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BT Openreach: Mixed industry reactions to Ofcom’s duct and pole dance

Ofcom’s initial recommendations on the future of BT’s network arm Openreach have drawn mixed responses from the UK telecoms industry. 

While others have welcomed the move to open up BT’s access network as a means to reach more customers with next-gen services, others have been less forthcoming in their praise. 

Least happy with the proposals is TalkTalk’s CEO Dido Harding, who said that the UK’s communications regulator hasn’t gone far enough with its proposals. 

“Ofcom has produced 100 pages of consultation with little concrete action behind it,” Harding said. 

“The risk is that we end up with 10 more years of debate and delays, rather than facing into the problems and delivering improvements for frustrated customers now.” 

A spokesperson for Sky added that ‘we look forward to playing a positive role in helping make Britain a digital world leader,’ reiterating that the best thing Sky thinks could happen would be for Openreach to be totally removed from the BT Group. 

Get duct (and pole access)

ISPs including TalkTalk sell fixed-line services to customers using BT’s access near-nationwide network of exchanges and street cabinets (Openreach) to connect punters homes to core networks. 

Lack of access to BT’s ducts and telegraph poles – called ‘Physical Infrastructure’ in industry-spiel – is cited as one of the many things that cements BT’s top dog position. 

While Ofcom’s early plans include a remedy for this situation, there’s little to nothing to suggest that it plans to force BT to lower the price it charges ISPs for FTTC (Fibre to the Cabinet) and FTTP (Fibre to the Premises) services; Ofcom says it expects to maintain its approach of not regulating prices for ‘new investments’. 

This has long been a bone of contention for ISPs, particularly TalkTalk and Sky. So much so that they’ve embarked upon a joint venture with rival infrastructure provider CityFibre, which has the potential to offer an alternative to Openreach itself. 

BT’s plans for the next five years include delivering a minimum 10Mbps service to all UK addresses and making G.fast-based services, capable of delivering speeds of 700Mbps in lab conditions, available to 10 million addresses

Full fat fibre vs a semi-skimmed solution

CityFibre could well bring gigabit FTTP to a similar number of customers within the same timeframe. Greg Mesch, CEO of CityFibre said: “[Ofcom’s] report’s conclusions are clear, that to meet the UK’s current and future digital communication needs, and enable widespread availability of competing FTTP networks, a strategic shift to support large-scale investment in end-to-end fibre is required.” 

G.fast lines, while mainly consisting of optical fibre, rely on last-gen copper lines to reach customers homes. As with FTTC, the top speeds possible on a G.fast line depend greatly on the length of that final copper loop

A spokesperson for CityFibre added: “Ofcom also recognises that at a technological level, BT’s continued strategic reliance on and investment in copper-based infrastructure – often masquerading as fibre – is inadequate to meet the soaring demand driven by new services and increased usage habits that the market continues to observe.
 
“With major metro fibre networks in 36 UK towns and cities as well as our York project rolling out fibre to the home with Sky and TalkTalk, CityFibre is the only wholesale competitor to Openreach.” 

Fellow FTTP-only provider Hyperoptic has been more positive about Ofcom’s early findings, hinting that it might start offering its own gigabit broadband services via the Openreach network. Hyperoptic’s spokesperson said: 

“Hyperoptic, the UK’s leading 1Gbps provider, welcomes Ofcom’s decision to force Openreach to properly open its duct and pole network to allow other operators to rollout competing infrastructure services. Having already trialled using those ducts to offer our 1Gbps service, we will be able to reliably and affordably offer our market leading 1Gbps service to even more consumers.

“We also advise Ofcom to ensure that all customers of Openreach have a voice in future network decisions and not just those that resell the plain old vanilla FTTC services – it is those that are truly innovating that offer the UK the best chance at a digital future.”

Fibre to the ‘burbs

Hyperoptic’s services are already available in over 100,000 premises and it’s got lofty ambitions of having half a million paying customers by 2018. Hyperoptic tends to target new builds and large blocks of luxury apartments in big cities, so it’d be something of a game changer if it started bringing its gigabit wares to the suburbs. 

Given that it no longer sells Internet services through Openreach, it’s perhaps not surprising that Virgin Media’s CEO Tom Mockridge is happy that Ofcom’s not calling for BT to have its network arm lopped off.

Mockridge said: “The best way to provide competition against BT and its inherited advantages is to support infrastructure investors like Virgin Media. 

Related: Lightning Strikes – Virgin Media’s network expansion project nabs 99,000 cable customers“We are challenging the incumbent with £3bn of investment in new network and providing choice. Ofcom has done the right thing by resisting separating Openreach, which would have sent a negative signal to infrastructure investors.”

Given that other ISPs with deep pockets are happy to spend similar amounts of money on things like Premier League football rights, Mockridge’s comments could be interpreted at a subtle dig at the competition. Then again, Virgin Media’s been busy raising complaints with Ofcom about how said TV rights are sold, suggesting that if it had the chance to bid for some games it too may dip into its wallet. 

In the meantime, it’ll be a while before anything concrete on Openreach is announced – Ofcom says it’ll fully detail its plans ‘later this year.’

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