BT claims proposals over Openreach could stunt investment and cause further imbalance
Ofcom will force BT to give rival carriers access to its fibre networks under proposals announced on May 15.
Providers with their own fibre network, such as BT, Virgin, and CityFibre, will be made to give competitors physical access to “dark fibre” networks, giving them direct control of the connection.
Broadband providers will be asked to take part in a consultation which will run until the end of July, with the new rules not coming in force until April 2017, Ofcom stated.
The regulator made the decision as part of its three-yearly review into the telecoms industry. The last review, held in 2012, found that giving dark fibre access was unnecessary but Mobile News understand that a wealth of new players, along with the introduction of 4G services, led to a change in mindset.
Ofcom said the decision had been made to help promote competition and innovation in the £2 billion market for “leased lines” – high-speed data links used to transfer data.
“Dark fibre” is a term-used because the fibre-optic cables would not be ‘lit’ (a reference to light used in fibre-optic technology) by BT but by the competitor, who would install its own equipment at either end of the cable.
BT would also still continue to provide wholesale leased line products, which bundle fibre-optic cable and BT’s equipment, at regulated prices under the new guidelines.
Ofcom competition group director Jonathan Oxley said: “High-speed, fibre optic leased lines are invisible to most people. But they form a critical building block in the UK’s infrastructure that underpins people’s personal and working lives.
“Today’s proposals should help businesses across the UK who rely on high-speed data lines. We want to see more innovation, faster installations and more competition, by providing operators with the opportunity to deploy the technologies of their choice.”
BT has warned that the proposals could slow investment in fibre infrastructure by making the service more complex, whilst also increasing costs.
A BT spokesperson said: “Openreach’s current offer creates a level playing field and a vibrant, competitive market with hundreds of competing companies, large and small.
“Mandating dark fibre risks favouring a few companies that have the greatest capability to deploy it, to the disadvantage of all other firms.
“It will undermine investment – as a number of service providers have warned – and it would also increase costs, divert resources and add more complexity just when we’re beginning to make progress on improving service.”
Another infrastructure provider who may be impacted by the proposals is CityFibre, who provides dark fibre solutions to mobile operators include EE and Three.
CityFibre chief executive Greg Mesch welcomed the proposals but warned Ofcom not to punish smaller providers while implementing them.
“Dark fibre has been validated worldwide as the only infrastructure platform to deliver cost-effective, future-proof digital connectivity fit for purpose in the decades to come,” he added.
“Ofcom has made clear the need to balance investment, innovation and competition in the UK telecoms infrastructure and services space. In the process we’ve seen demand grow, which is evident in our plans to commit investment to dozens of new cities in the coming years
“While CityFibre welcomes Ofcom’s decision as a clear validation of our business model, we urge it in the strongest possible terms to ensure that any future approach to pricing in no way distorts the market or discourages investment by independent infrastructure builders.
“The task of redressing the legacy of decades of underinvestment in the UK for fibre infrastructure is too large and important to be left to solely one monopoly provider, and the role of smaller, entrepreneurial players must not be underestimated or undervalued. It is essential that a pro-investment environment, which preserves supplier diversity and encourages network competition, be established and safeguarded for decades to come.
Under the new proposals, Openreach will also face new deadlines designed to help businesses get online quicker.
The new, minimum quality of service requirements would mean the time between when a customer first orders a new line and when the line is active would fall from an average of 46 days to 40, the same level it was at in 2011.
According to Ofcom, Openreach completed installation on only half of leased lines by the date it had promised. The regulator is proposing a mandatory completion target of 80 per cent by 2016, which rises to 90 per cent by 2018.