{"id":26398,"date":"2021-03-23T09:52:56","date_gmt":"2021-03-23T09:52:56","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=26398"},"modified":"2021-03-23T09:52:56","modified_gmt":"2021-03-23T09:52:56","slug":"ofcom-side-with-openreach-over-extra-charge-for-fttp-altnets","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2021\/03\/ofcom-side-with-openreach-over-extra-charge-for-fttp-altnets.html","title":{"rendered":"Ofcom Side with Openreach Over Extra Charge for FTTP AltNets"},"content":{"rendered":"

Last year we reported that smaller full fibre building alternative UK broadband network providers (AltNets) were furious after Openreach<\/a> imposed a “punitive<\/em>” new fee on those using Ethernet (e.g. EAD) products to feed their FTTP<\/a> service to end-users (here<\/a>). You had to do some digging to find it, but Ofcom<\/a> has chosen to uphold this.<\/p>\n

The issue arose after Openreach<\/a> shocked smaller AltNets with a new charge notification, which was introduced on 1st January 2021<\/strong> and centred around “price changes for leased line circuits being used to aggregate FTTP<\/a> to multiple premises<\/em>” (Briefing GEN102\/20<\/a>). Suddenly those providers found themselves facing a new annual charge, which ranged 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 products.<\/p>\n

At the time Openreach<\/a> said they were, “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<\/a> networks, as they are not part of the relevant market where we have Significant Market Power (SMP)<\/em>.”<\/p>\n

The move caused uproar among a fair number of smaller AltNets, which had been using Ethernet style leased lines to fuel capacity for FTTP to multiple homes and business premises from street cabinets or other aggregation nodes. Some called it “overtly aggressive,<\/em>” while others said it was “punitive<\/em>,” reflected “totally shocking behaviour,<\/em>” and many agreed that it was a “massive game changer for the UK altnet industry<\/em>.”<\/p>\n

An Openreach Spokesperson told ISPreview.co.uk (Dec 2020):<\/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

Instead, the operator sought to steer altnets toward their Physical Infrastructure Access<\/strong> (PIA) product, which allows ISPs to run their own fibre through existing cable ducts, but this is 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. PIA prices are also going up.<\/p>\n

On the flip side there was a concern that the way leased lines were being used by altnets to fuel FTTP may not be sustainable over the long-term. But countering this is the fact that Fixed Wireless Access (FWA) and Mobile cell site connectivity and backhaul is unaffected by this change (caveat: unlike FTTP altnets, wireless\/mobile operators won’t always have the ability to build their own backhaul links).<\/p>\n

In response, Ofcom<\/a> confirmed that they were “aware of the concerns that have been raised and we are looking into them<\/em>.” The answer came last week with the publication of their massive Wholesale Fixed Telecoms Market Review 2021-26 (here<\/a>). On the surface this appeared to indicate that there would be no changes, but if you spent a few hours digging through the pile of digital paper work then there was a spot of bad news for small altnets.<\/p>\n

Ofcom’s Statement (Volume 3)<\/strong><\/a><\/p>\n

“Generally, the way we define markets, for the purpose of ex ante regulation, is based on the service characteristics and the geographic area they are in \u2013 not what use the service is being put to. As noted in Volume 2, we define LL Access circuits as dedicated circuits between an end user site and the first point of aggregation (or in some cases between end user sites). Therefore, leased line circuits being used to aggregate FTTP to multiple premises may fall within the LL Access markets, depending on whether a FTTP cabinet is viewed as an end-user site.<\/p>\n

However, the network access obligations that we impose in the LL Access markets reflect our strategy to promote network competition where it is viable. We will interpret the network access obligations in the LL Access markets not to require<\/strong> Openreach to provide active leased line circuits or dark fibre access circuits where they would be used to aggregate FTTP to multiple premises for the purposes of deploying a fibre access network.<\/p>\n

We do not consider such access to be reasonable as telecoms providers already deploying their own fibre access networks are able to use PIA for these connections.”<\/p><\/blockquote>\n

No doubt some ISPs may yet find inventive ways of re-categorising their deployments to avoid Openreach’s charge, and it’s similarly unclear how this works for providers that may be serving both Fixed Wireless Access (FWA) and FTTP from the same cabinet (this does happen).<\/p>\n

Equally, it’s unclear how Openreach would view situations where EAD is being used to serve gigabit broadband into MDUs (apartment blocks), where the last few metres into homes may be via copper (i.e. not true FTTP). At the end of the day, charging for a leased line on the basis of how it’s used, rather than what the product actually delivers, is a bumpy road, but it\u2019s this road that smaller players will now have to navigate around.<\/p>\n

Meanwhile, the Independent Networks Cooperative Association<\/a> (INCA) has already criticised Ofcom for being “fixated only on incentivising BT<\/a> to invest, dismissing the majority of altnets as bit players, recognising few of their concerns in the market review statement. If operators and their investors believe that the regulator is not willing to listen to their concerns and act on them it risks delaying deployment and undermining the government targets, particularly in more challenging rural areas<\/em>.”<\/p>\n","protected":false},"excerpt":{"rendered":"

Last year we reported that smaller full fibre building alternative UK broadband network providers (AltNets) were furious after Openreach imposed a “punitive” new fee on those using Ethernet (e.g. EAD) products to feed their FTTP service to end-users (here). You had to do some digging to find it, but Ofcom has chosen to uphold this.<\/p>\n","protected":false},"author":1,"featured_media":26400,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[472,478,52,56,36,69],"class_list":["post-26398","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-ofcom-regulation","tag-bt-openreach"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nOfcom Side with Openreach Over Extra Charge for FTTP AltNets - ISPreview UK<\/title>\n<meta name=\"description\" content=\"Last year we reported that smaller full fibre building alternative UK broadband network providers (AltNets) were furious after Openreach imposed a\" \/>\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\/2021\/03\/ofcom-side-with-openreach-over-extra-charge-for-fttp-altnets.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ofcom Side with Openreach Over Extra Charge for FTTP AltNets - 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