{"id":33890,"date":"2023-03-08T13:27:12","date_gmt":"2023-03-08T13:27:12","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=33890"},"modified":"2023-03-08T15:46:16","modified_gmt":"2023-03-08T15:46:16","slug":"inca-accuses-ofcom-of-putting-uk-full-fibre-rollout-at-risk","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/03\/inca-accuses-ofcom-of-putting-uk-full-fibre-rollout-at-risk.html","title":{"rendered":"INCA Accuses Ofcom of Putting UK Full Fibre Rollout at Risk UPDATE"},"content":{"rendered":"

The Independent Networks Co-operative Association<\/a>, which represents UK alternative broadband ISP networks, has today warned Ofcom<\/a> that “more than \u00a325bn worth of investment<\/em>” to improve the UK\u2019s digital infrastructure “will be directly threatened<\/em>” if Openreach<\/a> is allowed to introduce new FTTP<\/a> wholesale price discounts (Equinox 2).<\/p>\n

Just to recap. Openreach<\/a> are set to introduce a new round of wholesale discounts on their full fibre broadband products from April 2023<\/strong> (here<\/a>). The move is intended to help their ISPs stay competitive with newer alternative networks (Summary of UK Full Fibre Builds<\/strong><\/a>) and further reduce the price of related packages, which will in turn boost take-up by consumers and aid the move away from copper lines.<\/p>\n

NOTE:<\/strong> BT<\/a> are investing up to \u00a315bn to cover 25 million premises with FTTP<\/a> by December 2026 (80%+ of the UK). So far, they\u2019ve already completed 9.6 million.<\/div>\n

As we’ve previously said, the discounts under Equinox 2 are not as dramatic as Equinox 1, with smaller changes to rentals and some reductions in connection charges. Nevertheless, more than a few AltNets view the move as being anticompetitive (here<\/a>), with CityFibre<\/a> even going so far as to lodge a Competition Act complaint with the Competition and Markets Authority<\/strong> (CMA) and Ofcom<\/a> (here<\/a>).<\/p>\n

Openreach<\/a>’s smaller rivals carry a lot of risk due to being in the earliest stages of investment and build, but many of which have previously enjoyed a market where the operator was traditionally much more expensive. This made it easier for them to grow take-up, attract investment and gain support from ISPs to join alternative wholesale options. But at the same time, they fear that Openreach’s response (more discounts) may be putting all of that at risk.<\/p>\n

However, last month saw Ofcom<\/a> take the “provisional<\/em>” position not to intervene (here<\/a>), which the regulator said was because Openreach’s offer is “not anti-competitive and is consistent with the rules we consulted on before introducing them under our market review in 2021<\/em>.” INCA has now responded to the related consultation<\/a> and their reaction is much the same as it was last December (here<\/a>).<\/p>\n

Malcolm Corbett, INCA CEO, said:<\/strong><\/p>\n

“The Government\u2019s policy of encouraging competitive investment has been hugely successful with more than \u00a325bn of investment committed to BT<\/a>\u2019s competitors. Allowing Equinox 2 to be implemented would have a serious negative effect, undermining the investment incentives for altnets of all sizes, across all business models, and would put the UK\u2019s largest privately funded infrastructure programme at risk.<\/p>\n

Ofcom\u2019s assessment of the Equinox 2 offer appears to reflect a strong bias to protect BT<\/a> Openreach\u2019s full fibre business plan and has a complete disregard for the many smaller market entrants and the billions of pounds invested in those networks. This also runs counter to the digital infrastructure policies of the Government, largely being driven by private sector investment, and which underpin the ambitions of the new Department for Infrastructure Science and Technology.<\/p>\n

Our message to Ofcom and Government here is quite simple: these ambitions, that can have a transformative impact on the country\u2019s digital landscape, economy and reputation, are being propelled by investment into independent networks. It\u2019s the regulator\u2019s and Government\u2019s responsibility to make decisions that do not jeopardise that. We call on Ofcom to do the right and logical thing and block Equinox 2 from entering the market.”<\/p><\/blockquote>\n

As well as reversing the decision to allow Equinox 2 to go ahead, INCA also seeks several other changes.<\/p>\n

INCA’s Recommendations to Ofcom<\/strong><\/span><\/p>\n

\u27a4 In the longer term, BT Openreach should not be allowed to engage in continuous signalling of new offers that are designed to destabilise the market and prevent altnet growth.<\/p>\n

\u27a4 To ensure competition in full fibre provision and avoid depriving consumers of choice and value for money, INCA recommends that BT Openreach must not be able to implement schemes that link discounts to loyalty conditions. Such loyalty schemes abuse BT Openreach\u2019s in-built advantage of an existing customer-base of almost totally dependent ISPs on the copper network.<\/p>\n

\u27a4 INCA\u2019s response also highlights where it believes Ofcom\u2019s analysis is deficient, incomplete and flawed. For example, the regulator only considers the impact of Equinox 2 on the three largest ISPs and the three largest altnets.<\/p><\/blockquote>\n

Blocking Openreach from being able to compete on price might seem like a good idea to AltNets, but it’s unlikely to go down well with consumers (particularly if Openreach’s FTTP<\/a> is your only option today). Lest we forget that the regulator’s analytical framework remains more “concerned with the promotion of competition rather than the protection of competition as under competition law<\/em>” (Ofcom quote).<\/p>\n

As ever, the challenge in all this is with figuring out where to draw the line when trying to balance the vested interest of both sides. Ofcom has allowed Openreach plenty of flexibility to stay competitive, as may seem only fair in such an aggressively competitive market \u2013 this is part of the reason why the dominant player opted to invest so much money into FTTP in the first place.<\/p>\n

On the flip side, AltNets are much more exposed to the market’s many challenges, such as with high inflation and rising deployment costs. At the same time, it’s harder for newer entrants to attract customers, as they can’t trade off brand familiarity and often won’t be on commercial comparison sites. Some networks get around this by attracting big name ISPs and conducting heavy local advertising, but not everybody can do that.<\/p>\n

However, Ofcom have already said that they’re “alive to the concerns<\/em>” of some market participants that Openreach\u2019s practice of amending its full-fibre prices could act as a barrier to competitors\u2019 entry and expansion in the market. As a result, they’re gathering evidence to decide whether to investigate this matter in more detail, but that won’t change the outcome for Equinox 2.<\/p>\n

UPDATE 3:44pm<\/strong><\/p>\n

A spokesperson for Ofcom told ISPreview.co.uk: “We\u2019ll be carefully considering all responses to our consultation before making our final decision<\/em>.”<\/p>\n","protected":false},"excerpt":{"rendered":"

The Independent Networks Co-operative Association, which represents UK alternative broadband ISP networks, has today warned Ofcom that “more than \u00a325bn worth of investment” to improve the UK\u2019s digital infrastructure “will be directly threatened” if Openreach is allowed to introduce new FTTP wholesale price discounts (Equinox 2).<\/p>\n","protected":false},"author":1,"featured_media":32738,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[418,56,86,36,69],"class_list":["post-33890","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-cityfibre","tag-fttp","tag-law","tag-ofcom-regulation","tag-bt-openreach"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nINCA Accuses Ofcom of Putting UK Full Fibre Rollout at Risk UPDATE - ISPreview UK<\/title>\n<meta name=\"description\" content=\"The Independent Networks Co-operative Association, which represents UK alternative broadband ISP networks, has today warned Ofcom that "more than \u00a325bn\" \/>\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\/2023\/03\/inca-accuses-ofcom-of-putting-uk-full-fibre-rollout-at-risk.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"INCA Accuses Ofcom of Putting UK Full Fibre Rollout at Risk UPDATE - 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