Ofcom has finalised the Wholesale Local Access market review. The draft statement reinforces many messages from last year’s consultation and crucially maintains a new charge control for Openreach’s anchor fibre product. A greater emphasis is being put on access to BT’s duct and pole network in light of the strong momentum towards full-fibre from broadband companies other than Openreach.
Ofcom believe a revised duct and pole product could halve the upfront cost of building broadband networks
Despite appearances, the duct and pole product is not new, there has been one in place since 2011. The difference this time round are the changes that have been made to make it more usable and fit for purpose. This includes a requirement for Openreach to repair faulty infrastructure and clear blocked ducts, ensure there is space on its telegraph poles for extra fibre cables, and make available a digital map of its duct and pole network. Ofcom and others will no doubt hope that infrastructure builders make real use of this product to minimise disruption with further digging and civil works.
Ofcom to regulate wholesale price of fibre for the first time
The charge control for the 40/10 VULA product has increased slightly (£11.92 up from £11.23), but this is a result of changes in modelling assumptions rather than any shift in thinking on whether this product should be regulated. From Openreach’s perspective, it’s less about what the price is, but rather whether the rules of the game have changed, and whether they, and other infrastructure investors, can make similar investment commitments today knowing that the same regime will apply in the future. It’s clear that in 2009 when they agreed the current pricing flexibility with Ofcom, that they expected this to continue for longer than it has.
Ofcom seem less convinced by these arguments. While the 40/10 variant is the anchor product today, they see that changing given the shift towards full-fibre. This puts pressure on others to invest in higher speeds as that’s where Openreach will still have pricing flexibility. The role for Ofcom now will be reassuring infrastructure investors that things aren’t going to change dramatically in the future and that this isn’t a charge control that creeps up the bandwidth curve.
