Ofcom published its Wholesale Fixed Telecoms Market Review on 18th March 2021 which sets out how various changes (Dark Fibre Access, copper retirement, regulation that varies by geographic area etc.) will be used to boost UK investment in broadband and high capacity Ethernet services.
The FTMR is slightly different from past reviews, it combines both the Business Connectivity Market Review (i.e. leased lines and Dark Fibre etc.) and the more residential focused Wholesale Local Access Market Review into a single review, and it also covers a much longer 5-year period (from April 2021 to 2026) than the usual 3-years, giving operators much greater certainty.
19% of UK homes and businesses can now access Fibre-to-the-Premises rising to over 37% for all gigabit-capable (1Gbps+) services. There is currently a surge in the homes covered number due to the rapid build out of fibre and also to the adoption of DOCSIS 3 by Virgin that enables its hybrid coax and fibre network to achieve gigabit speeds. Their entire network of 16m households will be gigabit capable by the end of 2021.
On top of that the UK Government has an ambition to ensure that at least 85% of premises can access a “gigabit-capable” connection by the end of 2025 – supported by a £5bn investment for the hardest to reach areas. BDUK, part of DCMS is tasked with delivering this programme, balancing pace, value for money and ensuring that coverage doesn’t leave people out.
BDUK believe that the £1.2bn proportion of this commitment that is currently definitively funded in future annual spending plans will take care of 5% of the 20% most difficult to reach premises.
Key points of the review:
The review identifies BT as having market power in the provision of physical telecoms infrastructure, and wholesale markets underpinning broadband and leased line services (except in Central London). New regulations apply to BT from April 2021 until March 2026.
Openreach must allow network operators to lay their own fibre networks using Openreach’s infrastructure through its Physical Infrastructure Access (PIA) product.
Ofcom will vary how it regulates Openreach’s broadband products, depending on the level of current or prospective competition in an area.
In competitive areas (Area 1) Ofcom will not regulate Openreach’s broadband products. Customers in these areas will benefit from the choice of multiple networks, so regulatory restrictions can be removed. No such areas have been identified yet.
In areas with the potential for material competition (Area 2) making up 70% of the UK, Openreach will be required to provide wholesale access to its network. A flat, inflation-adjusted, regulated price is being set for Openreach’s entry-level superfast broadband service only (40 Mbit/s).
In the remaining areas (Area 3) making up 30% of the UK where Openreach is the only operator providing a large-scale network, Ofcom is setting a cost-based charge control which allows Openreach to recover the costs of both its existing copper network and its investment in a new full-fibre network (BT has committed to deploying full fibre to 3.2 million premises by March 2026).
Leased lines will be regulated in a similar way to residential broadband, by varying its approach geographically to reflect the level of current or prospective competition. In Area 3 Openreach will be required to provide dark fibre links at cost to support mobile and other network growth.
To ensure that Openreach provides the quality of service customers need, Ofcom has maintained the existing rules for how quickly it must carry out repairs and installations. In light of the impact of Covid-19, Ofcom has set the requirements in the first year (FY 2021/22) at slightly lower levels (2019/20 levels for broadband services) than the rest of the review period.
Cable services are currently delivered by less than a handful of UK ISPs, although Virgin Media is the only one of any real national scale and covers almost 44% of the country’s premises; this will be expanded to around 60-65% by 2017. Related services run over a mix of high-grade coaxial and some fibre optic cable. They usually make use of Data Over Cable Service Interface Specification or DOCSIS, or EuroDOCSIS technology, which is an international standard for defining the communications and operation support interface requirements of a data over cable system. DOCSIS3.0 is capable of reaching speeds of over 400Mbps using multi-channel bonding. Note that you can’t mix and match different ISPs and services (e.g. broadband, TV and phone) on a cable line, they must all come from one operator and will often need an engineer installation.