Ofcom outlines plans to force BT to open up access to fibre networks

18 May 2015

British telecoms regulator Ofcom has unveiled proposals under which those companies wishing to provide high speed telecoms lines to businesses would be granted access to fixed line incumbent BT’s fibre networks. With the watchdog saying the proposed measure is ‘designed to promote competition and innovation in the GBP2 billion (USD3.14 billion) market for leased lines’, it has outlined the plans as take-up of such connections continues to grow as consumers use more data on smartphones and tablets, and as companies shift larger amounts of information between locations to support sophisticated internet services.

In order to ensure that businesses have effective choice, and to encourage competition and innovation, Ofcom has proposed a new requirement for BT to supply ‘dark fibre’ in areas outside central London. As per the regulator’s suggestions, BT would be obligated to give rival companies access to its fibre-optic cables, allowing them to take direct control of the connection. BT already offers wholesale leased line products which bundle its fibre-optic cables with its own network equipment at regulated prices, and under these latest proposals the requirement to do so would continue.

Having made the proposals for dark fibre access as part of its ‘Business Connectivity Market Review’, Ofcom has also announced plans to introduce new minimum quality of service performance requirements for Openreach, the company which operates the physical assets of BT’s local access and backhaul networks. In so doing Ofcom said that it was concerned that Openreach ‘often takes too long to install leased lines, and too often changes the date on which it promises to deliver services’. According to the regulator, as per the first new quality of service rule Openreach would be required to reduce the average time between a customer’s order and the line being ready to 40 working days by 2017, down from the current average of 46 days and maintain it thereafter. Further, Ofcom has proposed a second rule which would oblige Openreach to meet the original installation dates it promises customers in 80% of cases by 2016, rising to 90% by 2018.

Meanwhile, Ofcom has proposed a deregulation in some areas of the leased line market, including lifting supply and pricing requirements on all but the oldest services in central London, where it says competition is now sufficient to make this unnecessary. In addition, the regulator is also looking to remove requirements on BT applying to very low-bandwidth leased lines, with BT wanting to cease accepting new orders in 2016, and complete the transition of remaining lines to higher-bandwidth alternatives by 2020. As the market moves to newer, more sustainable alternatives, Ofcom has proposed removing supply and pricing requirements on BT for very low-bandwidth networks.

With the proposals now subject to a consultation which closes on 31 July 2015, Ofcom has said it expects to publish its final decisions in the first quarter of 2016, with a view to the new regulation taking effect in April 2016. As part of the dark fibre proposals, Ofcom would require BT to publish a draft ‘reference offer’ for industry, containing wholesale pricing and terms for access, in mid-2016; this would be subject to negotiation between BT and other providers, with a view to BT publishing a final reference offer before the end of 2016. Dark fibre access would then be available to telecoms providers from April 2017.

United Kingdom, BT Group (incl. Openreach), Ofcom