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Ofcom review of Wholesale Line/Broadband Access
Tuesday 23 March 2010 13:33:48 by John Hunt

Ofcom have today announced two consultations which look at the state of competition within the Wholesale Line Access (WLA) and the Wholesale Broadband Access (WBA) markets.

The WBA review mainly examines the current broadband field which is separated into 4 markets based on availability of providers at a telephone exchange within that area. The Hull area is deemed a separate market due to its separation from the BT network. Market 1 is the area with no prospect of wholesale competition so only BT provide wholesale services from that exchange. Ofcom are proposing that in this area a charge control is imposed that requires prices to be based on costs, with an obligation to provide transparency of cost data. A separate consultation will detail the charge controls later in 2010. A similar proposal is being put forward for Market 2 which will see freedom within a pricing range based on costs. Market 3 covers areas with competition between 4 or more operators, and no operator holds a significant market power in this area. No pricing controls are suggested in this area.

The WBA review also looks to define, for Ofcom's purpose at least, that super-fast broadband covers speeds greater than 24Mbit/s. This would therefore include BT's fibre-to-the-cabinet based services and aims squarely at what has so far been termed next-generation access (NGA).

The more interesting stuff is within the WLA consultation which proposes two new wholesale products must be provided by BT. The first, deemed 'VULA' is Virtual Unbundled Local Access which provides a virtual connection to link a user back to a communications provider (CP) in the exchange over BT's next generation FTTC or FTTP networks. The CP would effectively be buying the local access segment which would offer an Ethernet connection to the end user with an active NTE provided by BT. The CP would be offered some control of the NTE to ensure that they aren't unnecessarily prevented or limited in their ability to offered different and innovative products. Pricing would be set by BT as Ofcom believe price regulation could risk stifling investment. VULA would largely be based on BT's current Generic Ethernet Access (GEA) product that is available in both a FTTC and FTTP variant.

The second product, Physical Infrastructure Access (PIA) will allow CP's to deploy fibre to the access network using BT's duct and pole network so that they could provider either FTTP or FTTC based services. Ofcom estimate that deploying the passive infrastructure based around ducts and poles to deploy next-generation access accounts for around 50-70%, and the network that BT inherited as the incumbent operator gives it a significant competitive advantage. Ofcoms surveys indicate that there is a significant amount of unoccupied space within the ducts, but it is unclear how this would translate into usable capacity, particularly with respect to poles. Where capacity isn't available, Ofcom believe that BT should be required to relieve congestion, but at the cost of the requesting CP. BT would be required to introduce this 3months after the market review policy statement has been published, with a view to launching the service 8months after this.

BT had earlier this year announced that they would be proceeding with PIA, but have also called for equality with competitors ducts to be opened up in a similar way. The Ofcom report does not make any mention of requiring other operators to do this, but it's likely that BT will continue to put pressure towards this goal.

Comments

Posted by cyberdoyle over 7 years ago
I think this may move along the roll out in urban, but won't do much for rural because the hidden charges (small print) will probably mean it is cheaper to start afresh and dig your own. BT is determined to protect the copper cabal for another few decades and will not cheerfully hand over to other companies the opportunity for innovation, thus killing their copper offering and their sadly sick golden goose.
Posted by Somerset over 7 years ago
Chris - what do you expect BT to do? What's the cost of digging your own (under roads), putting up poles, getting wayleaves etc.

I see you don't usually answer questions!
Posted by CARPETBURN over 7 years ago
The article is contradictory in many areas an example is in one breath...
quote"Ofcom estimate that deploying the passive infrastructure based around ducts and poles to deploy next-generation access accounts for around 50-70%, and the network that BT inherited as the incumbent operator gives it a significant competitive advantage."
The next...
quote"Ofcom believe that BT should be required to relieve congestion, but at the cost of the requesting CP."

So BT control everything but others have to pay for it? No damn change there then.
Posted by otester over 7 years ago
If VULA == unmetered 40Mbps
{
Me == Happy;
};
Posted by herdwick over 7 years ago
GEA does unmetered 40M now.

If you want control Carpetbum, build or buy your own.
Posted by chrysalis over 7 years ago
are these reviews every year? they not long ago setup the different market 1,2,3 stuff. Are ofcom going to shy away from making VM open ducts?
Posted by CARPETBURN over 7 years ago
quote"If you want control Carpetbum, build or buy your own."

Why should i have to when a regulator now freely admits BT has an advantage over others and freely admits they will let it continue..... What do ofcom regulate?
Posted by systemx over 7 years ago
If Dave and the Tories get in next time they may not be an OFCOM for much longer. Bloody good.
Posted by GMAN99 over 7 years ago
More copper obsession from Mr Doyle :) Why do you keep saying they want to protect and keep it? The upkeep of copper must be much more than fibre, I'm sure they want shut of it. I would have thought by now you'd have realised BT won't be putting new infrastructure in your village any time soon, so.. time to move on.. or just.. move.
Posted by GMAN99 over 7 years ago
As for the article it sounds good to me, I've only skimmed but it looks like BT must offer a FTTP service using their ducts and poles to other ISP's. That is all good no matter how you look at it.
Posted by dch3dwj over 7 years ago
@systemx: I've heard a lot of complaining about Ofcom. What's the problem? I mean they unbundled and functionally separated BT... I'm not trying to be sarcastic or anything I'd genuinley like to know..
Posted by dch3dwj over 7 years ago
@GMAN BT can't shut off the copper network even if they lay a fibre one. It is legislated that telephone lines cannot be interrupted by power cuts consequently they'd have to maintain the copper network for telephone calls.

I know BT are testing some battery backed up fibre telephone systems but there would have to be a change in the law to allow them to withdraw the copper telephone service.

So no they can't withdraw copper - they could stop offering DSL broadband but they'd still need to maintain the network for phone calls.
Posted by dch3dwj over 7 years ago
@Carpetburn: How would you handle BT (or more specifically Openreach)? I'm just curious would you renationalise them? Force the sale of their network assets, but then to whom? And wouldn't that just create local monopolies?
Posted by GMAN99 over 7 years ago
They'd still want shut of it though that's my point, whether they are allowed is another matter sure.
Posted by dch3dwj over 7 years ago
Yeah I known GMAN I was just making the point that this represents yet another Government imposed barrier to investment.
Posted by dch3dwj over 7 years ago
Incidentally, I agree fibre will probably be cheaper to maintain than copper. There will be no burn outs, cable fires or chavs nicking the copper. I

I suppose it will cost more if someone smashes a car into a telecoms cabinet or slices through a cable as you can't just splice it back together.
Posted by GMAN99 over 7 years ago
Got ya, but its a fair point I mean we must ensure contact to emergency services are kept going. Going forward it would be good to provide some better grade copper along with the FTTP just to power the phone, PoE but only for that purpose
Posted by dch3dwj over 7 years ago
The Government's Smart Meter scheme is going to fund the development of a low capacity communications network. It seems to me it would make more sense just to invest that huge pot of money in copper upgrades. That would ensure a secure low for smart metering, a telephone network and, possibly, and, possibly, low cost alternative to FTTP broadband for low income groups (although the latter would damage the business case for FTTP).
Posted by Somerset over 7 years ago
GMAN99 - The idea is not to have copper. Home boxes will have a small battery.
Posted by CARPETBURN over 7 years ago
quote"@Carpetburn: How would you handle BT (or more specifically Openreach)? I'm just curious would you renationalise them? Force the sale of their network assets, but then to whom? And wouldn't that just create local monopolies?"

Ive explained on other stories how i think fibre roll out with tax payers money should be done.
Posted by dch3dwj over 7 years ago
Somerset: That's true but the test rigs are about the size of a boiler at the moment (I'm sure they'll get smaller). Also it will significantly add to the expense. How do you compel people who don't want FTTP to make the transition bearing in mind it will use electricity to run the homebox.
Posted by dch3dwj over 7 years ago
"Ive explained on other stories how i think fibre roll out with tax payers money should be done."

Oh right, sorry I spoke.
Posted by ElBobbo over 7 years ago
dch3dwj - BT certainly do know the exact numbers they'd save in maintenance, and it's massive.

Also, you can just splice fibre back together. You can do it very quickly with a mechanical splice if you need to, otherwise the most common method is fusion splicing (heating the two ends to fuse them together).
Either method will result in a minimal insertion/reflection losses but arc fusion splicing is very effective (usually 1dB or less).
Posted by GMAN99 over 7 years ago
Hmmm not sure the onus of keeping power to vital services should be left to the customer via a UPS (if that is what this homebox device is)
Posted by dch3dwj over 7 years ago
ElBobbo: Thanks for the info re splicing I thought it was essentially impossible to do in a consistent manner I stand corrected.

GMAN: It depends on how long the UPS would last I imagine if there were widespread power outages across the UK for any length of time we'd lose the conventional phone network anyway. But how long is long enough?
Posted by GMAN99 over 7 years ago
Well in my life time I've never known a widespread power outage to cause the phone network to fail, I do however know I get a power outage at my current home at least twice a year. Personally I think its for the either the telco or electricity co to supply and maintain any battery backup as its their service that needs to be maintained/lacking in up time. Even better if its off site... a small cab on the street somewhere, they could trial it in St Albans ;o)
Posted by themanstan over 7 years ago
quote "Incidentally, I agree fibre will probably be cheaper to maintain than copper. There will be no burn outs, cable fires or chavs nicking the copper"
Unfortunately, chavs not being that bright have been nicking fibre from VM thinking it was copper. Leeds most recently i think!!!
Posted by Somerset over 7 years ago
The battery lasts 4 hours.
Posted by cyberdoyle over 7 years ago
Hi Somerset, I usually do answer questions but sometimes lose track of all the blogs where they might ask me a question. The answer to yours is as BT are the incumbent wholesale providers via openretch they should just replace the copper with fibre instead of protecting the copper to pay back the £9billion pension deficit.
Posted by KarlAustin over 7 years ago
Well legally they can't get rid of the copper - so if they dump all other services than phone from the copper then logically the cost of the line and calls has to go up to cover the massive maintenance bills, because there's no other service contributing.

Also where do you suppose BT get the money from to fix their pension black hole? If they go out of business then we, the tax payers have to meet it, with nothing to show for it - so surely it's far better that BT plug that hole commercially and the end user have something to show for it i.e. a product/service?
Posted by Somerset over 7 years ago
CD - what should happen to the pension deficit?
Posted by GMAN99 over 7 years ago
"So BT control everything but others have to pay for it? No damn change there then. " its their own property? Are you saying they shouldn't own and charge for usage? Of course they should. I think its a great move.
Posted by CARPETBURN over 7 years ago
If Ofcom believe BT have "significant competitive advantage" and its down to others paying BT that needs to stop. That is a monopoly a monpoly in a legal sense is...
'exclusive control of a particular market that is marked by the power to control prices and exclude competition and that esp. is developed willfully rather than as the result of superior products or skill'
Ofcom are supposed to make sure that does not occur, and the industry is fair and competitive.
Posted by CARPETBURN over 7 years ago
If you believe that is right GMAN99 and a 'great move' i can only assume you think law breaking is fine and good. I wonder if you would think it was great if you were financially raped by an organisation also.
Posted by Somerset over 7 years ago
Please explain.
Posted by GMAN99 over 7 years ago
CB this is no different from LLU surely?
Posted by CARPETBURN over 7 years ago
quote"CB this is no different from LLU surely?"

LLU companies have a monopoly do they??? Trying telling that to people that cant get LLU services.
Posted by rasczak over 7 years ago
GMAN99, I thought you would have noticed by now that Carpetburn has this obsession that BT should not allowed to charge any other provider anything and should give access to their exchanges and services for free. Of course if you suggest that he should give space and services from his "business" for free he is not so inclined.
Posted by rasczak over 7 years ago
Fair enough that there are maximum returns BT is allowed to make, but they should not have to subsidise the other providers to cherry pick.
Posted by andrew (Favicon staff member) over 7 years ago
This consultation is part of Ofcom's processes for assessing what is the correct way forward. There is little point in it forcing a direction, if none of the communcations providers feel it is the route to go.

Openreach was created as a way to create equivalence, would creating a nationalised loop provider make much difference?

It would just create a choice, and the price sensitive would plump for which ever was cheaper.
Posted by GMAN99 over 7 years ago
No CB you misinterpreted. I'm referring to this change being the same as when BT had to provide LLU. It was their property that they had to open up and charge for, same thing here isn't it?

@rasczak, yes I'm aware :)
Posted by CARPETBURN over 7 years ago
quote"No CB you misinterpreted. I'm referring to this change being the same as when BT had to provide LLU. It was their property that they had to open up and charge for, same thing here isn't it?"

LLU operators pay rent to BT so no it isnt the same.
Posted by CARPETBURN over 7 years ago
quote"GMAN99, I thought you would have noticed by now that Carpetburn has this obsession that BT should not allowed to charge any other provider anything and should give access to their exchanges and services for free. Of course if you suggest that he should give space and services from his "business" for free he is not so inclined."

My business doesnt have a monopoly over others.
Posted by GMAN99 over 7 years ago
But if it did you'd gladly give that space/services for free? Of course not
Posted by CARPETBURN over 7 years ago
quote"But if it did you'd gladly give that space/services for free? Of course not"

If i was a monopoly in the comms industry i would expect the law and Ofcom to step in and stop me raping others of their cash. As it is though that hasnt happened with BT which brings us back to my original post ^^^^ third down from the top.
Posted by GMAN99 over 7 years ago
But we don't know the charges yet do we? If they do charge crazy prices then fair play Ofcom need to up their game, but at the moment all Ofcom have said is they have to do it. I don't even think BT have responded yet have they?
Posted by CARPETBURN over 7 years ago
quote"But we don't know the charges yet do we?"
Thats an irrelevance, ISPs pay BT and now above it states...
"Pricing would be set by BT as Ofcom believe price regulation could risk stifling investment."

and

"Ofcom believe that BT should be required to relieve congestion, but at the cost of the requesting CP"

So now not only do others have to pay BT to use their network, they are expected to fund BT to fix it.

MONOPOLY
Posted by CARPETBURN over 7 years ago
How about i sent you a bill when my company needs upgraded equipment GMAN99, im sure you will be happy to pay for it.
Posted by GMAN99 over 7 years ago
But what is wrong with the requesting CP footing the bill for relieving congestion? If there isn't any available access in a certain area and the CP wants some and BT have to rejig things to make it happen at cost, why would BT or any telco want to foot the bill. A lot of your points always come down to basic business practice. If the customer wants something the customer pays its as simple as that.
Posted by GMAN99 over 7 years ago
So if you owned a plot of land and o2 came along and said they wanted to put a mobile mast on it and the ideal location for it would be right in the centre of a derelict building that would have to come down, wouldn't you pass on the charges of that demolition to o2 because it was their need to do this not your own? Of course you would, you wouldn't foot the bill yourself
Posted by CARPETBURN over 7 years ago
quote"But what is wrong with the requesting CP footing the bill for relieving congestion? If there isn't any available access in a certain area and the CP wants some and BT have to rejig things to make it happen at cost, why would BT or any telco want to foot the bill. A lot of your points always come down to basic business practice. If the customer wants something the customer pays its as simple as that."

If BT dont have the capacity in the first place they shouldnt had sold to other ISPs should they.
Posted by CARPETBURN over 7 years ago
quote"So if you owned a plot of land and o2 came along and said they wanted to put a mobile mast on it and the ideal location for it would be right in the centre of a derelict building that would have to come down, wouldn't you pass on the charges of that demolition to o2 because it was their need to do this not your own? Of course you would, you wouldn't foot the bill yourself"

I wouldnt sell the the land in the first place if it meant additional cost for me...... The same way BT shouldnt sell bandwidth in the first place if additional charge are involved to provide it
Posted by GMAN99 over 7 years ago
You think they've a choice CB? They haven't... Ofcom are making them to do it, its Ofcom that are forcing them to create new service lines
Posted by Somerset over 7 years ago
'If BT dont have the capacity in the first place they shouldnt had sold to other ISPs should they.'

What do you mean? What if there is no spare capacity?
Posted by CARPETBURN over 7 years ago
Capacity of the BT fibre network if it becomes congested or as the story states "Ofcom believe that BT should be required to relieve congestion, but at the cost of the requesting CP"
Posted by GMAN99 over 7 years ago
Your reading things that don't exist. Capacity is in reference to ducts or poles, not within the core of the network its the last mile. - "Ofcoms surveys indicate that there is a significant amount of unoccupied space within the ducts, but it is unclear how this would translate into usable capacity, particularly with respect to poles"
Posted by CARPETBURN over 7 years ago
Sorry ive obviously confused you i was previously talking about capacity as in bandwidth but in reply to somerset im talking about Network capacity (i did clearly say 'fibre network' in reply to him... Ducts and Poles are part of the BT network are they not?
Posted by GMAN99 over 6 years ago
Ok well in that case (for me anyway) BT should resolve any congestion within the core at their cost as it would no doubt affect many, but if there is physical congestion in ducts and poles that requires work so that a new provider can put in a new connection the work around that should be funded by the requester
Posted by CARPETBURN over 6 years ago
quote"Ok well in that case (for me anyway) BT should resolve any congestion within the core at their cost as it would no doubt affect many, but if there is physical congestion in ducts and poles that requires work so that a new provider can put in a new connection the work around that should be funded by the requester "

Id agree if it then means the requester doesnt have to pay BT rental fees for equipment they paid for.
Posted by Raspyyeti over 6 years ago
Each fiber's capacity in the network is only limited by the chipsets in the routers at each end, that's why there is a big push for full fiber networked broadband.
Also IP Multiplexing helps to maximize the networks ability to handle heavy traffic.
BT's 21CN roll-out started at the exchanges and worked back to the new network cores, so we should see some improvements when users on BT's network move to 21CN fiber hower the fiber limit is currently 10Gbp/sec.
Ofcom should focus on the setting up of community non-profit ISP's on BT's network.
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