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Summary

On Dec. 6, 2016, UK regulator Ofcom published initial plans to improve the process operators follow for building ultrafast broadband networks using BT’s ducts and poles. Duct and pole access (DPA) was first introduced in the UK in 2010, though take-up has been limited. Ofcom’s reforms are aimed at ensuring that the regulator’s vision of large-scale competing ultrafast broadband networks is achieved. The new plans are under consultation until Jan. 31, 2017 and will form part of the remedies imposed on BT to address competition concerns in the wholesale local access market, which is scheduled for review in early 2017.

Duct and pole access reforms intended to address the concerns of alternative operators and improve take-up

The existing PIA obligation on BT already ensures that rivals are provided with access at cost-oriented prices to all underground ducts and telegraph poles to deploy their own fiber cables directly to homes. Ofcom’s reforms are aimed at simplifying this process. They are expected to address many of the concerns that alternative providers have had about the cost and timescales involved in PIA, which have limited take-up of the offer.

With nearly half of UK homes connected to the network by a drop wire from a telegraph pole, competitors sometimes find it challenging to deploy their own fiber in BT’s copper poles, which suffer from limited space and load constraints. Consequently, Ofcom is exploring whether to require Openreach to upgrade its drop wires with fiber at the request of any alternative providers wanting to deploy full-fiber broadband. The proposals also include changes that mean BT would recover the costs of providing access, for example for repairing ducts, by spreading them across all services using the duct, which is the same approach it uses to recover costs for its own deployments. In addition, the regulator is considering introducing a cap on Openreach’s duct-access rental charges to provide greater planning certainty for providers. BT would also be required to streamline and align the site survey process for competitors with its own survey requirements, including issuing SLAs and guarantees. Finally, Ofcom is seeking input on the possibility of relaxing PIA usage rules to allow not only access for consumer and SME services but also leased-line products.

A number of process changes are already being implemented by BT following the 2016 Digital Communications Review, such as building a national database that shows competitors where they can lay their own cables, to be launched in mid-2017. Openreach is also trialing allowing companies to install distribution joints inside its junction boxes and carrying out work themselves without permission. The combination of Ofcom’s reforms, existing Openreach initiatives, and government incentives such as simplified planning rules and 100% business-tax relief until 2022, should considerably streamline the DPA process and thereby encourage take-up by alternative operators.

Although the UK has superfast broadband coverage of 83%, higher than the other EU5 countries – Germany, France, Italy, and Spain – it has achieved so-called full-fiber coverage of only 2%. By comparison, Portugal and Spain have full-fiber coverage figures of 70% and 79%, respectively. Both countries have seen extensive take-up of their DPA offers, which has played an integral role in enabling alternative operators to deploy their own fiber networks and achieve high coverage levels. By encouraging more providers in the UK to use the DPA offer, investment in areas not served by existing networks will hopefully increase.

Appendix

Further reading

Regulating Duct and Pole Access,TE0007-001070 (November 2016)

UK (Country Regulation Overview), TE0007-000949 (October 2015)

Author

Sarah McBride, Analyst, Regulation

sarah.mcbride@ovum.com

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