Ofcom’s business broadband review wants better competition, more innovation and cheaper prices
Ofcom has ordered BT to provide third party communications providers with access to Openreach’s dark fibre and to install and repair new leased lines much more rapidly than at present.
The plans are part of Ofcom’s Business Connectivity Market Review, which also proposes price controls for Openreach’s fibre and legacy business broadband connections.
The regulator claims the measures should result in better services, lower prices and more effective competition in the £2bn market for leased lines, which are used by mobile operators and large enterprises.
Currently, Openreach makes leased lines used by businesses and public sector organisations available to other companies on a wholesale basis, meaning the line and the equipment used to power the connection are bundled.
Ofcom wants to reduce the UK’s reliance on the Openreach network and believes that by giving the likes of Sky and TalkTalk direct control of the connection – and “lighting up” the dark fibre – innovation and competition in the business broadband would be stimulated.
London, including the City and Docklands, is not covered by the proposals as Ofcom believes there is already sufficient competition in the sector, and BT would still be required to offer wholesale leased line products as part of the proposals.
“We have outlined plans to reduce the country’s reliance on BT’s Openreach division,” said Jonathan Oxley, Ofcom Competition Group Director. “Our proposals on ‘dark fibre’ do just that, letting BT’s competitors better serve their customers by getting direct access to BT’s optical fibre cables.”
Ofcom’s parallel Strategic Review of Digital Communications, a once-in-a-decade review of the UK market, has already proposed making it easier for rivals to access Openreach’s ducts and poles in a bid to encourage the development of alternative infrastructure.
BT, along with Virgin Media, has previously opposed any move to give others greater access to their business broadband infrastructure, claiming it would remove any incentive to invest and could result in more faults as more people interact with the network.
Ofcom has also confirmed plans to impose new service targets on BT for the installation of leased lines. The regulator says Openreach is too slow at fixing faults and that the average date between a customer making an order and the line being installed has risen to 48 working days from 40 in 2011. Ofcom is also concerned that a quarter of installations are not completed by the first given date.
Its plans would require Openreach to install new lines within 46 working days by March 2017 and 40 by the following year. The company would also need to complete 80 percent of orders by the promised date by March 2017 and 90 percent by April 2018. Additionally, 94 percent of all faults must be fixed within five hours.
At present, around seven out of ten lines are installed by the agreed data and nine out of ten repairs are delivered at time.
Ofcom also says wholesale prices for leased lines will also come down over the next three years in a bid to reduce costs for businesses.
“We accept there is more to do on service and are committed to doing better and meeting our business customers’ rising expectations,” a BT spokesperson told TechWeekEurope. “Ethernet provision can be complex and the need for street works and wayleaves mean delays are often beyond our control. We are doing all we can to overcome such challenges. The required Ethernet price cuts and the introduction of dark fibre will not help to underpin service improvement.
“Dark fibre is a flawed piece of regulation that introduces an unnecessary layer of complexity and will deter others from building their own fibre networks. It is at odds with Ofcom’s recent statements about increasing competition at the infrastructure level. It is a cherry pickers’ charter benefiting those who don’t invest in networks at the expense of those who do including BT, Virgin Media, City Fibre and Zayo.”
Do they go far enough?
TalkTalk, one of the providers that might benefit from the new rules, believes Ofcom has made some good points but is concerned the proposals do not go far enough.
“We know from our customers that British businesses are crying out for better high speed data services, and so we welcome Ofcom’s focus on improving Openreach’s performance and the opening up of dark fibre,” said Charles Bligh.
“At first glance, these final proposals do not represent the “step change” in quality and service Ofcom called for in their own strategic review just a few weeks ago. We very much hope that we and our customers will see material improvements quickly, and that Ofcom maintains the pressure on Openreach to ensure they finally deliver the broadband businesses deserve.”
The government has promised its own review into the business broadband market, while only yesterday, Ofcom CEO Sharon White pledged to ensure the UK had 98 percent indoor 4G coverage to help small businesses.
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