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ShareOfcom gets bullish with Openreach

Building on last month’s Strategic Review of Digital Communications wherein BT was reprieved of a full split from Openreach, Ofcom has today published its draft Business Connectivity Market Review of the £2bn Leased Lines market. The findings mean that BT will be forced to open its Dark Fibre to competitors by October 2017 as well as fixing faults within 5 hours, reducing the average install time to 40 days (which hasn’t been achieved since 2011) and lowering wholesale prices, with the aim of making this premier connectivity solution more affordable to businesses across the country.

Although the proposals are yet to be ratified by the European Commission (Ofcom is expected to confirm its position next month), many are applauding Ofcom for taking a harder line with BT. The telco, on the other hand, isn’t quite so happy – particularly about having to share its Dark Fibre. BT said “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 statement about increasing competition at the infrastructure level. It is a cherry picker’s charter benefiting those who don’t invest in networks at the expense of those who do including BT, Virgin, CityFibre and Zayo.” Miaow, saucer of milk to table Patterson. While we understand that BT will want to protect their very expensive assets, we have no sympathy given that BT have made it nigh on impossible for others to build their own networks (see our previous comment regarding access to Openreach’s ducts and poles).

So what do we think of the proposals?

Of course we welcome tougher service standards for Openreach – we’ve spoken at length about the inadequate service they provide and feel this is a step in the right direction. A sizeable portion of our business is based on leased lines so we understand the complexity of delivering services; but ultimately we – and our customers – experience issues and delays on a daily basis. The service levels delivered and delays caused by Openreach (regardless of third-party factors) can be difficult – if not impossible – to justify or explain. As such we would be happy to see a return to better days with stringently monitored targets for installation and repair. Ideally this should be the starting point and we’d hope to see the targets set by Ofcom improve even more over time to a point where comms providers and customers alike can rely on Openreach’s performance to deliver the service to help businesses plan their communications strategies.

On the issue of price reduction and access to Dark Fibre however, we have some concerns…

Access to BT’s infrastructure is surely a good thing! However we’d like to see more competition and diversity at the infrastructure level – only then will Openreach be driven to perform better and to become more effective. Simply giving competitors physical access to BT’s Dark Fibre isn’t the answer. As we’ve previously stated, we’d like to see competitors get access to ducts and poles at a reasonable cost (as stated in Ofcom’s Strategic Review). This will help to build better fibre networks, with more resilient and diverse options for businesses across the country. Building competing networks allows CPs to provide truly carrier independent solutions, offering 100% service guarantees – then we will have the infrastructure fit for the business market! To this end we urge Ofcom to tackle the issue of access rather than just giving away BT’s assets.

In relation to costs, we’re all happy to get lower pricing – but is this really going to help BT deliver the necessary service and infrastructure improvements? In addition it will further commoditise the provision of these services and will prevent CPs from building technically innovative and customer-centric solutions as customers will just be able to opt for the cheap and cheerful option. Ultimately whilst the impact to BT may not be financially that great, it may inevitably further squeeze margins for providers, driving some out of business and once again reducing competition. And as we all know, a good level of competition is necessary for all to drive improvements in order to create the best possible experience for end users.

Have your say

Are we starting to see Ofcom take a harder stance against BT’s market dominance or is it too early to tell? Do you welcome this approach or do you think there’s still more to be done? Whatever your view share it with us in the comments section below.

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