15th May 2015 11:29
LONDON (Alliance News) - BT Group PLC has warned that new proposals tabled by UK media and communications regulator Ofcom Friday requiring it to provide access to its fibre networks for high-speed business lines "risks favouring a few companies that have the greatest capability to deploy it, to the disadvantage of all other firms."
Ofcom on Friday put forward a slew of new proposals as part of its Business Connectivity Market review, including requiring BT to provide 'dark fibre' in areas outside of London, new service requirements for its BT Openreach arm, and deregulating some areas of the leased lines market.
Under the plans, BT would have to give its competitors physical access to its fibre-optic cables, allowing those competitors to take direct control of the connections. BT is already required to offer wholesale leased-line products, which bundle the fibre-optic cable with its own network equipment, but Ofcom said the new proposals would go further, allowing operators to use the BT cables with their own equipment, rather than BT's.
The service is often referred to as 'dark fibre', as the cables would not be 'lit' using BT's electronic equipment, but rather by using the competitors' own equipment installed at either end of the cable.
BT will not be required to provide this access in central London, where Ofcom considers there to be sufficient competition, and in Hull where most leased lines are provided by Kcom Group PLC.
Ofcom is also proposing a new minimum quality of service performance requirements for BT's infrastructure division Openreach, which installs and maintains connections to BT's network for competitors.
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. Under the new plans, a first quality of service rule would require Openreach to return to an average time between a customer's order and the line being ready of 40 working days by 2017, while a second rule would mean it must meet these targets for 80% of customers by 2016 and 90% by 2018.
Finally, Ofcom is proposing the deregulation of some areas of the leased lines market, including lifting supply and pricing requirements "on all but the older services in central London", where it now believes competition is now sufficient. It is proposing to remove requirements on BT applying to very-low bandwidth leased lines, as many users are moving to faster alternatives, and BT is undertaking a withdrawal of these lines.
The changes are subject to a consultation, which will close on July 31. Ofcom expects to publish its final decisions in the first quarter of 2016, with the changes to come into effect in April 2016.
"Openreach?s current offer creates a level playing field and a vibrant, competitive market with hundreds of competing companies, large and small. Mandating dark fibre risks favouring a few companies that have the greatest capability to deploy it, to the disadvantage of all other firms," a BT spokesperson said in a statement.
"It will undermine investment ? as a number of service providers have warned ? and it would also increase costs, divert resources and add more complexity just when we?re beginning to make progress on improving service," said the spokesperson.
Rival CityFibre, which deploys and operates fibre networks, welcomed Ofcom's proposals.
"As one of the UK?s largest independent suppliers of fibre infrastructure, CityFibre has long championed making dark fibre widely available in the UK, placing it at the core of our Gigabit City projects in York, Peterborough, Coventry, Aberdeen and Edinburgh over the last three years," CityFibre Chief Executive Officer Greg Mesch said in a statement.
However, Mesch urged Ofcom to make sure 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," Mesch said.
In Ofcom's previous Business Connectivity Review, published in 2012, it decided not to impose dark fibre requirements on BT, saying at the time that the imposition would require "significant regulatory changes and intervention, and we would therefore need clear evidence to persuade us that this would be justified."
Shares in BT are trading down 0.04% at 464.80 pence Friday morning, whilst shares in CityFibre are trading down 3% at 64.00 pence.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews. Additional reporting by Sam Unsted; [email protected]; @SamUAtAlliance
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