Comms watchdog Ofcom has placed new demands on BT to improve its service, including rules for Openreach to speed up the installation of high speed business lines and reduce wholesale costs, aiming to bring prices down over a three year period from 1st May 2016.
The main charge controls relate to newer Ethernet lines (initial reduction in prices of 12 per cent) and older leased lines using traditional interface technology (initial nine per cent reduction). Ofcom also confirmed that BT's dark fibre network should be accessible to competitors. The announcement follows the regulator's Strategic Review of Digital Communications that outlined plans to impose tougher standards on BT's Openreach division.
Ofcom's report stated that since 2011 the average time between a customer's order and the line being ready has increased from 40 to 48 working days. Ofcom's proposals would require BT to reduce this to 46 working days by the end of March 2017, and return it to 40 working days the following year. The regulator also found that Openreach is failing to complete one in four leased line installations on the stated install date, and is proposing that by the end of March 2017 Openreach must complete 80 per cent of leased line orders by the date it promises customers, rising to 90 per cent from April 2018.
Ofcom has also said that Openreach must fix at least 94 per cent of faults on its leased line network within five hours. Jonathan Oxley (pictured), Ofcom Competition Group Director, said: "These new rules will mean companies across the UK benefit from faster installation times, greater certainty about installation dates and fast repairs if things go wrong."
Ofcom also requires BT to provide access to its optical fibre network, giving competitors physical access to its fibre optic cables and allowing them to take direct control of the connection. Oxley added: "We have outlined plans to reduce the country's reliance on BT's Openreach division. Our proposals on dark fibre do just that, letting BT's competitors better serve their customers by getting direct access to BT's optical fibre cables."
As part of the dark fibre proposals Ofcom would require BT to publish a draft 'reference offer' for industry, containing wholesale pricing and terms for access by 1st September 2016.
This would then be subject to negotiation between BT and other providers, with a view to BT publishing a final reference offer by 1st December 2016. Dark fibre access would then be available to telecoms providers from 1st October 2017.
The plans form part of Ofcom's Business Connectivity Market Review (BCMR). The new rules will be finalised at the end of April subject to consideration by the European Commission. BT responded quickly to Ofcom's new proposals, saying 'no surprises here'. In a statement the telco asserted that 'there is a strong case for less, not more, regulation'. BT conceded that service improvements are required and believes that Ofcom's proposals will have a detrimental impact on achieving its aims. The BT statement said, 'The required Ethernet price cuts and the introduction of dark fibre will not help to underpin service improvement'.
In its response to Ofcom's demands, BT described dark fibre as a 'flawed piece of regulation that introduces an unnecessary layer of complexity and will deter others from building their own fibre networks, which is at odds with Ofcom's recent statements about increasing competition at the infrastructure level. It is a cherry pickers charter benefiting those who don't invest in networks at the expense of those who do including BT, Virgin Media, CityFibre and Zayo'.
Mark Collins, Director of Strategy at CityFibre, said: "Ahead of the BCMR consultation we strongly urged Ofcom to ensure that any future approach to regulated pricing in no way distorts the market or discourages investment by independent infrastructure builders. We are in the process of reviewing the BCMR draft statement in detail to determine if Ofcom has achieved the correct balance of access regulation to Openreach's infrastructure with the appropriate incentives to support investment in new independent fibre infrastructure.
"Although Ofcom has recognised that Openreach needs to improve its business service delivery, the addition of dark fibre into its product portfolio will clearly add yet another layer of service and operational complexity." •