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Could enforced access to BT dark fibre cause problems for CityFibre?
Friday 15 May 2015 09:44:35 by Andrew Ferguson

Ofcom has thrown a bit of a spanner in the works in the form of a proposal to force BT to open up its backhaul fibre network to others in the form of dark fibre, and also is acting to put in place new minimum service quality targets on Openreach over its installation of Ethernet and leased lines.

"To ensure that businesses have effective choice, and to encourage competition and innovation, Ofcom is proposing a new requirement on BT - the largest supplier in the market, upon whose network many competitors’ services rely - to supply ‘dark fibre’ in areas outside central London."

"Ofcom is concerned that Openreach often takes too long to install leased lines, and too often changes the date on which it promises to deliver services.

Since 2011, the average time between a customer’s order and the line being ready2 has increased from 40 to 46 working days. The first new quality of service rule would require Openreach to return this average to 40 working days by 2017, and maintain it thereafter. "

Extracts from Ofcom statement

To make sure people get this right, this does not mean FTTP is about to be come mega cheap or easy to order, dark fibre is access to a fibre strand and rather than BT/Openreach electronics on each end you supply your own and can run it at 100 Meg or 10 Gbps for the same cost (apart from price of optics you buy yourself). What this allows for is mobile and large businesses to connect different sites and not worry about data volumes, beyond the need to upgrade from 1 Gbps to 10 Gbps etc.

Firms like Geo and CityFibre have built a business model around dark fibre in various parts of the UK, so while forcing BT to open up will create more access opportunities it might make it harder for the new entrants to undercut and also be unique. Alternatively it be viewed as being the glue that will make it easier for people like CityFibre to create a much larger fibre network linking more and more cities, with them concentrating on deploying their fully owned fibre for the links to small businesses and homes.

How the proposals will work are what the consultation period that closes on 31st July 2015 is aiming to find out, i.e. a chance for everyone to have their say. Nothing is expected to change until April 2016 with dark fibre not expected to appear until April 2017.

It will be interesting to see how the dark fibre option plays out, one can foresee a scenario where BT works to ensure there is not spare fibre available for dark use, thus requiring a more expensive install of a new bit of fibre. This is already the scenario foe the GEA roll-outs, where spare fibres are in the ground already to be used in case one fibre goes bad, or are earmarked for future expansion in the G.Fast and maybe GEA-FTTP.

For the mobile operators access to a BT dark fibre will help to ensure that the advantage BT might have had with EE being owned by them is reduced, but having met CityFibre one of their anchors was meant to be helping to serve mobile operators with fibre to the mast.

We have no data on the Ethernet/leased line problems but are willing to bet that the volume of the GEA (FTTC/fttp) roll-outs particularly in the BDUK areas has stretched Openreach resources, of course going faster is easy you just employ more people from the pool of thousands of unemployed fibre splicers and installers - alas we suspect this is a small or non-existent pool.

Literally just after hitting publish, a comment from CityFibre arrived:

"While CityFibre welcomes Ofcom’s decision as a clear validation of our business model, we urge it in the strongest possible terms to ensure that any future approach to pricing in no way distorts the market or discourages investment by independent infrastructure builders.

The task of redressing the legacy of decades of underinvestment in the UK for fibre infrastructure is too large and important to be left to solely one monopoly provider, and the role of smaller, entrepreneurial players must not be underestimated or undervalued. It is essential that a pro-investment environment, which preserves supplier diversity and encourages network competition, be established and safeguarded for decades to come.

Greg Mesch, Chief Executive Officer, CityFibre

To add our own comment following on from this, we have had 30 years of Oftel/Ofcom regulating BT and all too often BT is seen as the people to go to in terms of any broadband coverage/fibre issue when perhaps a better remedy might be to do more to ensure diverse competition, rather than just serve the needs of the largest existing BT customers who just want to cut costs.

Comments

Posted by pgre about 1 year ago
I suspect many people may disagree but I do wish Ofcom would look at Virgin Media at the same time... I end up feeling BT gets a bad deal and as mentioned lets encourage others into the market place here.

I'd gladly pay someone right now for a fibre into my house if it was a reasonable price.
Posted by TheEulerID about 1 year ago
There's a good reason VM won't be considered, and that is their financial position is rather fragile (in comparison to BT) and they are currently the only viable infrastructure competitor to BT in the domestic market. Forcing VM to wholesale their network would be immensely expensive to implement (it was with BT) and would probably demolish any business case VM has for network expansion. Indeed, it could even put it in reverse.
Posted by Mooingall about 1 year ago
Is this similar to the situation that had people hoping "Be There" (LLU?) and such would install the required hardware in their area?

If so, could we perhaps see higher VDSL speeds appear from this, in the form of a modern "Be There" ISP?

Posted by tdw42 about 1 year ago
I suspect that the lack of enough subcontractors to carry out civils, and the hard deadlines on BDUK projects, means that Openreach do little to push installs which are not completely straightforward - still waiting on an EAD circuit which had an install date of August last year, and have absolutely no information as to when it will now be fulfilled.
Posted by TheEulerID about 1 year ago
Companies had plenty of opportunity to consider rolling out their own VDSL infrastructure and a few even did so Warwicknet (in business estates), and a few public money projects (like Yorkshire Digital Region). However, in general, alternative operators didn't consider it economic, and in practice it's almost certain that multiple VDSL operators were unsustainable. After a lot of dilly-dallying around, Ofcom came to the same conclusion and gave BT a bit of regulatory breathing space.
Posted by Hubz about 1 year ago
hehe remedy. 1 Gig to my house now BT! Maybe I'll just order a EAD access.
Posted by chris6273 about 1 year ago
I have to admit, Ofcom are starting to become very unfair on how they regulate BT nowadays. Obviously the local loop which has been in place for many years was funded by the taxpayer but fibre in the form of leased lines hasn't been funded by the taxpayer as far as I know. I can't remember FTTP being widely (I know in some areas it may have been) funded by the taxpayer.

Maybe they should start looking to regulate Virgin Media; they have a large presence in many cities which is often ignored. Lots of opportunities there.
Posted by mervl about 1 year ago
This is about the economy isn't it? As one would expect with a boss who arrived from the Treasury. The Holy Grail is that lack of fibre services is holding back business. Never mind the lack of customers. We have all been indoctrinated that anything digital increases productivity to satisfy the economic gods. Well, what other options have we got?
Posted by TheEulerID about 1 year ago
@chris6273

It's wholly irrelevant to SMP how infrastructure is funded. It's also irrelevant how it was initially funded (as it was sold, as part of the business, at a total inflation-corrected price of about £30bn).

However, what has to be considered is the impact that retrospectively applying rules like this has on future investment decisions by BT on behalf of the shareholders.
Posted by AndrueC about 1 year ago
"Obviously the local loop which has been in place for many years was funded by the taxpayer "

Only that part that was installed prior to the early 80s. A lot of houses have been built and provisioned with telephone lines over the last 30 years ;)
Posted by ValueforMoney about 1 year ago
@ TheEulerID - the dynamics of fresh faces at Ofcom might be a factor, but BT's investment is at best flat if not falling, and service levels have fallen so the carrot approach has not really worked. The £2,5bn is a myth, but the 50k cabs commercial is real. So they try to do a bit more with a stick.
Posted by TheEulerID about 1 year ago
@VFM

This proposal has not to do with domestic broadband. It's all about private leased circuits. Just about the only connection is some alternative operators might find it useful for backhaul.
Posted by ValueforMoney about 1 year ago
@TheEuliarID Surely it is about dark fibre between any two points. You can put any service you like over it.
Posted by kooky about 1 year ago
The fibre install time needs to be improved.

I ordered a leased line from Virgin on 2015 November 28th. It is still not working today, 170 days later. The earliest estimate for completion is 6 months after the order date.

Virgin delegated the fibre install to BT.

The install was fairly simple. The BT manholes and an FTTC cabinet are directly across the road from us. Digging took 1 day. And Fibre install half a morning.

If a business moved offices would they be paying rent on an empty office building for 6 months waiting before they could move staff in?

We are uncompetitive as a nation.
Posted by ValueforMoney about 1 year ago
EukerID sorry that i inserts itself apologies. The limits are appearing in section 9 - 50km, pricing equiv to 1Gbits, backhaul and local access.
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