In a recent u-turn following their latest Business Connectivity Market Review, Ofcom is proposing that ISPs offering leased lines be granted physical access to BTs ‘dark fibre’, something it disregarded during its previous review in 2012. So, should BT be forced to open up its dark fibre to competitors and how could it affect the industry?
What is dark fibre?
In simple terms, dark fibre is the ‘un-lit’ (unused) fibre optic lines that have already been implemented by a carrier to provide spare capacity for coping with future demand. By allowing access to this fibre, the competing Communications Provider can install its own equipment at either end, taking full charge of the solution on a wholesale basis.
The carriers that have invested in the implementation of this fibre to enhance their own networks and ensure future scalability are obviously upset by the recent proposals and argue that they should not be forced to provide competitor access to this ‘dark fibre’- after all, they are clearly trying to protect their investments.
A recent open letter sent by BT, Virgin Media and Kingston Communications warned Ofcom that such actions could lead to higher prices and “significant regulatory uncertainty, undermining the return on sunk investments and therefore dis-incentivising future infrastructure investments“. It also states that “allowing multiple operators to tamper with the physical network will cause service faults for customers“.
So, why does Ofcom think access should be granted?
Jonathan Oxley, Ofcom’s Competition Group Director, said: “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.”
Whilst we understand the carriers’ reluctance to provide access and their argument regarding their investment, in BT’s case at least, their infrastructure ‘investment’ has been hugely subsidised by Government funding in the form of the BDUK which raises questions over the ‘investment protection’ stance. Surely, if the infrastructure is partly funded by Government, it should be more widely accessible?
We do however echo concerns that third party ‘tampering’ could lead to an increase in faults and service interruptions for existing customers and believe this needs to be looked at carefully to ensure any potential negative impacts are minimised.
It’s still very early days in the consultation period which is due to run until the end of July, with further industry negotiations regarding access and pricing to follow. However, we believe that anything that further encourages and enables competition in this market will be good for the industry. How good will very much depend on the finer details of course. We are hopeful that this will enable CPs like Entanet to offer highly competitive fibre connections at wholesale rates with our own fully managed equipment on each end. However to work effectively, the price must be right and we foresee a long period of industry negotiation on that, potentially with further input from Ofcom.
Have your say!
Do you think carriers such as BT should be forced to open up access to their dark fibre? Do you think such actions will improve competition within this market? Or do you think BT should be able to protect its investment? Let us know your opinion by leaving us a comment below.
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