \u00a325 for the first 12 months of service (here<\/a>) – a good way of attracting FTTC<\/a> subscribers from rival ISPs.<\/p>\n

Meanwhile Macquarie Infrastructure<\/strong> (MIRA \/ MEIF 6 Fibre), which gobbled up KCOM for a hefty \u00a3627m<\/strong> last year (here<\/a>), have previously said that they would look to make the operator’s network available via more third-party ISPs (they’ll need to come up with a better wholesale proposition for that to work), but we’ve yet to see what that will look like. All of this is being factored into Ofcom<\/a>’s new review.<\/p>\n

Ofcom’s Review of KCOM’s Market<\/strong><\/span><\/h3>\n

Naturally Ofcom’s consultation<\/strong><\/a> remains laser focused on KCOM’s patch in Hull, where they’re still deemed to have SMP “at both the wholesale and retail level<\/em>.” Perhaps unsurprisingly, the regulator hasn’t proposed too many changes, but there are some key developments on the Dark Fibre<\/strong> front (i.e. allowing rival operators to use KCOM’s spare optical fibres, where viable) and some areas will also be deregulated.<\/p>\n

NOTE:<\/strong> Ofcom intends the new rules to apply between April 2021 and March 2026.<\/div>\n

Ofcom’s Proposals for KCOM<\/strong><\/span><\/p>\n

We propose to find that KCOM has market power in local access and leased lines access services and to address that market power by regulating in a way that supports competition and investment, and protects customers.<\/p>\n

Encouraging competition in the retail market.<\/strong><\/p>\n

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\u2019s network on fair and reasonable terms, we are also proposing to facilitate new entrants\u2019 use of KCOM\u2019s network by making improvements to the existing wholesale local access arrangements.<\/p>\n

Promoting access for rival providers to KCOM\u2019s leased lines access services, using dark fibre. <\/strong><\/p>\n

We propose that network providers should be able to lease from KCOM just the fibre element of a \u2018leased line\u2019 \u2013 the high-speed data connections used by large corporations and mobile networks.<\/p>\n

Deregulating the wholesale broadband access and fixed voice markets.<\/strong><\/p>\n

Given our increased focus on regulating KCOM\u2019s fibre wholesale local access services we now propose to deregulate the wholesale broadband access market. We also propose to deregulate fixed voice telephone services, as in the future these services will be provided over broadband connections.<\/p>\n

Improving access to KCOM\u2019s fibre network will mean more companies can provide such services in the Hull Area \u2013 our existing regulation is therefore no longer required. We are also deregulating the ISDN markets because the need for intervention is no longer necessary in this declining market.<\/p><\/blockquote>\n

The change to KCOM’s leased line access services is one of the more interesting developments. Broadly Ofcom intends to impose a new requirement to provide Ethernet and Dark Fibre network access in the following circuit configurations: A) Connecting end-user premises and KCOM’s ODF Site or Third Party premises; and, B) Connecting an end-user premises and another end-user premises.<\/p>\n

Ofcom also notes that two other “full fibre<\/em>” operators are present in the local market, which includes Cityfibre<\/a> (i.e. Dark Fibre that passes less than 1% of all premises but is more focused on serving mobile masts and businesses) and MS3<\/a> (passes 2% of all premises).<\/p>\n

Interestingly the regulator notes that MS3<\/a> plans to go much further: “It plans to cover a further 21,000 premises in the Hull Area by the end of June 2021, extending its network to reach around 13% of premises<\/em>” (we’ve reported on MS3<\/a>’s aspirations before, but that’s the first time we’ve had a solid date).<\/p>\n

The regulator also notes that several ISPs resell KCOM’s services, such as Excel Telecom, River and The One Point. Separately there are also a few Fixed Wireless Access (FWA) providers, but their influence is fairly low.<\/p>\n

Ofcom Statement<\/strong><\/p>\n

“Our strategy for fixed telecoms markets is to promote competition and investment to deliver better broadband and mobile services wherever people live or work. In the Hull Area, we propose to focus our regulation on encouraging competing providers to enter the market.<\/p>\n

In the Hull Area, consumers benefit from the availability of KCOM\u2019s full-fibre network. However, KCOM has retained a near monopoly at both the wholesale and retail level. This has resulted in less retail choice and higher retail prices than the rest of the UK, where competitive pressure has resulted in greater choice and lower prices.<\/p>\n

We have therefore carefully considered whether more direct measures, such as retail price regulation, are required. However, we believe the evidence shows 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. We also understand KCOM has reviewed its retail prices, and is planning to bring them more into line with the rest of the UK.”<\/p><\/blockquote>\n

Responses to this consultation must be received by 24th September 2020 and Ofcom intend to publish a statement setting out their decisions before the new regulation will take effect in April 2021.<\/p>\n","protected":false},"excerpt":{"rendered":"

After a bit of a COVID-19 delay. Ofcom has today opened a review of regulation on KCOM’s network in the Hull (East Yorkshire) area, which last year completed the roll-out of a new gigabit Fibre-to-the-Premises (FTTP) broadband service across their entire network and is now expanding beyond that footprint.<\/p>\n","protected":false},"author":1,"featured_media":22792,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1,1645],"tags":[56,76,36],"class_list":["post-22790","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","category-key_uk_isp_industry_developments","tag-fttp","tag-kc","tag-ofcom-regulation"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nOfcom Propose Tweaks and Dark Fibre for KCOM in Hull UK - ISPreview UK<\/title>\n<meta name=\"description\" content=\"After a bit of a COVID-19 delay. 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