Those companies looking to bid for the funding that is meant to ensure that 90% of UK households get access to superfast broadband by 2015 will now be able to work out the cost for access to Openreach ducts and poles. Access to this infrastructure that already connects almost every home in UK was crucial for many plans, with plenty of criticism that Openreach was over charging.
"I'm pleased to be able to bring down these prices. A lot of hard work has gone into revising them and we have ended up with prices that are up to 38 per cent below the European average. Other companies now have the certainty and low prices they need to build a business case and bid for BDUK funds.
No-one is keener than myself to bring superfast broadband to rural areas but it is an enormous challenge. These prices will hopefully unlock some much needed investment from others but we will have to wait and see. Openreach has largely bankrolled Broadband Britain by getting fibre to more than five million homes but it's time for others to help us with the heavy lifting."Openreach chief executive Liv Garfield
Some example prices are shown below, they are all based on a five year term, with the cost being an annual charge. The full BT press release is here.
The new pricing for pole and duct access have been published by Openreach, and while they are not Ofcom approved, Openreach has undertaken that if Ofcom, through its ongoing WLR/LLU charge consultation insist on lower pricing and a communications provider (CP) is bidding for BDUK (Broadband Delivery UK) funding, it would offer the lower pricing to that CP, rather than holding up the process by an appeal.
The prices are not as simple to understand as the pricing for LLU, mainly because factors such as number of metres of duct access required, how many poles will be shared need to be factored in. The Openreach website has a list of prices for October 2011, and an Ovum report on the costs has found that in rural areas the pricing is 38% below average in Europe, and 21% in urban areas.
Across a range of scenarios and allowing for a mix of assumptions, the UK is consistently below the EU average in some instances by up to 40 per cent
The headline results from the benchmarking of prices over a ten year period show that:
- In FTTP scenarios, charges incurred by communications providers (CPs) in the UK are between 15 per cent and 22 per cent below the European average
- In FTTC scenarios, charges incurred by CPs in the UK are between 17 per cent and 38 per cent below the European average
- The UK pricing for FTTC scenarios is the lowest in a remote rural area but similar to Portugal and Spain in a rural townOvum report on pole/duct access pricing
Based on the pricing announced today it does look like Openreach has laid its cards on the table and called for those that are critical of the BT group and its fibre roll-outs to step out of the woodwork and put forward realistic plans to meet the governments superfast broadband plans. The current level of funding from BDUK is generally very low per property, and for anything approaching superfast broadband, councils will be relying on communication providers providing some of the investment. Lets hope that these lower prices make that more likely and encourages the creation of a network that will work for another 20 to 30 years, rather than the usual short term view of two to three years.
"We had had to wait ten months only to find many of the crucial new build and ancillary charges remain unchanged or are even increased. Whilst today's revised pricing is a belated acknowledgement that certain basic charges were too high, there remains significant disparity between what BT is proposing and what industry knows the costs to carry out the work are. With significant amounts of public money already allocated to help bridge the digital divide between rural and urban areas. It's crucial that every pound is spent in the most effecient way. Reasonably priced access to BT's ducts and poles is central to creating a truly competitive process that will enable others, not just BT, to bid for and access these funds."Virgin Media spokesperson
The areas where Virgin Media and others feel the prices were too high, and still are is detailed below. These areas were highlighted in a letter to Ian Livingston back in April 2011.
|Openreach charge||Efficient / Market Price||New Openreach charge|
|Joint Box Breakthrough||£600||£165||No change|
|Joint Box / Manhole pull through||£522||£190||No change|
|New Pole||£550||£340||No change|
|New Small Footway Box||£825||£240||No change|
|Blockage Clearance||£695||£270||Between £254-£358|
Talk of blowing fibre over pole tubes or in ducting will have people dreaming of fibre-to-the-home, and we may see more schemes like this, and an increase in the amount of fibre-to-the-building where a fibre goes to a block of flats which use Ethernet cable to distribute access around the building. Another area this helps is the cost of providing backhaul from mobile masts and wireless networks that may meet the USC and superfast broadband goals.