Tag: Openreach

UK to make Openreach a legally-separate entity

Article

New UK Regulatory Regime Begins for Legally Separate Openreach | ISP Review

My Comments

Australia, the UK and New Zealand have approached the idea of encouraging telecommunications competition in the fixed-line space by detaching the fixed-line infrastructure from the incumbent telco. In Australia, this was with NBN as effectively a public entity buying this infrastructure from Telstra and Optus, or New Zealand who had Telecom NZ split in to Spark as a telecommunications reseller and Chorus as an infrastructure entity.

The Australian and New Zealand effort had an emphasis on creating greater distance between the incumbent telecoms service reseller and the infrastructure entity with a stronger clear-cut emphasis on the infrastructure entity not favouring the incumbent telecoms reseller.  This was through effective legal separation of these companies in a manner that they couldn’t control each other.

But the UK implemented a similar plan for splitting British Telecom by having the fixed-line infrastructure managed by Openreach and BT being a telecoms reseller. But there wasn’t a strict legal delineation between these two companies and this closeness allowed Openreach to continue to operate in the same manner as BT did when it was the UK’s incumbent telco monopoly. This led to poor-quality service and poorly-maintained infrastructure, with BT Openreach ending up with an Internet-wide nickname of “Openwretch”.

The underinvestment in the infrastructure by Openreach was to satisfy BT’s ends rather than providing a high-quality service that would benefit competing telcos or ISPs using that infrastructure. This also rubbed off on the competitors’ customer base with the reduced service reliability and often happened when new technology was being delivered by Openreach. Let’s not forget issues like “cherry-picking” areas that get fibre-to-the-premises broadband or whether rural areas get decent broadband.

New Ofcom regulations were implemented in the UK with the requirement for Openreach to be a company that is legally separate from BT. This meant that they had their own legal identity (Openreach Limited) with its own board of directors and with its staff working for that company. This is meant to effectively permit its own corporate governance that is independent from BT.

There will be the issue of logically moving the employee base to this new identity including rearranging the pensions arrangement for the staff. Let’s not forget that there will be a strong marketing and PR effort directed towards the stakeholders to “refresh” the Openreach image, perhaps with a new brand.

What is meant to happen is that competing telcos and ISPs will he required to have access to the same technology on the same footing as BT. This will also be underscored by newer tougher minimum quality standards including more fibre-to-the-premises broadband deployment across the UK.

There are newer market dynamics affecting the availability of infrastructure for residential and small/medium-business telecommunications and Internet service in the UK. Here, an increasing number of infrastructure providers like Cityfibre, Hyperoptic, Gigaclear and B4RN are providing infrastructure-level competition in various urban and rural areas. This is along with an increasing number of full-fibre installations taking place.

The issues that will crop up include Openreach outbuilding the infrastructure-level competitors in urban areas, especially if they can effectively “possess” a building, street or neighbourhood by having exclusive infrastructure rights to that area. Here, the risk that is being highlighted is the possible market consolidation due to competitors being driven out of business or taken over. I also see this risk affecting ISPs or telcos, especially small-time or boutique operators, who prefer to deal with particular infrastructure providers not being able to operate or being forced to use one of a few providers.

Then there will become the issue of what level of competition is sustainable for the UK’s telecommunications and Internet-service market. It is also a question that can affect any market heads towards or already has infrastructure-level competition for their Internet and telecommunications.

This question can affect ISPs / telcos, end-users, local government and premises owners. A core factor that will come in to play here is what kind of access is granted by an infrastructure provider to retail-level telecommunications / Internet providers on business terms that facilitate competitive operation.

-The factors that come in to play include whether there is an innovation culture where the operators can differentiate themselves on more than just price; and what service price level the market can go below before companies can’t operate profitably. Then there is the issue of whether the UK market really expects a pure-play Internet-only operation from these providers; or a multiple-play operation with fixed-line or mobile telephony, pay-TV or other online services. That also includes the existence of franchised IP-based telephony, pay-TV and other services that will be pitched towards retail-level telcos and ISPs who don’t offer these services.

What I see of the recent activity in making Openreach a company legally-independent from BT is that it is a sign of enabling proper competition for the UK’s telecommunications and Internet services for households and small businesses.

UK to benefit from Naked FTTC broadband

Article

Naked fibre to the cabinet may be on the way from Openreach | ThinkBroadband

My Comments

AVM FRITZ!Box 3490 - Press photo courtesy AVM

AVM Fritzbox 3490 – an example of a VDSL2 modem that could be part of the naked VDSL2 service offered in the UK

I have written up an article about broadband Internet options available for those of us who use the mobile phone as the main voice telephone. Here, I was highlighting the kind of options that are available without you needing to pay line rental to an incumbent voice-telephony carrier and highlighted services like FTTP fibre-optic Internet or cable-modem broadband service which are hosted on separate infrastructure.

But I also highlighted the concept of “naked DSL” or “dry-loop DSL” which is a DSL service using your phone carrier’s wires but you don’t have a local voice telephone service a.k.a a “dial-tone” service. A lot of countries offer this as a service option for most DSL-service packages but the United Kingdom doesn’t offer that kind of service at all.

Things are to change for the UK with Openreach offering the “naked DSL” option for people who sign up to VDSL2-based “fibre-to-the-cabinet” next-generation broadband. They will maintain the subscriber’s circuit from the FTTC street cabinet to the exchange just for line testing or if a subsequent subscriber wants to sign up to a full service with the legacy voice telephone component.

But this is a service that is considered a proposal but should really be available for UK households who start out “mobile only” or want to use that second line that was created for the fax or for someone’s independent telephony needs for their fibre-copper next-generation broadband needs.