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Openreach publishes lower prices for PIA duct and pole access
Friday 07 October 2011 13:15:38 by Andrew Ferguson

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.

  • Spine duct access was originally £1.16 per metre, now it is £0.86 per metre for single bore, £0.54 for 2 bores and ducts with 3 or more bores are £0.44 per metre. The more bores the larger the duct.
  • Lead-in duct which is the last few metres to a building, falls from £2.12 per metre to £1.34.
  • Attaching something to a drop pole would have cost £21 per year under the old pricing, but is now around £11 or less where several drop-wires are fixed to each pole.
  • Facility hosting £14.98 for each manhole entry, allowing a provider to rent space in existing manholes.
  • Facility hosting £7.03 for each joint box entry.
  • Blockage clearance £358 for first blockage, subsequent clearances £306.

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 town
Ovum 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.

Comments

Posted by doowles over 5 years ago
Those prices still seem quite ridiculous to me! At nearly a pound PER METER that is going to be billions of pounds A YEAR to fibre the country.

Why cant they just let it be accessed for a small fee to provide a quick fibre rollout which will put Britain at the front of the world?
Posted by andrew (Favicon staff member) over 5 years ago
Why not lower, maybe because Openreach as a division needs to balance its books.

The majority of the run in the ducting, would be for multiple users, thus spread out amongst a number of connections.

No one if forced to use Openreach, if they can put the infrastructure in the ground cheaper they are free to do so.
Posted by farnz over 5 years ago
Last time I went hunting for pricing, ducting of the size BT are offering (assuming you have magic pixies to put it under the road) was £3 per metre in bulk quantities. Add in the cost of roadworks (including labour), and £1 per metre doesn't look so expensive compared to the cost of borrowing the money to bury your own ducting.
Posted by GMAN99 over 5 years ago
I was going to say, just wait for more complaints saying that its still not cheap enough, didn't get in early enough.....

Your statement is obviously ridiculous doowles, it equates to.

"Let other providers have access at less than cost and let Openreach pay the majority of the cost for another provider to provide a service"

Don't go into business, please....
Posted by andrew (Favicon staff member) over 5 years ago
Just added a response from Virgin Media.
Posted by themanstan over 5 years ago
@doowles

If you hadn't noticed, billions is the cost rolling out fibre infrastructure nationwide... NTL and Telewest went bankrupt to the tune of £15 billion for their cable/fibre rollout to ~50% of homes... France will spend >20 billion euros (estimated) to rollout fibre to 90%...
Posted by Bob_s2 over 5 years ago
The cost of access to the ducts is supposed to represent the BT costs for the ducting most of which is so old the capital cost would have been writen off many years ago so the only real costs is the small amount of new ducting BT put in plus any costs in maintaing the ducting plus the BT margin.
Posted by GMAN99 over 5 years ago
Virgin moaning already shock horror. Hopefully Ofcom will see sense and not intervene now and Virgin can stop crying the poor tale and put its money where its mouth is and crack on or do they need another 10 month excuse to delay starting work?
Posted by GMAN99 over 5 years ago
I also cannot believe others are after the middle mile?? They are absolutely nothing to do with home broadband which is what this is all about and rightly so excluded.
Posted by themanstan over 5 years ago
http://www.derrycity.gov.uk/DerryCitySite/files/8e/8e45ded4-f244-401b-ae75-fd0d143954c9.pdf

See page 58

VM charge twice as much for a small footway box as they want to pay!!!
And the opther prices they charge are astronomical, note these are repair charges.
Posted by andrew (Favicon staff member) over 5 years ago
The Derry pricing appears to be replacement of damaged ones.

I looked at telegraph pole prices, and it varies according to size, but £340 looks very close to cost of pole. Add installing and £550 is not horrendous.
Posted by themanstan over 5 years ago
I do mention they are repair prices.

And removal of the old box, would be analogous to the cost of contracting the excavation/plant hire in a new install.
Posted by mervl over 5 years ago
When Virgin refer to "crucial new build and ancilliary charges" do I rightly interpret this to mean that their main interest is in new developments (there are few enough of them and it's easier to piggy back BT than providing cable as an alternative) and NOT so much in providing fibre services to existing homes in the final third?
Posted by andrew (Favicon staff member) over 5 years ago
If BT is charging well over the usual commercial price, then surely room for an alternate provider to slip in and make a fortune by just undercutting BT.

Or Virgin could show BT how to do it, by opening their ducting up at the efficient pricing.
Posted by GMAN99 over 5 years ago
That's how I read it mervl, they don't want to do new builds themselves as it costs too much so they want BT to do it for them and a cheaper price than what Virgin can do it at themselves.

You couldn't make it up!

Virgin have no interest in the final third, they aren't even in some densely populated areas of the UK!
Posted by jtthedevil over 5 years ago
Our local Fujitsu premises have now been rebranded Virgin Media. Wonder if its anything to do with the final third fibre network they were threatening with talktalk. Fingers crossed they start local if it is!!
Posted by Dixinormous over 5 years ago
They are referring to charges for new network build nothing to do with new build housing or whatever.

Prejudice getting in the way of basic comprehension.
Posted by wirelesspacman over 5 years ago
@Bob

Why don't you and Doowles go into business together and give us all a good laugh.
Posted by GMAN99 over 5 years ago
Dixi, no just a misunderstanding, what does the new network build mean? I assumed it was referring to build of new ducting/poles?
Posted by damien001 over 5 years ago
new builds I think refer to new housing exstates
Posted by otester over 5 years ago
We should be looking for infrastructure competition, not artificial LLU/PIA competition we have now.

Like I said years ago, this would end badly.
Posted by themanstan over 5 years ago
Unfortunately, VM is not prepared to invest in additional infrastructure nor wholesale... so as the only other large "competitor" there can be no competition... that is not BTs fault.
Posted by creakycopperline over 5 years ago
695 quid for blockage clearance, i'll do it for 600, altough what it entails i'm not sure.
im assuming they mean wet leaves and twigs that have fallen down the holes?
Posted by themanstan over 5 years ago
More where the duct has got tangled stuff or even collapsed...
Posted by Bob_s2 over 5 years ago
Why an earth should there be a charge for blockage clearance. The companies are paying for access to the ducts to run in fibre or copper. If the duct is not fit for purpose ie it is blocked it should be BT's responsibility to clear it at their cost
Posted by themanstan over 5 years ago
Because, fit for purpose is BT connections if those aren't broken. Then the duct is fit for purpose. Where another operator wishes to make use of duct but finds a blockage that needs to be cleared at their expense.
Posted by themanstan over 5 years ago
PIA is not regular leasing...
Posted by otester over 5 years ago
@themanstan

They need to get over these problems first:

1. Debt.
2. UK economic future not looking good.
3. Investing in upkeep/upgrading their current coverage.
Posted by themanstan over 5 years ago
@otester

Is this is other operators you're referring to?

Point 2 big issue, people will think twice before upgrading their BB package.
Which impacts point 3.

Because BT's operating revenue / debt ratio is fine and they're reducing debt. Although, less debt would equal more investment capital.

VM still has a bit to do on it's debt ratio, but in the last couple of years has put out "good" numbers on revenue, although still hasn't put out a profit.
Posted by themanstan over 5 years ago
Sorry just read back, as per above VM's debt. I'd say 3-4 years before it's below ~£4b, where it's operating revenue is a better match for it's debt.
Posted by otester over 5 years ago
@themanstan

I was referring to VM, I should have been more clear :P
Posted by jumpmum over 5 years ago
creakycopperline;- Duct clearance consists if finding where in the duct the blockage(ages) is/are, Then digging down to it clearing the blockage/replacing the duct, making good the hole in whatever the surface is (Could be road). BT would accept your quote of £600 as a subcontractor subject to no compliants from the public and Council and a years warranty on the work! .
Oh you have to post a Bond with the council before you can start to pay for any rework they may decide to do to the surface, don't ask how much!
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