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New Ofcom UK full fibre measures to increase investment, lower build costs

UK communications regulator, Ofcom has published a set of measures that aim to increase investment in full fibre broadband networks and lower the upfront building costs. The draft has been submitted to the European Commission for comment, and a final statement is due to be published in March 2018.

The move follows a number of commitments from broadband companies that could see up to six million UK premises covered by full fibre by 2020 (see Hyperoptic secures £100M to accelerate UK fibre roll-out; Vodafone-CityFibre deal could shake up British broadband and TalkTalk in discussions for UK FTTP roll out).

The draft decisions follow Ofcom’s Wholesale Local Access market review, which sets how much Openreach can charge telecoms providers for selling superfast broadband services over its network. They cover the period April 2018 to March 2021. Amongst the draft measures, the regulator revealed that it will not regulate the prices of BT’s network division, Openreach’s fastest wholesale superfast broadband products, which, says Ofcom, ‘supports the incentives for operators to build full-fibre networks.’ The price of Openreach’s basic superfast broadband service, however, will be regulated for telecoms companies, allowing rivals to compete for customers, while several build out their own full-fibre networks, as well as protect consumers from high prices during this period.

In addition, the proposals state that BT must make its telegraph poles and underground tunnels available to rival providers so that they can more easily build their own full-fibre networks directly to UK households. Some providers such as Virgin Media and CityFibre are already taking advantage of this measure, which is designed to fundamentally change the business case for building new networks, cutting the upfront costs of laying fibre cables and reducing the time required for digging works.

BT’s network division, Openreach, recently pledged to bring high-speed broadband to three million UK premises by the end of 2020 as part of its newly launched 'fibre first' programme (see Openreach fibre first to ‘fire the starting pistol’ on major infrastructure upgrade). Under Ofcom’s proposals, the company must repair any faulty infrastructure and clear blocked tunnels where necessary so providers to access them. Space must be made available on its telegraph poles for extra fibre cables connecting homes to a competitor’s network and the incumbent must release a ‘digital map’ of its duct and pole network, so competitors can plan where to lay fibre.

Jonathan Oxley, Ofcom’s competition group director, said of the draft plans: ‘The measures we’ve set out today will support the growing number of companies who have already announced plans to build full-fibre networks, and open the way for even more ambitious investment around the UK.’

While customers are gradually moved to full-fibre broadband, Ofcom also states that it wants Openreach to install new lines on its existing network, and fix faults, more quickly, with a requirement that it: completes at least 88 per cent of fault repairs within one or two working days of being notified, up from 80 per cent; completes at least 97 per cent of repairs within seven working days; provides an appointment for 90 per cent of new line installations within 10 working days of being notified, compared to 80 per cent within 12 days currently; and installs 95 per cent of connections on the date agreed between Openreach and the telecoms provider, up from 90 per cent. These new requirements must be met by 2020/21 and the regulator says it will step in if these mandated standards are not met.

Dana Tobak, CEO, Hyperoptic has responded to the announcement, saying: ‘We welcome the news of Ofcom's draft statement on the Wholesale Local Access market. In particular its recommendations for supporting investment in full fibre network build by limiting the lowering prices on the 40Mb FTTC product, allowing mixed use for duct and pole access which will allow infrastructure builders to create stronger business cases for more investment and ensuring equivalence of inputs with respect to BT's own use of DPA. 

‘Of course, the details matter, and matter significantly, so final implementation of the statement needs to follow in both spirit and operational processes. We look forward to Openreach's publication of a reference offer, which fully matches or exceeds Ofcom's statement, given its independence from the BT Group. This will ultimately create a better digital future for the UK, not just serve the interests of BT retail.’

CityFibre has also issued a statement in response to the announcement, which said: 'We are pleased that Ofcom has recognised the need for a healthy competitive landscape in building full-fibre across Britain, recognising that alternative providers such as CityFibre are now taking the lead.  Overall we believe Ofcom has taken a balanced approach, and we welcome the improvements to duct and pole access and the inclusion of some protections against potential anti-competitive tactics from Openreach. It's a step in the right direction.'



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