Earlier this year, UK telecoms regulator Ofcom revealed its plans to open up the fibre market to smaller ISPs, telling BT that it had to separate its Openreach fibre network from the main company – turning the new subsidiary into a pure infrastructure-management firm. However, it has now backtracked on its decision.
Openreach is to revoke and re-examine the changes, first discussed in 2016 under the name Dark Fibre Access, following a ruling from the Competition Appeal Tribunal. BT raised the issue with the CAT, citing incorrect market definitions by Ofcom in its ruling.
Originally, Openreach was due to launch DFA this October, giving BT’s competitors access to the fibre network. While Ofcom said that the move would encourage competition, the large infrastructure vendors like BT and Cityfibre warned that it could discourage investment in the fibre space.
The CAT reached its decision in August and has required Ofcom to revoke certain parts of its 2016 Business Connectivity Review (when the idea of DFA was first announced), as described in the statement below:
The Competition Appeal Tribunal has found Ofcom to have erred in relation to various aspects of the decisions concerning market definition under appeal and required Ofcom to look again at some specific matters concerning market definition. In the meantime it has required Ofcom to revoke the market identifications, market power determinations, SMP [Significant Market Power] services conditions and directions (where applicable) in relation to:
a) The wholesale market for contemporary interface symmetric broadband origination in the Rest of the United Kingdom excluding the Hull Area;
b) Wholesale market for contemporary interface symmetric broadband origination in the Central London Area; and
c) The wholesale market for contemporary interface symmetric broadband origination in the London Periphery.
Ofcom remains committed to the concept of DFA and today has launched a fresh consultation on their original proposals, which the organisation expects to overlap with its next Business Conductivity Review. The consultation will be closed on the 29th December, with a statement in early 2018.
The full statement is below:
In the meantime, we are imposing temporary regulatory measures. These will apply in a revised set of markets where, under a conservative approach which takes into account the Tribunal’s judgement, it remains clear that BT has significant market power (SMP). These measures will safeguard competition and protect the interests of consumers in the revised markets.
The temporary conditions include the following changes from the position in 2016:
- There is no longer regulation of services above 1Gbit/s (‘Very High Bandwidth’).
- We have also removed all regulation from the central business districts of Birmingham, Glasgow and Leeds.
The temporary regulations apply to services at and below 1Gbit/s and include: access requirements, charge controls, and minimum quality standards for these ‘Lower Bandwidth’ Ethernet leased lines. These conditions are broadly in line with those set in the 2016 BCMR.
Ofcom is also today consulting on proposals to introduce a revised dark fibre remedy to address BT’s SMP for services at and below 1Gbit/s. We believe dark fibre can provide significant benefits for businesses and consumers – supporting better broadband and mobile services, including 5G. This includes a consultation on the market definition and SMP findings adopted in the temporary conditions statement.
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