Skip Navigation


CityFibre appeal Ofcom's dark-fibre price-control remedy
Thursday 07 July 2016 12:45:01 by John Hunt

CityFibre have announced that they have lodged an appeal with the Competition Appeal Tribunal against Ofcom's decision to set price controls to allow network operators to connect to Openreach installed dark-fibre.

Ofcom's latest Business Connectivity Market Review set out remedies that would required BT to provide access in the London periphery and the rest of the UK (excluding Hull) to dark-fibre at controlled prices. This would allow providers to put their own equipment on the end of the fibre and run whatever services they like across it, at whatever speed they like (e.g. 10Mbps or 100Gbps). This is not the same as allowing operators access to FTTH, but instead the underlying fibres that are used in the business leased-line industry or national fibre networks..

This could seriously hurt operators such as CityFibre who have put in their own fibre and sell this as a service as with a price-controlled BT fibre, it may be that BT are forced to undercut other operators pricing for access. Whilst it may be seen as good for BT customers who use the fibre, it will be bad for competition, and it's more likely to stop companies investing in their own fibre, and help boost BT's own fibre base instead, thereby limiting competition.

CityFibre has a fibre foot-print in 37 cities across the UK as well as a national long distance network that connects these back to key data-centres across the UK with plans to grow this further.

"As a major investor in the UK telecom infrastructure market, working to transform digital connectivity across the country, we need to ensure that CityFibre and other fibre optic infrastructure builders can invest against the background of a fair and balanced regulatory regime. We believe Ofcom is implementing poor and inconsistent regulation, and we have a duty to robustly contest their decisions and policies in the normal course of business – especially where they conflict with stimulating long-term investment in the critical digital infrastructure which the UK so badly needs."

Mark Collins, (Director of Strategy and Public Affairs) CityFibre

In a separate news release, CityFibre and Three UK have announced how internet usage in Hull has grown following CityFibre's fibre rollout to the city. A 380% increase (since January 2015) in mobile internet usage has been seen following the upgrade to 4G of the majority of the city's mobile masts, including new dark-fibre backhaul connections (using CityFibre) to boost bandwidth to masts serving EE and Three customers.

This news is obviously timed to show the benefits of independent dark fibre networks. Whilst Hull is excluded from the price controls as it's a non-BT area, it is a good example of how the dark-fibre networks can be used to benefit general consumers indirectly. BT as it happens are against the decision as it will only really benefits those who do not build their own network, and believe it will reduce competition at the infrastructure level.

Comments

Posted by chilting 5 months ago
My understanding is that one of the role's of OFCOM is to nurture competition not to destroy it.
Having just one big player in the Wholesale Telecoms market cannot be sustainable in the long term.
Posted by WWWombat 5 months ago
I thought Ofcom had learnt the LLU lesson, and were aiming at encouraging real infrastructure operators now. Their stance on dark fibre seems to be opposite to that.

Strange, also, that BT will agree with CityFibre's appeal. As will VM.

Hull is something of a red herring. The city has been badly held back by Three on 4G, and there was a huge pent-up demand ready to be unleashed once they finally got back to their rollout promise.
Posted by john (Favicon staff member) 5 months ago
@WWWombat: it's quite possible that just improving the backhaul and using 3G might have seen a similar increase in usage
Posted by jumpmum 5 months ago
Issue seems to be the big fibre 'reseller' players (Sky, Talktalk, Vodafone maybe some others) just want cheaper backhaul and the ability to undercut BT without investing anything that have OFCOMs ear. Whilst there are a number of smaller players trying to invest in fibre infrastructure and compete directly without having the voice for OFCOM to listen. Making BT provide dark fibre at 'close to' cost will benefit no end user in the long term.
You must be logged in to post comments. Click here to login.