Spreading Gigabit speed “full fibre” (FTTP) broadband ISP networks across the UK is a slow and expensive process, although recent improvements to Openreach’s infrastructure sharing product could help rivals to boost their own alternative roll-out plans. But some challenges remain.
The idea of giving rival operators access to install their own fibre optic cables through Openreach’s existing cable ducts and telegraph poles is not new and their related Physical Infrastructure Access (PIA) product has been around since 2011, although until recently its take-up was fairly low. A variety of issues, from awkward costs to tedious administrative processes and restrictions on use were often highlighted by rivals as a hinderance.
Indeed the early PIA product was primarily only focused upon helping to connect residential properties and could not be used for providing rural backhaul or big business connectivity (e.g. leased lines). Admittedly this would have threatened BT’s own products, but it could also play a pivotal role in helping rivals to make the economic case for building new connectivity to homes.
In 2016 Ofcom set about to revise this via an enhanced approach to Duct and Pole Access (DPA), which has this month been adopted by a now much more independent Openreach. The update gives ISPs more information (better maps etc.), more efficient processes, new obligations for repairing/clearing blocked ducts (at cost), better pricing and makes PIA available to ISPs building networks for both homes and businesses (mixed usage, with restrictions).
In the words of Ofcom, the updated DPA / PIA approach could “fundamentally change the business case for building new networks … It could cut the upfront costs of laying fibre cables by around 50% – from £500 per home, to £250. It could also reduce the time required for digging works, enabling fibre to be installed in some streets in a matter of hours, where it would have taken days.”
The revised product has been broadly welcomed and a fair few operators are now making use of it to assist, where appropriate, in their deployments of Gigabit capable Fibre-to-the-Premises (FTTP) networks. For example, Virgin Media recently made their first commercial (non-trial) use of PIA in Wales (here).
However several ISPs have raised concerns about using it more widely, such as when supporting major city-scale roll-outs (here). Cityfibre told us that, in its current form, PIA remains a “fundamentally non-equivalent proposition and its full potential to accelerate competitive rollouts unrealised.” Similarly Hyperoptic said, “Openreach has no incentive to treat its competitors fairly – instead it is attempting to slow us down and make us pay to unblock and repair its Victorian infrastructure.”
Complaints also crop up around issues linked to Service Level Agreements (SLAs / Guarantees SLGs), as well as problems with accessing Openreach’s infrastructure on private land (Openreach may have an existing wayleave but rivals still need to get their own – paying multiple times to access the same infrastructure) and issues with the Network Adjustment process for repairing ducts (described as too “clunky” or “inefficient“).
Meanwhile Ofcom has already proposed to introduce “unrestricted access to the entirety of [Openreach’s] duct and pole network” and possibly better SLAs in the future (here). The change to unrestricted use, if adopted, means that PIA could also be harnessed by rivals for the deployment of leased lines, which can be harnessed to connect larger corporations or as capacity (backhaul) for mobile operators or broadband ISPs etc.
At this point we note that Openreach, Ofcom and ISPs are still working to refine PIA as part of an on-going process (particular focus is on Network Adjustment, Key Performance Indicators [KPI] and SLA/SLG improvements). As such we were keen to know what Openreach thought of all this and how they are adapting.
Thankfully the operator’s MD of Customer, Commercial and Propositions, Katie Milligan, has been kind enough to respond. Katie has been working in the telecoms industry since 2004 – having graduated from the University of Strathclyde – and she joined Openreach back in 2009. Today she is responsible for their entire £5bn product portfolio and plays a big role in managing their relationships with more than 600 wholesale customers.
1. Firstly, can you tell us a little about PIA and what changes have been made to this on 1st April 2019?
We’ve offered a Physical Infrastructure Access (or Duct and Pole) product since 2011, and basically it allows Communications Providers to pay us an annual rental charge in return for installing their own cables and equipment using our national network of underground ducts and telephone poles.
We’re committed to making this work for our customers and it’s something we see as a priority. Openreach was created to enable retail competition, and we believe that providing a great PIA product will help Ofcom and the Government to encourage more competing networks at an infrastructure level.
Over the last few years we’ve been working closely with Ofcom, our customers and the wider industry to make access to our ducts and poles even easier. That process has brought us to our latest product update, which was formally launched on April 1st and introduces a big raft of improvements.
Firstly, we’ve recruited more than 100 people into our PIA team and given them the training they need to CPs who want to scale up their deployment.
We’ve backed that up with a bunch of streamlined processes and made further investments in our online mapping tool and ordering system. This is going to give CPs greater autonomy in recording and reserving the bits of the network they want to use.
Under the new product, we’re also now obliged to carry out improvements to our network, at our cost, in certain circumstances. Those improvements – known in the industry as Network Adjustments – include clearing out duct blockages or decluttering poles to relieve congestion and that should mean our customers can deploy their network infrastructure where they need to, and quicker than ever.
Lastly, and by no means least, we’ve also significantly reduced our rental charges and removed our order processing charges altogether.
We’re going to keep working closely with customers as they use the new capabilities, and we’ll evolve the product in the future, based on their feedback.
2. Ofcom have previously predicted that the revised PIA product could “fundamentally change the business case for building new networks … It could cut the upfront costs of laying fibre cables by around 50% – from £500 per home, to £250. It could also reduce the time required for digging works, enabling fibre to be installed in some streets in a matter of hours.”
Do you agree with this assessment and if not, why?
It certainly sounds logical that using an existing network would be quicker and cheaper than building from scratch, but we’re not an alternative network building an investment case, so I can’t really comment on the cost comparison. All I Know is that a month after Ofcom’s statement back in May 2018, we effectively halved our rental charges for the service and removed all the order processing costs. These moves, combined with the new Network Adjustment regime, should enable CPs to deploy at much lower cost than they could before.
3. A fair few cable ducts (especially older ones) sometimes become blocked and need to be cleared, which can be a very tricky and expensive process. The revised PIA approach gives operators a choice between either, A) working to clear the ducts at their own cost or, B) ordering a Network Adjustment product that enables Openreach to undertake the work on their behalf, also at cost.
Some operators have complained that the Network Adjustment process is too “clunky and inefficient.” Can Openreach offer any rough indication of how many ducts are likely to be blocked in your UK network and what are your views on the revised approach, as well as the criticism of its efficiency? Also do you worry that rivals could damage your network if they do it themselves?
We own and maintain nearly half a million kilometres of spine duct in the UK – some of which was laid all the way back in the Victorian and Edwardian eras – so it’s no surprise to us when our engineers occasionally come across blocked or damaged duct.
Given the scale and variety of conditions and geographies, it’s difficult to be specific on volumes but I’d say that in some areas you might expect to encounter a couple of blockages per kilometre.
We only launched the new capability a few days ago, so I think it’s probably a bit early to make a sweeping judgement on how well it’s working.
We’ve worked hard to get this right and for several months prior to launch, and we’ve not just done this in a room on our own. We worked closely with customers on a proof of concept to iron out wrinkles and, for example, we now believe more than 95 per cent of our pole requests can be processed from one of our three PIA operation centres (in Belfast, Cardiff or Walsall), rather than having to take the time to find an individual field planner to assess the work.
With Network Adjustments underground it becomes trickier, as we can only assess whether a request to unblock a duct is valid with a site visit and a lot of the time we go out there and discover there’s not really a blockage at all, which is wasted effort. We have a huge amount of experience building networks over many years and, with that experience, we often find we don’t need to dig when we investigate. Already in week one we’ve found that we can get through situations that others consider need Network Adjustments.
The bottom line is, we’ve invested big sums to develop a robust system that will significantly reduce the time it takes for customers to plan and place orders, but we’re not stopping there. We do aim to make further improvements on PIA throughout the year and we’re keen for our customers to work closely with us as we keep progressing.
4. Some operators that have made large PIA/DPA orders, such as to support a roll-out of Fibre-to-the-Home (FTTH) style ultrafast broadband ISP networks in urban areas, have previously raised concerns that Openreach could use this information to help them target areas for their own rival FTTP deployments (i.e. in an anti-competitive way).
Do you understand such concerns and what, if anything, can reasonably be done to mitigate those fears?
I do understand those concerns, but I also know that we take customer confidentiality extremely seriously and we’ve got strict governance and controls in place, so I’m convinced it’s not an issue.
For a start, we have stringent Chinese Walls internally, so no ordering or forecast information for PIA can be used in any way, other than to make sure we meet our contractual obligations to our customers and provide a quality PIA service.
We also have dedicated teams working on PIA who are all subject to compliance training and rules about what information they can share, with who. These guys are then subject to extra oversite by our Business Integrity team and our Internal Audit and Commitments Monitoring team. On top of that, we’re a heavily regulated business, so ultimately Ofcom’s dedicated Openreach Monitoring Unit (OMU) is there to provide an extra level of assurance.
Finally, it’s worth saying that we now announce all of our own plans for FTTP build 12 months in advance. So the entire industry can see where we’re planning to build and make their own plans accordingly. Our plans are governed, conceived and operated in a completely separate part of Openreach that’s also regularly audited and monitored by our compliance and audit teams.
5. Various providers have also noted that PIA runs into a problem with wayleaves (legal access agreements) in some parts of the country, such as across much of Scotland. In this situation a lot of Openreach’s PIA assets (poles etc.) are located on private land and as such rival ISPs would require a wayleave to access the infrastructure.
Naturally this creates a difficult situation, not least with having to pay multiple wayleaves for access to the same infrastructure. What are your views on this and how do you think it could be resolved?
Wayleaves don’t form any part of the PIA product. They’re separate bilateral contracts between operators and land owners.
We believe it’s important for any company deploying networks to consider and invest resources in obtaining the necessary consents and permissions to carry out their work, and that’s something Openreach has done over a long period of time and continue to do.
It’s also important to remember that during industry discussions, it has generally been agreed that CPs themselves need to identify and obtain the consents, permissions and any wayleaves they might need for their own network deployment.
We have given information to CPs to help them identify whether we have any permissions under the new 2017 code, although it remains a matter for CPs to ensure they have the right consents for their work or equipment. We’re also in ongoing discussions with Ofcom and the Office of the Telecoms Adjudicator (OTA) about how we could make available a list of relevant post codes or grid references where we have one of the newer wayleaves in place so that it’s more easily available to CPs using PIA.
The interview continues on page 2..