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Openreach withdraws plans for wholesale dark fibre product

After a successful appeal against conditions laid down by Ofcom, Openreach has withdrawn plans to launch a wholesale dark fibre product

Openreach will not launch a wholesale dark fibre access (DFA) product on 1 October 2017 as it had planned, following its successful appeal against Ofcom’s 2016 Business Connectivity Market Review (BCMR). It will now move ahead to explore existing or future alternatives with its communications service provider (CSP) customers.

In March 2016, the BCMR forced Openreach to cut its wholesale leased line prices, imposed stricter service standards and mandated that CSPs should be able to use its dark fibre network to deliver their own connectivity services.

But a successful appeal by Openreach has now seen Ofcom’s BCMR effectively quashed. In a ruling handed down at the end of July 2017, the Competition Appeals Tribunal (CAT) said Ofcom had erred on a number of points.

The regulator’s errors were to define a single product market for contemporary interface symmetric broadband origination (CISBO) services of all bandwidth, to conclude that the rest of the UK comprised one geographic market, and to determine the boundary between competitive core segments and the terminating segments of BT’s network.

“In light of the CAT ruling and following discussions between Ofcom and various parties involved in the CAT litigation, Openreach does not intend to launch DFA on 1 October 2017 or notify launch pricing at the end of August/early September 2017,” Openreach today told an industry session convened by the telecommunications adjudicator.

“We are very keen to discuss with CPs what existing or future alternatives to dark fibre may meet their requirements,” Openreach added.

Computer Weekly understands that Openreach gave no indication as to whether or not it would resurrect its plans to launch a DFA product in the future.

The cancellation of the planned product launch, which would have been in just two months’ time, will be a blow to CSPs that had lobbied for access to Openreach’s dark fibre and campaigned for a regulated product.

Read more about dark fibre

The pressure to find an alternative will be particularly acute among mobile network operators (MNOs), which are coming under intense pressure to deliver more bandwidth to their end-users – something dark fibre might have alleviated.

Mark Collins, director of strategy and public affairs at fibre network builder – and dark fibre supplier – CityFibre, said he was not surprised that Openreach had u-turned given there was now no longer a legal basis to mandate regulated dark fibre.

“As one of the UK’s largest suppliers of dark fibre infrastructure, CityFibre’s growth and proven ability to attract investment demonstrates that the competitive market for business connectivity, including commercial supply of dark fibre, is alive and well and not in need of disproportionate and unnecessary regulatory interference,” said Collins.

“Rather than continuing to drive increased dependency on Openreach, we suggest that Ofcom goes back to the drawing board to focus on delivering more appropriate and proportionate remedies that help meet its own strategic objectives to support increased competitive investment in full fibre for the UK.”

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