{"id":25021,"date":"2020-12-01T11:06:29","date_gmt":"2020-12-01T11:06:29","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=25021"},"modified":"2020-12-04T07:57:47","modified_gmt":"2020-12-04T07:57:47","slug":"fury-as-alternative-uk-fibre-networks-hit-by-new-openreach-fee","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2020\/12\/fury-as-alternative-uk-fibre-networks-hit-by-new-openreach-fee.html","title":{"rendered":"Fury as Alternative UK Fibre Networks Hit by New Openreach Fee UPDATE4"},"content":{"rendered":"

Openreach<\/a> (BT<\/a>) has generated a furious response from alternative UK broadband networks (AltNets) after they introduced a new fee on certain FTTP<\/a> linked connections, which broadband ISPs have described as being “punitive<\/em>” and a “blatant attempt by [the operator] to regain a monopoly<\/em>” that is likely to “slow the rollout of full fibre<\/em>.”<\/p>\n

At present Openreach<\/a> is facing a huge rise in competition from alternative gigabit-capable Fibre-to-the-Premises<\/strong> (FTTP<\/a>) networks (Summary of Full Fibre Build Progress<\/strong><\/a>), with the Independent Networks Co-operative Association<\/a> (INCA) predicting that such providers will deliver 2.42 million full fibre premises by the end of 2020, before rising to 15.73 million by the end of 2025.<\/p>\n

The Government’s new \u00a35bn Gigabit Broadband (F20)<\/strong><\/a> programme also appears set to support this progress by becoming more accessible to altnets than prior schemes, which all told may help to further erode Openreach<\/a>’s traditional dominance in the market. Much of this change has been underpinned by Ofcom<\/a>’s regulation and cuts to business rates, which has gradually made it easier to build altnet platforms in the UK.<\/p>\n

Despite this there are fears that a big chunk of this good work by AltNets could now suffer a setback after Openreach shocked many such providers with their latest charge notification, which centres around “price changes for leased line circuits being used to aggregate FTTP<\/a> to multiple premises<\/em>” (Briefing GEN102\/20<\/a>).<\/p>\n

Openreach Briefing Statement<\/strong><\/p>\n

In order to better align with what we are required to do under regulation, we are revising our pricing for leased lines (covering Ethernet and Optical products) with certain use cases.<\/p>\n

Specifically, Openreach is not obliged under regulation to provide network access using leased lines to intermediate nodes in the fixed network, which includes to intermediate aggregation nodes in FTTP networks, as they are not part of the relevant market where we have Significant Market Power (SMP).<\/p>\n

We are changing the pricing for leased lines that are being used to aggregate FTTP to multiple homes and business premises from aggregation nodes e.g. from a street based cabinet or similar locations with effect from 1 January 2021. From this date we will be introducing an annual supplemental charge (in addition to the standard rental and connection charges applicable) for leased line services used for this use case.<\/p>\n

…<\/p>\n

From this date we require Communications Providers (CPs) to self-certify orders for this use case by including “FTTP aggregation” in the relevant product order notes. … Openreach will periodically audit details on circuits and will seek clarification of the use case of circuits as necessary and where it is confirmed that circuits are being used for FTTP aggregation but were not self-certified at order entry, the supplementary charge will be applied from the point of confirmation, and the CP will be retrospectively charged the supplementary rental back to the date of provision, for orders placed from 1 January 2021.<\/p><\/blockquote>\n

The “supplemental annual rental<\/em>” increase ranges from \u00a3560.00 +vat on 1Gbps Ethernet (e.g. EAD) products and goes all the way up to \u00a311,060.00 for certain other optical spectrum (OSA \/ OSEA) products. Essentially, AltNets view this “punitive fee<\/em>” as making things difficult (much more expensive) for ISPs who want to use Openreach’s products to build competitive FTTP networks.<\/p>\n

The change will initially have the biggest impact on EAD users, but it will also apply to many of Openreach’s other Ethernet solutions too, including the upcoming Dark Fibre Access<\/strong> (DFA) product, which may risk undermining the whole point of it.<\/p>\n

Instead the operator appears to be steering altnets toward their Physical Infrastructure Access<\/strong> (PIA) product, which allows ISPs to run their own fibre through existing cable ducts, but this will be seen by some as raising the barriers for the smallest players. EAD is very accessible and supplied as a fully installed and managed service, while PIA requires a lot more effort via compliance, training, labour costs etc.<\/p>\n

Much of the feedback we’ve had about this has been off-the-record, although various providers have described the change as being “overtly aggressive,<\/em>” reflective of “totally shocking behaviour,<\/em>” and a “massive game changer for the UK altnet industry<\/em>.”<\/p>\n

As another operator put it, the change was done “intentionally to screw over all alternate networks who are building their own networks but have no alternative but to use the monopoly for backhaul<\/em>.” We did have the odd on-the-record comment though.<\/p>\n

A Spokesperson for Zone Broadband<\/a> said:<\/strong><\/p>\n

“This is totally shocking behaviour by Openreach and will slow the rollout of Full Fibre Broadband Networks throughout the UK by Alt Net Providers. This is a blatant attempt by Openreach to regain a monopoly and make End Users wait for their own FTTP network to finally reach them, thus limiting the number of Alt Net Providers who are filling the vital gap in connectivity to the hardest to reach areas of the UK.”<\/p><\/blockquote>\n

Simon Green of 1310<\/a> said:<\/strong><\/p>\n

“Essentially they’re making things difficult for ISPs who want to use the OR products to build competition to OR FTTP. The 10G levy is especially egregious. They’re not blocking the use of it for CP networks with a contract change, they’re just adding on a punitive fee.<\/p>\n

In my UKNOF talk a few weeks ago I described Openreach as a fantastic business and a huge opportunity for altnets. I’ve used Openreach for quite a long time now, and this is the first time I’ve seen them do something overtly aggressive against its customers.<\/p>\n

Even the tone of the language on the announcement starts out in an aggressive way.”<\/p><\/blockquote>\n

We note that, in respect to Ethernet Access Direct<\/strong> (EAD) products, Openreach’s pricing is regulated by Ofcom<\/a>, although some AltNets believe that the operator has found a “loophole where pricing for products that aren’t used to directly serve end-users is exempt from regulation<\/em>.”<\/p>\n

Openreach’s own briefing claims that the change is “in order to better align with what we are required to do under regulation<\/em>,” although one AltNet comically suggested a different interpretation of that wording – “In order to screw over our competitors when not prohibited from doing so by regulation<\/em>“.<\/p>\n

An Openreach Spokesperson told ISPreview.co.uk:<\/strong><\/p>\n

“Openreach isn\u2019t obliged to connect \u2018intermediate nodes\u2019 (such as street cabinets) for alternative FTTP providers, using leased lines. But if companies do want to use this route rather than building their own Full Fibre networks, we\u2019re happy to connect street cabinets at a reasonable price.<\/p>\n

Of course they can also use our nationwide network of ducts and poles, which Ofcom<\/a> has specifically introduced for others to build Full Fibre, and is available under regulated prices, terms and conditions.”<\/p><\/blockquote>\n

An Ofcom Spokesperson added:<\/strong><\/p>\n

“We are aware of the concerns that have been raised and we are looking into them.”<\/p><\/blockquote>\n

The broad perception from AltNets is still that Openreach has made an “anti-competitive move<\/em>,” which is going to make networks more expensive and that in turn could have direct cost implications for customers (i.e. higher consumer prices to compensate for increased delivery costs). Rarely have we ever seen such a sudden and large reaction to one of Openreach’s changes, which shows how seriously it’s being taken.<\/p>\n

We contacted both Openreach and Ofcom for comment just after 7am this morning and are awaiting their responses.<\/del><\/p>\n

UPDATE 3:26pm<\/strong><\/p>\n

Both Openreach and Ofcom have now responded above.<\/p>\n

UPDATE 4:48pm<\/strong><\/p>\n

We’ve just had a new comment from UKWISPA, which represents over 100 operators (fixed wireless ISPs) across the UK and most of them depend to some extent on Openreach circuits.<\/p>\n

David Burns, UKWISPA’s chairman, said:<\/strong><\/p>\n

“This is terrible news for the homes and businesses who depend on using alterative network providers for their broadband access.<\/p>\n

Openreach have effectively added a Competition Tax aimed exclusively at their smaller competitors who will either lose money or have to sell their access services at an inflated price. It is unthinkable that Ofcom or the Department for Digital, Culture, Media and Sport could allow Openreach to introduce such an anti-competitive levy and exploit their monopoly position.<\/p>\n

We will be writing to Ofcom and the UK Government to intervene in this urgently and will consider a legal challenge against Openreach, but as ever when tackling a giant such as BT<\/a>, it is very hard for smaller organisations to fight on level terms.”<\/p><\/blockquote>\n

UPDATE 2nd December 2020 – 12:27pm<\/strong><\/p>\n

Openreach has issued another statement, this time in response to UKWISPA above. A spokesperson said: “We note the comments from UKWISPA and would like to make it clear that Fixed Wireless Access (FWA) and Mobile cell site connectivity and backhaul is unaffected by this change. Openreach\u2019s change as per its briefing specifically relates to the pricing for leased lines that are being used to aggregate Full Fibre To The Premise (FTTP) to multiple homes and business premises from aggregation nodes e.g. from a street based cabinet or similar locations with effect from 1 January 2021<\/em>.”<\/p>\n

UPDATE 4th December 2020 – 7:55am<\/strong><\/p>\n

Openreach’s new charge was mentioned during yesterday’s Commons Chamber debate on Digital Infrastructure.<\/p>\n

Richard Thomson (SNP) said:<\/strong><\/p>\n

“In the remaining time available, let me speak up for the alternative providers known as altnets. For those who are unfamiliar with them, they are alternative internet service providers who rely on radio connections or even their own fibre to provide internet broadband services, but they rely on existing infrastructure from companies such as Openreach for the backhaul. <\/p>\n

Openreach recently made an announcement, aimed at those particular providers, that it would be levying a supplementary charge, and it is no exaggeration to describe that charge as punitive. I would almost go so far as to say that the charges it proposes to place on the leasing of those lines could in some cases be anti-competitive, and I hope to have a conversation with the Minister about that so that we can look into it further.”<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Openreach (BT) has generated a furious response from alternative UK broadband networks (AltNets) after they introduced a new fee on certain FTTP linked connections, which broadband ISPs have described as being “punitive” and a “blatant attempt by [the operator] to regain a monopoly” that is likely to “slow the rollout of full fibre.”<\/p>\n","protected":false},"author":1,"featured_media":25022,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[472,478,52,56,69],"class_list":["post-25021","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-business","tag-ethernet","tag-fibre-optic","tag-fttp","tag-bt-openreach"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nFury as Alternative UK Fibre Networks Hit by New Openreach Fee UPDATE4 - ISPreview UK<\/title>\n<meta name=\"description\" content=\"Openreach (BT) has generated a furious response from alternative UK broadband networks (AltNets) after they introduced a new fee on certain FTTP linked\" \/>\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\/2020\/12\/fury-as-alternative-uk-fibre-networks-hit-by-new-openreach-fee.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fury as Alternative UK Fibre Networks Hit by New Openreach Fee UPDATE4 - 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