The great fibre debate

The main sticking point ISPs are quarrelling over is the pricing of infrastructure itself. A bitter war of words has broken out thanks to a certain letter sent to the Government in April.

We've got to have fair pricing so that these other companies can have a good crack at the whip.

In that letter, a host of providers, including big players TalkTalk and Virgin, said BT was charging too much for its Physical Infrastructure Access (PIA). Their argument was simple: BT spends far less on implementing PIA than it charges for it.

The issue reared its ugly head again when Fujitsu announced its plans for a fibre network, saying the project needed BT to offer acceptable pricing before any work could begin.

Andrew Heaney, executive director of strategy and regulation at TalkTalk, wondered whether BT hadn't just "plucked their numbers from the air."

"We truly believe the price is being charged way above cost," Heaney told IT Pro

"We've got to have fair pricing so that these other companies can have a good crack at the whip. Openreach don't want us to have fair pricing because that's their way of protecting their monopoly and making sure they're the only game in town."

Heaney compared the fibre situation to local loop unbundling (LLU) issues at the turn of the Millennium, when similar problems with pricing arose. ISPs have learnt from that episode, he believes.

"The good thing is we know where the pitfalls are and we know the tricks that Openreach will play and we're prepared to fight it intensely," Heaney added.

"It would be lovely if Openreach came out with the right answer, but I'm not holding out much hope."

BT, of course, is strongly of the opinion its prices are more than fair. When talking about ducts, BT believes its prices are 10-15 per cent below the average cost elsewhere in Europe in terms of rental per metre.

The telecoms giant suspects a little bit of gamesmanship on behalf of other industry players too.

"I'll be honest with you, I think certain people are using the squabble for certain ends and certain people are not quite sure what they're squabbling about," said Fergus Crockett, product director for Openreach.

It doesn't look likely this feud will end with hugs and kisses all round. A good bet would be on an Ofcom intervention.

If Openreach doesn't do what other ISPs want and a stalemate is reached, the regulator may have to issue a dispute resolution. With gritted teeth, BT might be forced to change its pricing.

Get trialling

In a bid to avoid that potential outcome, BT has tried to play nice, to some extent at least.

Over the past 10 months, the provider has been running a number of industry collaboration groups on fibre deployment, hence its surprise when rivals lodged their complaint with Ed Vaizey.

More significantly, BT has also set up trials to see how PIA sharing would work.

I think certain people are using the squabble for certain ends.

Up to seven other ISPs can join in, but only two have so far. Crucially, Sky has jumped on board to test out the infrastructure, showing the big boys of the ISP world can work together.

"The trials are so important because they will actually allow us to understand whether our costs are right," said Bill Murphy, managing director of next generation access at BT. "Do the trial... you can argue the prices at the same time."

Others don't quite see it BT's way. Heaney claimed BT was "talking nonsense" in suggesting others should join the trials to test pricing.

"It is clear today that most of their PIA prices are excessive. You don't need to build equipment to do that, you just need a calculator to work out the costs of their existing assets," Heaney added.

"BT's behaviour is merely obfuscation and trying to delay the setting of fair PIA prices."

And Virgin's response on why it hasn't joined in with the trials? It didn't give us one.

What this tells us is simple: PIA is one serious sticking point, a significant obstacle potentially preventing a large chunk of the UK from getting fibre.

If matters aren't settled, Ofcom will have to step up to the plate, but the bitter taste left in the mouths of ISPs will linger for some time.

In turn, this will only lead to less collaboration in the future, potentially stunting the growth of fibre when other issues arise in the years ahead. No one needs, or wants, that.

Tom Brewster

Tom Brewster is currently an associate editor at Forbes and an award-winning journalist who covers cyber security, surveillance, and privacy. Starting his career at ITPro as a staff writer and working up to a senior staff writer role, Tom has been covering the tech industry for more than ten years and is considered one of the leading journalists in his specialism.

He is a proud alum of the University of Sheffield where he secured an undergraduate degree in English Literature before undertaking a certification from General Assembly in web development.