Coming soon to a pole or duct near you competition for ultrafast broadband
Ofcom has a two pronged approach to dealing with BT Openreach at present, there is the on-going battle of how far to split Openreach away from BT Group with everyone trying to avoid an expensive protracted legal battle and the second is the Physical Infrastructure Access (PIA) product, or more correctly version 2 of the PIA product as several smaller operators are already using the first version.
Ofcom has announced another consultation on its plans for PIA 2 where the eventual hope is that by making duct and pole access attractive to BT competitors they will make use of it to deploy millions of ultrafast pure fibre connections.
"In July, Ofcom detailed a new strategy to promote large-scale roll-out of ultrafast broadband, based on cable and fibre lines that go all the way to people’s doorsteps. This would provide an alternative to the mostly copper-based technologies currently being planned by BT, and deliver benefits to people and businesses in terms of choice, innovation and affordable prices.
Ofcom believes network competition is the most effective spur for continued investment in high quality, fibre networks. This will also reduce the country’s reliance on Openreach, the network division of BT.
The proposals include changes that mean BT would recover the costs of providing third-party access, such as repairing ducts, in the same way it recovers these costs for its own deployments – for example, by spreading them across all services that make use of the duct.
So Ofcom is consulting on whether to require Openreach to upgrade its drop wires with fibre at the request of any telecoms provider who is offering full-fibre broadband to a customer. Openreach could then charge the provider for using the drop wire.Ofcom on new proposals
It could be said that after a decade of Ofcom sanctioned copper based local loop unbundling the regulator is now trying to get up to speed on getting pure fibre access out to more premises. One interesting snippet is that they seem happy with both coax (called cabled in Ofcom docs) or pure fibre.
One important consideration that Ofcom is seeking input on, is that competitors are asking for a relaxation on the usage rules so that more expensive leased line products can utilise PIA, current rules mean only consumer or SME grade services are allowed. Relaxing this rule would allow the deployment of higher profit margin leased lines which either form the cherry on top of the cake for deploying millions of FTTH lines or form the underlying core revenue with FTTH as the marginal revenue increase on top.
It is going to be interesting to see what happens in the next decade, if PIA 2 works then an independent Openreach might morph into a duct and pole maintenance operation with a gracefully degrading copper network and invest very little in its own pure fibre services. In other words the days of active hardware like VDSL2 and G.fast and their own pure fibre products might only be needed in the less commercially attractive areas, so we might see 80% of the UK served by others, and Openreach picking up the USO type business elsewhere.
If time travel existed we'd request that Ofcom borrowed the machine and re-started its current pure fibre focus around 2007, i.e. just after demand for broadband started to rocket due to the low price bundles from TalkTalk.