Ofcom wants to impose "strict new rules" on BT Openreach to improve its leased line services to businesses, in draft proposals today recommending faster installation times, lower prices for high-speed lines and greater access to its “dark fibre” network by competitors.
In its Business Connectivity Market Review proposals the regulator claimed the measures would improve the time it takes the former state telco to install high-speed business and significantly reduce the wholesale prices BT charges for these lines.
The new rules will be finalised at the end of April, subject to obtaining permission from the European Commission.
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.”
The announcement follows Ofcom’s Strategic Review of Digital Communications in February, which aims to create greater competition in the UK's broadband market.
The document recommended an enhanced form of operational separation between BT and Openreach after finding that Openreach still has an incentive to make decisions in the interests of BT, rather than BT’s competitors.
According to Ofcom the leased line market is worth around £2bn, with most of those lines provided on behalf of competing providers by BT. It said: "Ofcom has decided that Openreach is taking too long to install leased lines and is not providing adequate certainty that the services will be provided by the date first given to the customer."
Since 2011, the average time between a customer’s order and the line being ready has increased from 40 to 48 working days. Ofcom’s proposals would require BT to reduce this to 46 working days by the end of March 2017, and get it down to 40 working days the following year. The telco regulator also found that Openreach is currently failing to complete one in four leased line installations on the initial date promised to its customer.
In a Parliamentary select committee hearing earlier this month chief exec of BT Gavin Patterson admitted BT's service too often falls short. “We recognise still a lot more to do on service, but it has improved," he said.
Kim Mears, managing director of infrastructure at BT, admitted the telco needs to address its record.
"If you are a customer that sat in once and then sat in again and we failed you twice, that is just not acceptable, but that would be one example around multiple missed appointments," she said.
Ofcom is proposing that, by the end of March 2017, Openreach must complete 80 per cent of leased line orders by the date it promises customers, rising to 90 per cent from April 2018. Under the new proposals, competitors will also be able to use BT’s fibre-optic cables with their own equipment, rather than rely on BT’s equipment. ®
Updated to add:
A BT spokesman contacted The Reg after the publication of this story to say: “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 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.”