Sky tells Ofcom - Openreach does not deliver quality of service
Openreach was created nine and half years ago and very quickly ran into problems with the lack of engineering staff and while requirement has picked up the numbers the start of the FTTC and FTTP roll-outs in 2009 and BDUK work in late 2012 and onwards is clearly stretching resources.
So today we have Sky publishing their submission to the Ofcom Strategic Review of Digital Communications, last week saw the BT Group talking of an end to analogue phone by 2025 as it set out some of its own ambitions, i.e. removal of the yoke that is the copper USO for telephone.
"BT’s Openreach division does not deliver 21st century quality of service. Openreach owns and is responsible for maintaining the UK’s critical ‘last mile’ copper network – the ubiquitous network of lines into peoples’ homes, and to small businesses. The quality of service delivered to consumers by Openreach falls far short of an acceptable standard, including: an excessive number of faults, failure to meet targets for repairing faults, long waits to have new lines installed, constantly missing appointments and, when appointments are met, often not completing jobs."Extract from Sky submission to Ofcom Strategic Review of Digital Communications
Sky also states that fault fixing is consistently under the agreed targets they have with service providers and with one third of the UK broadband market that uses Openreach infrastructure Sky should be well aware of any failings. With Sky entering the infrastructure market with a FTTP trial in Swadlincote and the CityFibre joint venture it will be interesting to see how running independent infrastructure works out. Sky estimates that missed appointments by Openreach result in potentially 18,000 days of work lost to the UK economy per year.
The big problem with the last Ofcom strategic review was that the focus was on the copper world and equivalence of input, which has happened. Sky sit firmly in the camp that wants to see Openreach made fully independent stating that "common thread to those problems is BT’s ownership of Openreach". While we can see the appeal of a fully independent Openreach it might not be the heaven everyone expects, without significant investment in both new staff and infrastructure it is unlikely that problems with fault handling will vanish.
Resolving the worries over 'wooden dollars' (a Sky phrase describing the way Openreach and BT can sell fibre) is interesting, it is not clear whether Sky want lower pricing from Openreach or BT Retail to be forced to have higher margins. If Openreach was trying to stand totally on its own then reduced prices seem unlikely, if anything to pay for extra staff to ensure the problems with fault and install times diminish prices may have to go up.
If Openreach is split away from the BT Group, then Virgin Media will become the largest vertically integrated network provider and retailer in the UK.
We believe the conundrum that needs resolving is how does Ofcom create a competitor to Openreach in the half of the UK where they no major alt-net competition exists and squaring this with the on-going rush to roll out more fibre based broadband. An independent Openreach may solve some worries for Sky and others, but probably will do little for the individual member of the public.