Ofcom on Friday proposed making BT grant rival service providers access to its fibre networks in a bid to boost competition in the leased lines market.
The announcement was cheered by alternative operators, while BT claimed the proposed rule will actually have the effect of undermining competition. The proposal is also likely to go some way to assuaging mobile operators concerned about BT’s acquisition of EE.
As part of its Business Connectivity Market Review (BCMR), Ofcom wants BT’s competitors to have physical access to its fibre optic cables, giving them direct control of the connection. This would allow them to install their own equipment at each end of the connection and to offer tailored, high-speed data links to business customers, and mobile and broadband operator customers. Ofcom hopes to have the new regulation in place by April 2017.
The telco watchdog has also proposed new minimum quality of service requirements aimed at improving how BT’s infrastructure arm Openreach installs leased lines.
According to Ofcom, the average time between a customer ordering a line and it being ready for service has increased from 40 to 46 working days since 2011. Under the proposed rule, Openreach would be required to reduce its average installation time to 40 working days by 2017, and maintain it thereafter.
Ofcom also noted that last year, Openreach only completed approximately half of leased line installations on the initial date promised to the customer. As such, it has proposed another rule requiring Openreach to meet its deadlines in 80% of installations by 2016, increasing to 90% by 2018.
"Today’s proposals should help businesses across the U.K. who rely on high-speed data lines," said Jonathan Oxley, director of Ofcom’s competition group, in a statement. "We want to see more innovation, faster installations and more competition, by providing operators with the opportunity to deploy the technologies of their choice."
However, BT insisted that the current system, under which BT offers wholesale leased lines along with its own network equipment to rival service providers at regulated prices, is working well and does not require further intervention from Ofcom.
"Mandating dark fibre risks favouring a few companies that have the gre atest capability to deploy it, to the disadvantage of all other firms," the telco claimed, warning that it will also "increase costs, divert resources and add more complexity just when we’re beginning to make progress on improving service."
Unsurprisingly, alternative operators see it differently to BT.
"CityFibre welcomes Ofcom’s proposal," said CityFibre CEO Greg Mesch, in a statement. Over the last three years, CityFibre has been rolling out and lighting up fibre networks in a number of U.K. cities, providing dark fibre access to broadband providers.
It recently completed the first phase of its fibre-to-the-premises (FTTP) network in York, and has begun deploying infrastructure in Aberdeen.
"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. As one of the U.K.’s largest independent suppliers of fibre infrastructure, CityFibre has long championed making dark fibre widely available in the U.K., placing it at the core of our Gigabit City projects in York, Peterborough, Coventry, Aberdeen and Edinburgh," said Mesch.
"Up until now, alternative connectivity providers haven’t been able to roll out new superfast fibre using the incumbent’s passive infrastructure, so businesses are struggling with outdated, slow connectivity, which is holding them back," added Barney Lane, director of regulation at Colt. "Ofcom’s ruling is an important step in the right direction. It will help spur innovation and incentivise connectivity providers like Colt to rollout new services."
Ofcom’s proposal also has particular significance for the mobile market.
This is because BT’s fibre network currently provides backhaul connectivity to all U.K. mobile operators, but BT is in the process of acquiring EE, making it a direct competitor to O2, Vodafone and 3UK.
"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," noted Matt Howett, practice leader, regulation, at Ovum.
"As well as satisfying the demands of large enterprise users, today’s announcement is also set to partially reassure U.K. mobile operators should BT successfully acquire EE later this year," he said.
Friday’s announcement from Ofcom was not entirely about wielding a stick though; it dangled a carrot too.
Ofcom has proposed lifting supply and pricing requirements on all but the oldest of BT’s leased line services in central London because competition has been deemed sufficient. The regulator has also proposed lifting rules that apply to low-bandwidth leased lines, which BT plans to withdraw by 2020 anyway.
Friday’s proposals are subject to a consultation, which will close on 31 July. Ofcom aims to publish its final decisions in the first quarter 2016, and the rules would take effect in April 2016.
Once that happens, BT will be required to publish a draft reference offer in which it sets out pricing, and terms and conditions for wholesale dark fibre access. These will then be negotiated between BT and other service providers with a view to BT publishing a final reference offer by the end of 2016.
Dark fibre access would then be made available to telcos from April 2017.
