BT could be forced to open up more of its business broadband network to rivals if new regulations are approved
BT could be forced to open up more of its business broadband infrastructure to competitors, if Ofcom proposals to provide third party communications providers with access to dark fibre on the Openreach network come into effect.
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’s plans, part of its Business Connectivity Market Review, would give the likes of TalkTalk and Sky greater access to Openreach’s physical infrastructure and allow them to “light up” leased lines using their own equipment.
Light me up
The regulator claims this will promote competition and innovation in the business broadband sector, reducing prices for customers. London, including the City and Docklands, is not covered by the proposals as Ofcom believes there is already sufficient competition in the sector.
Ofcom has also proposed new service targets for Openreach, saying it is concerned it takes the company too long to install new lines and frequently misses promised completion dates.
The regulator says since 2011, the average time taken between a new order and a line being ready has increased from 40 to 46 days, a trend Ofcom wants to see reversed by 2017. Openreach would also have to complete 80 percent of installations by its promised completion date by 2018 and 90 percent by 2019.
It’s not all bad news for BT however. Ofcom also plans to relax rules requiring BT to offer low-bandwdith leased lines using technology from the 1980s and offering speeds of 2Mbps. Such ‘analogue’ lines are still used by a number of organisations, but BT would be able to stop accepting new orders from 2016 and be allowed to transition all lines to more modern infrastructure by 2020.
“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,” said Jonathan Oxley, Ofcom competition group director. “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.”
The proposals are subject to a consultation, which closes at the end of July, with a final decision published in early 2016 and the new rules taking effect in April 2006. If the dark fibre regulations are passed, BT would be required to for publish a ‘draft reference offer’ for the industry containing wholesale pricing and terms.
This would then be negotiated between BT and other providers but if no agreement was reached, Ofcom could intervene. It is expected that the new regulations would come into effect by April 2017.
The proposals have been welcomed by BT’s competitors, many of whom claim BT’s dominant position has given it an unfair advantage and that its poor record in repairing faults to the network stifles innovation.
“It’s good to see that Ofcom is taking regulation of the business telecoms market seriously. For too long BT has been able to get away with delivering poor service to Britain’s businesses at inflated prices and these recommendations will help drive competition into the commercial market and improve the service they receive,” said a TalkTalk spokesperson. “While we welcome the proposal that BT must give competitors access to dark fibre, it will be vital that the pricing is set at the right levels to encourage take up and ensure that Britain realises its potential to be the world’s leading digital economy.”
BT had not responded to TechWeekEurope’s requests for comment at the time of publication but has previously opposed such moves. Earlier this year it warned Ofcom that any change in regulation would reduce returns on existing investments and remove any incentive to spend more money on their networks. It also argued that allowing more people to access the physical network to conduct repairs would actually cause more service faults.
Last week, Openreach CEO Joe Garner said any such proposals regarding dark fibre would distort the market.
“On dark fibre there is a real risk it would un-level what is a level playing field today,” he said. “I could very well understand why the larger, well-resourced communications providers that have the ability to develop the boxes and all the supporting infrastructure might like the idea of dark fibre, but what would it do to the other end of our 530 communications providers and their capabilities. Will it not favour of the big guys in favour of the smaller players?”
Analysts suggest the move would satisfy both enterprise customers and mobile operators concerned about the impact of BT’s pending £12.5 billion takeover of EE.
“For many years now there have been calls for Ofcom to force BT to offer a dark fibre product. Today those calls have been answered,” said Matthew Howett, practice leader, regulation at Ovum. “Vodafone, for example, has been particularly vocal about the need for a dark fibre product to connect base stations and backhaul mobile traffic without fear of interference from BT.
“Elsewhere in Europe, a requirement for dark fibre is fairly common. According to recent Ovum research, around half of the 28 member states already have a requirement in place – along with countries in Asia such as Japan, Singapore and South Korea.”
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