{"id":39289,"date":"2024-09-06T12:51:26","date_gmt":"2024-09-06T11:51:26","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=39289"},"modified":"2024-09-06T14:52:45","modified_gmt":"2024-09-06T13:52:45","slug":"openreach-calls-for-virgin-media-to-open-uk-cable-ducts-to-rivals","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2024\/09\/openreach-calls-for-virgin-media-to-open-uk-cable-ducts-to-rivals.html","title":{"rendered":"Openreach Calls on Virgin Media to Open UK Cable Ducts to Rivals UPDATE"},"content":{"rendered":"

The CEO of Openreach<\/a> (BT<\/a>), Clive Selley, has today set out their position with respect to Ofcom<\/a>’s forthcoming Telecoms Access Review 2026<\/a> (TAR), which amongst other things sees the UK operator call for the regulator and Government to push Virgin Media<\/a> (O2<\/a>) and others into opening up access to their cable ducts to help reduce the number of broadband poles being built.<\/p>\n

The regulator’s Telecoms Access Review 2026<\/strong> (TAR) is a wide-ranging market study, which is typically only conducted every 5-years and will usually look to make changes that \u201cpromote competition and investment<\/em>\u201d in gigabit broadband and business connectivity. Such things are always easier said than done, with vested interests frequently clashing.<\/p>\n

NOTE:<\/strong> Openreach<\/a>\u2019s 1.8Gbps speed Fibre-to-the-Premises (FTTP<\/a>) broadband network covers well over 15 million premises and they\u2019re investing up to \u00a315bn to hit 25m by December 2026 (here<\/a>), before reaching up to 30 million by 2030.<\/div>\n

The outcome of the last review, which was published in March 2021 (here<\/a>), introduced a variety of key changes, such as regulation of Openreach<\/a> that varied by geography, a new Dark Fibre Access (DFA) product, measures to help retire legacy copper-based networks, restrictions on broadband discounts and new Quality of Service (QoS) standards.<\/p>\n

Reviews like this have historically tended to expend most of their energy on demanding changes of the market incumbents (i.e. Openreach across the UK and KCOM<\/a> in Hull), such as requiring them to open up access to their own cable ducts and poles (Physical Infrastructure Access<\/strong>) so that rivals could more easily deploy gigabit-capable broadband networks (usually via FTTP<\/a> technology).<\/p>\n

However, the last review was arguably a bit softer on Openreach in order to give them a “fair bet<\/em>” in rolling out full fibre networks across the UK. The dramatic increase in competitive FTTP<\/a> builds since 2021 may similarly have an impact on Ofcom<\/a>’s thinking in the next review. So far we’ve already seen some of Openreach’s rivals calling for improvements to PIA and related pricing (here<\/a>), but today it was Openreach’s turn to set out their stall.<\/p>\n

Clive Selley said:<\/strong><\/p>\n

“Ofcom<\/a>\u2019s Wholesale Fixed Telecoms Market Review (WFTMR), which took effect on 1 April 2021, delivered a five-year package of rules that the regulator said would endure for at least ten, assuming the outcomes were as expected. It also made clear that \u201cfull fibre must be a fair bet\u201d for investors over the longer term.[2] This was crucial, given the risk and long paybacks involved in big infrastructure investments.<\/p>\n

Fast-forward to today and more than 150 companies are now using our ducts and poles to build competing networks and we\u2019ve made full fibre available to more than 15 million premises nationwide off our own back. We\u2019re reaching a further one million properties every three months, and we\u2019re on track with our ambition to reach 25 million by the end of 2026. In fact, Ofcom expects 96 per cent of the UK could have access to full fibre by 2027, compared with just two per cent in 2016.<\/p>\n

In a nutshell: the WFTMR isn\u2019t just working, it\u2019s working better than expected for the UK. But the job\u2019s not done yet. And investors are yet to see if their big bets will pay off.<\/p>\n

Investment in full fibre needs to continue for the rest of the decade as the build extends to the more challenging and costly parts of the UK and the industry connects customers to the new networks. And for our part, we\u2019re confident that we can reach 30 million premises by the end of 2030, assuming the right regulatory and investment environment exists<\/strong>.”<\/p><\/blockquote>\n

Selley goes on to state that Ofcom should “reject self-interested calls from some parts of the industry to restrict how Openreach competes … Because it\u2019s clear that would lead to higher prices, weaker competition and a dilution of choice for consumers and businesses<\/em>.”<\/p>\n

Openreach’s boss also wants the regulator to address the “challenges of moving to a full fibre world<\/em>“, such as by “supporting a drive for efficiency and enabling Openreach to retire legacy buildings and services where modern alternatives exist. Quality of Service (QoS) standards must also evolve to reflect the positive shift from copper to fibre<\/em>.” But rivals will be hoping that “evolving<\/em>” QoS standards doesn’t lead to weaker performance.<\/p>\n

Openreach’s Ambitions for 2026 and Beyond (TAR)<\/strong><\/span><\/p>\n

\u2713 Maintaining certainty and stability on price regulation for at least the rest of the decade<\/strong> – as was envisaged back in 2021 – continuing to only set direct charge controls on legacy services, with caps kept flat in real terms, and with the same regulation applied across the country<\/p>\n

\u2713 Sustaining an approach that allows us to compete fairly<\/strong> and introduce offers that support full fibre adoption<\/p>\n

\u2713 Reducing regulation where entry has occurred<\/strong>, and competition is effective<\/p>\n

\u2713 Supporting exchange exit and other efforts to improve long-term efficiency<\/strong><\/p>\n

\u2713 Evolving Quality of Service standards<\/strong> to reflect the changing mix of services used by customers<\/p><\/blockquote>\n

The operator’s full report<\/strong><\/a> also echoes the CEO of BT<\/a> Group, Allison Kirkby<\/strong>, who called for various improvements to planning laws (something the government are looking at) and support for flexi-permits (i.e. a single permit can cover a wide geographical area instead of numerous separate street applications). But Selley’s most interesting remark is one of his last.<\/p>\n

“Ofcom and Government should also require Virgin Media<\/a> O2<\/a> (VMO2) and others to open up their duct and pole networks on the same transparent terms including price as Openreach\u2019s duct and poles product<\/em>,” said Openreach’s CEO, Clive Selley. Openreach argues that this would help to support the government’s current drive to increase infrastructure sharing and thus reduce the number of new poles being deployed (here<\/a>).<\/p>\n

Ofcom has previously rejected this idea, which is partly because Virgin Media<\/a>’s closed network has largely stayed under the coverage level that would otherwise deem them to have Significant Market Power (they have over 16 million premises). This may be partly why some of the operator’s parents (Liberty Global and Telefonica) have sought to continue their network expansion, albeit via an open access model, under a new company – nexfibre<\/a>.<\/p>\n

Just to recap. Telef\u00f3nica, Liberty Global and InfraVia Capital Partners originally setup the new \u00a34.5bn nexfibre<\/a> joint venture in 2022 (here<\/a>), which aims to deploy an open access fibre network to reach \u201cup to<\/em>\u201d 7 million UK homes (starting with 5m by 2026) in areas NOT currently served by Virgin Media\u2019s network. The two networks, combined, could thus conceivably end up covering 23m premises (nexfibre<\/a> has so far reached 1.3m).<\/p>\n

Virgin Media are of course due to split off their own network of 16m+ premises into a new NetCo<\/strong> next year, which will open it up to wholesale. Quite how Ofcom will view all of this is a complex matter, but at present we wouldn’t be at all surprised if the regulator chose to wait until the 2031 review to make a decision, rather than the one for 2026. But by then most of the fibre build will be done. Tricky.<\/p>\n

Right now, there are still many unknowns with how the market and company structures may evolve, while nexfibre’s coverage is still low and semi-separate from Virgin Media. In addition, none of Openreach’s smaller rivals in the alternative network space are even close to having SMP. Forcing PIA upon smaller operators in a weaker and higher risk position, particularly in this climate, would not be without negative consequences.<\/p>\n

As always, we expect a lively debate to flow around Ofcom’s major market review.<\/p>\n

UPDATE 2:50pm<\/strong><\/p>\n

We’ve received a comment from Virgin Media, which notes that it’s already possible to use their ducts on a “commercial basis<\/em>“, but making that attractive enough for wide adoption is often another matter entirely (Openreach above are talking more about a PIA style regulated solution).<\/p>\n

A Virgin Media O2<\/a> spokesperson said:<\/strong><\/p>\n

\u201cThe ability to use Virgin Media\u2019s ducts on a commercial basis already exists, but Openreach has significant market power in the UK and a footprint that covers almost all of the country, so it is right that it remains appropriately regulated to ensure it cannot use its monopolistic muscle to constrain emerging competition.<\/p>\n

Virgin Media O2 and others are building fibre to increase network choice in the UK and it\u2019s important that Ofcom supports these investments so that truly scaled competition can be realised in future. Calling for regulatory intervention on others who are building alternative networks is a worrying and diversionary tactic that Openreach has used before with no success.\u201d<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

The CEO of Openreach (BT), Clive Selley, has today set out their position with respect to Ofcom’s forthcoming Telecoms Access Review 2026 (TAR), which amongst other things sees the UK operator call for the regulator and Government to push Virgin Media (O2) and others into opening up access to their cable ducts to help reduce […]<\/p>\n","protected":false},"author":1,"featured_media":22935,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[52,56,36,69,475],"class_list":["post-39289","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-fibre-optic","tag-fttp","tag-ofcom-regulation","tag-bt-openreach","tag-virgin-media"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/113090467551421183","error":""},"yoast_head":"\nOpenreach Calls on Virgin Media to Open UK Cable Ducts to Rivals UPDATE - ISPreview UK<\/title>\n<meta name=\"description\" content=\"The CEO of Openreach (BT), Clive Selley, has today set out their position with respect to Ofcom's forthcoming Telecoms Access Review 2026 (TAR), which\" \/>\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\/2024\/09\/openreach-calls-for-virgin-media-to-open-uk-cable-ducts-to-rivals.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Openreach Calls on Virgin Media to Open UK Cable Ducts to Rivals UPDATE - 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