Ofcom tells BT Openreach to install leased lines faster

News
22 Mar, 2016

Regulator will make BT cut costs of business lines too

BT must slash its prices for high-speed business lines and install them more quickly, under new Ofcom recommendations released today.

The new rules, which are subject to EU approval, would see the regulator impose tougher installation targets on BT and its fibre network arm, Openreach, when they install leased lines, a process that currently takes 48 working days, up from 40 in 2011.

Leased lines are dedicated high-speed data links made available to businesses to transfer high volumes of data on their networks.

The majority of these lines are owned or maintained by BT, on behalf of rivals who can provide their own services on them.

Ofcom’s proposals would require Openreach to reduce its average installation times to 46 days by 2017, and back down to 40 the following year, after finding that the body fails to complete one in four installations on the agreed date.

Jonathan Oxley, Ofcom competition group director, said: “BT is relied on by many companies to install these lines, and its performance has not been acceptable. 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.”

Openreach must complete 90 per cent of leased line installations on the day it originally promises from April 2018, under Ofcom’s plans.

Prices

Meanwhile, Ofcom wants BT to make deep cuts to its leased line prices.

Newer lines based on Ethernet standards, with bandwidths up to 1Gbps, would see an initial 12 per cent cut, with an overall cap - linked to the consumer price index - of 13.25 per cent for each year of the charge control.

For older lines with bandwidths of up to 8Mbps, Ofcom will enforce a nine per cent price reduction, with an overall cap, linked to the consumer price index, of 3.5 per cent for each year of the charge control.

Ofcom aims to bring prices down over a three-year period starting this May.

“Today’s statement from Ofcom is very much in line with what they proposed last year," a BT spokeswoman said in a statement, "so there are no surprises here. Competition and choice have been growing in the business connectivity market and we believe there is a strong case for less, not more, regulation."

She added: “We accept there is more to do on service and are committed to doing better and meeting our business customers’ rising expectations. Ethernet provision can be complex and the need for street works and wayleaves mean delays are often beyond our control. We are doing all we can to overcome such challenges. The required Ethernet price cuts and the introduction of dark fibre will not help to underpin service improvement."

Dark fibre network

Ofcom also wants to loosen BT’s grip on the UK broadband market by giving rivals more access to the telco’s dark fibre network, which is effectively fibre that is not ‘lit’ by BT – rather by another provider who would install their equipment at both ends of the optical fibre.

BT is already required to offer leased line products – including fibre and BT’s own network kit – to competitors, but Ofcom wants to allow rivals to use their own network equipment, instead of relying on BT’s.

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.”

The BT spokeswoman said: “Dark fibre is a flawed piece of regulation that introduces an unnecessary layer of complexity and will deter others from building their own fibre networks. It 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, City Fibre and Zayo.”

EU approval

The proposals were published today in Ofcom’s Business Connectivity Market Review, and must gain approval from the European Commission before being finalised by the end of April.

They come after Ofcom's Strategic Review of Digital Communications, in which the regulator decided not to remove Openreach from the control of BT, but forced BT to open up its network more to rivals.

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